Responsible Land Based Investment

There is a growing global consensus that responsible land-based investment requires businesses, governments, financial institutions, and development actors to recognize and respect legitimate land and resource rights. Investments in agriculture, infrastructure, renewable energy, mining, forestry, conservation, and other land-based sectors can create opportunities for economic development, employment, food security, and public revenue. However, when land rights are unclear, undocumented, contested, or ignored, these investments can also increase the risk of displacement, conflict, environmental harm, human rights abuses, and reputational damage.

International frameworks provide important guidance for improving the governance of land-based investments. The Principles for Responsible Investment in Agriculture and Food Systems (RAI) and the Voluntary Guidelines for the Responsible Governance of Tenure of Land, Fisheries, and Forests (VGGT) set out widely recognized standards for respecting tenure rights, promoting inclusive development, strengthening accountability, and reducing harm. These frameworks emphasize that legitimate tenure rights, including customary and community rights, should be recognized and protected in the design and implementation of land-based investments.

While these high-level principles represent an important global consensus, many investors, governments, companies, lenders, civil society organizations, and communities continue to seek practical guidance on how to apply them. Responsible investment requires more than compliance on paper. It depends on meaningful due diligence, transparent decision-making, inclusive consultation, respect for free, prior and informed consent where applicable, fair compensation, effective grievance mechanisms, and long-term accountability.

Responsible land-based investment also requires attention to power imbalances. Communities, small-scale producers, Indigenous Peoples, pastoralists, women, youth, and other groups with insecure or undocumented tenure may face particular risks when investments are planned or implemented without adequate safeguards. Strengthening their ability to access information, participate in decisions, defend their rights, and benefit from investment outcomes is essential.

Practical approaches to responsible land-based investment include:

• Identifying and respecting legitimate land and resource rights, including customary, collective, and informal rights.
• Conducting land tenure due diligence before investments are approved or implemented.
• Ensuring transparent consultation and negotiation processes with affected communities.
• Applying the principles of free, prior and informed consent where Indigenous Peoples and other rights holders are affected.
• Assessing social, environmental, gender, and human rights impacts.
• Designing fair benefit-sharing and compensation arrangements.
• Establishing accessible grievance and dispute resolution mechanisms.
• Aligning investment practices with the VGGT, RAI, the International Finance Corporation’s Performance Standards on Environmental and Social Sustainability, and the United Nations Guiding Principles on Business and Human Rights.
• Monitoring investment impacts over time and adapting practices when risks or harms emerge.

Responsible land-based investment is not only about reducing risk. It is also about creating more equitable and sustainable outcomes. When land and resource rights are respected, investments are more likely to support livelihoods, strengthen food systems, protect ecosystems, build trust, and contribute to long-term development. When they are ignored, investments can deepen inequality, undermine tenure security, and generate lasting conflict.

A responsible approach places people, rights, transparency, and accountability at the center of land-based investment. This is essential for ensuring that investments contribute to sustainable development while protecting the communities and ecosystems most directly affected.

Photo Credit: Fintrac, Inc.