1. Introduction

This policy applies to all investment decisions of Craigmore Sustainables Group LP and its associated entities (Craigmore) via its Investment Committee, and ongoing risk management, compliance with laws and regulations, community and stakeholder engagement, and transparency and reporting.

Craigmore manages the majority of our assets through majority stakes, which gives us the ability to directly implement and control environmental, social and governance (ESG) outcomes. This policy applies to minority stakes investments through our initial investment decisions, director influence, shareholder voting and eventual disposal decisions.

The Investment Committee has responsibility for the implementation of this policy during the investment and acquisitions process. Craigmore’s Investment Committee has responsibility for approving any changes to this policy.

2. Foundational Policies

Sustainability Principles

Craigmore has been operating, managing farms and forests, for more than a decade on the basis of our Sustainability Principles (Principles). These Principles were established because Craigmore recognised that we needed an overarching framework for our activities which applied to each of the sectors in which we operate. The Principles cover the team, community, environment, business and financial spheres. While they were created before the term “ESG” came to prominence they address each of element of ESG and remain as important to our businesses today as they were at their establishment.

These Principles are Craigmore’s commitment to:

Team & Community:
  • Enhance the safety, skills and job satisfaction of our people
  • Promote open and honest communication with all parties
  • Promote well-balanced communities
  • Grow healthy and safe products
  • Protect and enhance animal welfare, biodiversity, soil and water
  • Minimise risk from use of chemicals and atmospheric pollution
Business & Financial:
  • Think long term and reward the team for behaving as owners
  • Measure risks and manage them to appropriate levels
  • Maximise profits within the above ethical and risk constraints
Other Foundational Principles

Individual investment vehicles under Craigmore management may also have their own specific foundational ESG policies integrated into the terms of their governing documentation. Generally, these terms are included in the investment criteria or as a schedule to the relevant agreement. These may be made available on request at Craigmore’s sole discretion.

3. Responsible Investment: Asset Selection and Acquisition

Craigmore integrates ESG considerations into our investment decision-making process and conducts rigorous due diligence to assess the sustainability and ethical performance of potential investees. We prioritise investments that align with our sustainability principles and which contribute positively to the communities and environments in which we operate; primarily farming, forestry and permanent crop horticulture with other smaller periphery investments as appropriate. The investment committee must support investment proposals by unanimous vote to move forward with an investment decision.

The principal factors for an investment, which are considered by the responsible member of management (Head of Acquisitions) in advance of an investment recommendation being put before the Investment Committee are:

  • Reputational and ESG;
  • Physical including climate related risks and opportunities;
  • Volatility of return including market prices, yield potential and input costs;
  • Financial returns including both asset price appreciation and cash distribution potential for investors;
  • Execution risk including the risk to operations during ongoing management; and
  • Legal risk including counterparty and contractual risk, compliance with laws and regulations, and transaction risk.

Craigmore will not invest in businesses or activities that:

  • Relate to the manufacturing of tobacco or other nicotine-based products;
  • Relate to gambling, casinos and equivalent enterprises;
  • Relate to adult entertainment;
  • Relate to extractive industries (e.g. mining of minerals or other geological materials, water bottling, oil and gas);
  • Relate to the manufacturing of weapons, including:
    • military weapons;
    • controversial weapons (cluster munitions, landmines, biological and chemical weapons, nuclear weapons and depleted uranium);
    • civilian firearms;
  • Involve the use of child labour, forced or compulsory labour, or other human right abuses;
  • Promote any form of discrimination based on race, culture, gender, sexual orientation, or other prohibited grounds;
  • Are illegal in the country in which the good or service is used or intended to be used; or
  • Are likely to have a materially adverse impact on the climate or environment.

4. Responsible Investment: Asset Management

Craigmore is committed to operating and managing our investments responsibly and sustainably on an ongoing basis, after the investment/acquisition process is complete. This includes integrating
ESG factors into our decision-making and management processes, ensuring compliance with applicable laws and regulations, and promoting a culture of responsible management among our staff and investees.

Craigmore’s Chief Operating Officer is responsible for ensuring that adequate resources, including staff, training and budget are available to assess, implement and monitor climate-related risks/opportunities and measures.

Craigmore continue to monitor and assess the ESG performance of our investments, and take appropriate action to address any issues that arise. Craigmore has selected the following key metrics for the management team to monitor and report:

  • Greenhouse gas emissions;
  • Soil health: erodible land protected and soil health through visual soil assessments;
  • Water: nitrogen loss and water health through visual stream assessments;
  • Biodiversity and ecosystems: native planting by Craigmore since inception;
  • Animal welfare: Body condition score, death rate and six-week in-calf rate;
  • Health and Safety: Total Recordable Injury Frequency Rate (TRIFR);
  • People and Communities: Total employment, full-time and part-time and male and female;
  • Community engagement activities;
  • Governance: Craigmore’s governance framework and board members.

Craigmore is committed to reporting on these metrics on an annual basis and to making these publicly available on our website. The metrics themselves or the methodology Craigmore uses to measure them may evolve as Craigmore and the wider industry evolves.

5. Craigmore Commitments

Craigmore supports New Zealand’s commitment to the Paris Agreement to the United Nations Framework Convention on Climate Change. Under the Zero Carbon Amendment Act 2019 New Zealand has committed to:

  • Net emissions of all greenhouse gas, excluding biogenic methane, reduced to zero by 2050; and
  • Methane reduction of 10% by 2030 and a provisional target of 24-47% by 2050.

Craigmore, in its support of New Zealand’s climate goals, has publicly committed to achieving a:

  • 50% reduction in net GHG emissions by 2030 compared to emissions immediately prior to Craigmore management control;
  • An independently verified net-zero emissions dairy farm by 2035, with minimal offsetting, established in partnership or collaboration with other like-minded entities;
  • 35% reduction in GHG emissions intensity for milk production across our farms by 2035;
  • Net-zero GHG emissions from the Craigmore managed portfolio of assets by 2050*;
  • Net-zero GHG emissions from the Craigmore portfolio of assets by 2030 including all sinks and sources of GHG**.

Craigmore has been a signatory to the United Nations (UN) supported Principles for Responsible Investment since 2012 and reports in the annual cycle. Craigmore also supports the UN Sustainable Development Goals (SDGs). We have identified following goals as being most relevant to the development of our businesses:

  • 8: Decent Work and Economic Growth
  • 12: Responsible Consumption and Production
  • 13: Climate Action
  • 15: Life on Land

* this target excludes any carbon credits (New Zealand Units or NZUs) which have been received by Craigmore’s forestry businesses and sold to third-parties. It also excludes any indirect NZUs that have been purchased by Craigmore through fuel and electricity.

** this target includes all biological sources and sinks of GHG including those sold by the forestry sector and those indirectly offset by the supplier (eg. fuel and electricity)

Policy updated May 2023