Towards a responsible model of rural asset management: Part 1
Growth in the responsible asset management sector is showing no sign of abating: in 2021, investors poured record amounts of money into funds that that aim to help the environment and promote social good (so-called ESG funds), more than doubling the prior’s year’s take. Whilst England’s rural estates are distinct from traditional private or public equity investments, a strata of progressive landowners are also beginning to pursue improved environmental and social performance; this is seen a means of differentiating themselves from their peers and capturing diverse income streams (accompanied in many cases by a desire just to do the right thing).
Do England’s landowners have an obligation to manage their rural assets responsibly? Not officially, at least not in any legally defined way (unless much of their land holdings are subject to the UK’s slightly byzantine structure of nature protection laws). However, the stark materialisation of global environmental crises, both abroad and at home, has put how we manage land under a heightened level of scrutiny. The RSPB’s 2016 State of Nature report analysed global biodiversity datasets to estimate that the UK has the 29th lowest value of the 218 countries included in the analysis - leading to claims the ‘UK has “led the world” in destroying the natural environment’.
Looking out over Ken Hill Estate's rewilded wetlands
As this situation has become manifest, so has our understanding of the various economic benefits that nature provides, and the resulting societal costs that the erosion of our natural environment has precipitated. The Conservative government’s 25 Year Environment Plan states that ‘the environment does indeed deliver calculable economic benefits’ whilst Dieter Helm, one of the UK’s leading public economists, has stated that ‘nature is the most important asset an economy has’. In most cases, the economic benefits provided by nature is free.
Restoring our natural environment can also help to combat the most pressing issue of our time: climate change. Recent research estimates that ecological restoration on a mass scale could achieve up to 37% of our carbon capture goals, at a much lower cost to the available alternatives.
Nature-friendly estate buildings in West Acre
Where landowners come into the picture, is the critical input of land into nature restoration. Protecting and restoring the natural world has always been a question of protecting land: the National Geographic has claimed that ‘50% of all land must be kept in a natural state to protect Earth’, the British Wildlife Trusts believe that 30% of Britain’s land needs to be protected to facilitate nature’s recovery, whilst in 2020 Boris Johnson set a target of protecting 30% of Britain by 2030, in a bid to boost Britain’s biodiversity.
A restored section of the River Nar (globally rare chalk stream) between Castle Acre and West Acre
In England and Scotland, land ownership over much of the country is concentrated within a small minority of the population. Research by Who Owns England estimates that 50% of England is owned by 1% of the population, whilst research by this group, Who Owns Norfolk, suggests that 60 families (0.007% of the Norfolk's population) own 15% of the land. This means that England’s large landowners will have a critical role to play in any natural recovery. Without their support, society will not be able to restore a natural environment that continues to provide myriad benefits to society for generations to come. Landowners arguably therefore have a moral duty to manage their rural assets responsibly, thinking about the environmental and social impacts of their estates as well as the potential private benefit they might derive. As stated before, some rural land businesses are beginning to realise that public and private benefit might not be mutually exclusive, and may indeed go hand in hand. This is especially the case with the UK’s shifting agricultural subsidy system post-Brexit increasingly rewarding the provision of ‘public goods’.
What does responsible management of rural assets look like? This will be explored in Part 2 of this series.