Case Studies

Otsego Land Trust’s Socially Responsible Investments Support Conservation Goals

Otsego Land Trust (OLT) works to conserve their region’s natural heritage of woodlands, farmlands, and waters that sustain rural communities, promote public health, support wildlife diversity, and inspire the human spirit. Headquartered in Cooperstown, New York, OLT works in the in the Upper Susquehanna watershed – the largest river basin on the Atlantic Seaboard – which drains 4 million acres of south-central New York before flowing into the Chesapeake Bay.  Primary conservation efforts target the Upper Susquehanna sub-basin, which include Otsego Lake as well as the watershed of one of its major tributaries, the Unadilla River. The region is further defined by its diverse human and natural landscapes as well as numerous plant and animal species, some threatened and endangered. Agriculture, including forestry, forms the backbone of the economy and also provides critical habitat to many bird species.

Value of the land and habitat

The landscape boasts a mosaic of significant natural areas as well as rural and historic sites, making the area of regional and national conservation significance. Scenic Lake Otsego has been called “the cradle of American literature” and has been praised by artists and writers and immortalized in the novels of James Fenimore Cooper.  Nearly 80% of Otsego County is dominated by three main land cover types: Evergreen-Northern Hardwood Forest, Cropland, and Sugar Maple Mesic Forest. Both Evergreen-Northern Hardwood Forest and Sugar Maple Mesic Forest are extremely high in biodiversity. Evergreens and hardwoods provide habitat for an estimated 148 species, while sugar maples shelter 162 species of the county’s 366 mammals, breeding birds, amphibians and reptiles. Croplands provide habitat for approximately 97 vertebrate species. The land trust’s Conservation Blueprint defines ten conservation areas based on their value as aquatic, terrestrial, agricultural, and historic resources as well as for their proximity to protected lands and for the existence of threats that could result in loss of critical natural habitat, farmland, or historic sites.  Since the development of the Blueprint in 2006, Otsego Land Trust has regionalized and is actively protecting borderlands in adjacent counties including Delaware, Herkimer, Schoharie, Madison, and Chenango Counties.

Conservation concerns

Unprotected land accounts for 96% of Otsego County. The majority of the county’s unprotected land – nearly 60% of the parcels, and 33% of the total acreage – is residential.  Spatial analysis of the Otsego Land Trust Region shows that the northern portion of the Otsego Land Trust Region contains prime agricultural soils and highly productive farms that, because it is relatively flat and easily accessible from U.S. Route 20, is under pressure from development. Private forests in the southern portion of the region are expected to face the greatest pressure from housing development, with portions expected to grow from Rural II (17-64 housing units per acre) designation to Exurban (65 or more units/acre) by 2030. This growth of development is expected to pose the greatest threat to natural areas in the region, including grasslands, deciduous forests, and wetlands, with associated threats to plant and animal species and loss of economic opportunities. Historic and cultural resources are also likely to be threatened under growing development pressure.

In addition to threats of future development, which can negatively impact species and habitat biodiversity as well as historic uses and scenic values, current environmental problems present conservation concerns. For example, water quality impacts from nonpoint source pollution are exacerbated by the area’s highly permeable soils, which allow contamination to travel long distances without being absorbed. While the land trust is very engaged in regional planning dialogs, it also recognizes that conservation work does not occur in a vacuum – global climate change presents significant and daunting ecological challenges.

What’s being done and how

Otsego Land Trust uses traditional conservation tools such as conservation easements, purchase of development rights, land ownership, and bequests to address development pressures. In part to address water quality impairments as well as to protect biodiversity and scenic values and reduce development threats, the land trust has used spatial analysis to layer multiple characteristics to objectively inform acquisition goals – the five major components of this spatial analysis are: lands abutting protected areas, waterway buffers, scenic value, agricultural value, and species richness.  In addition to these conservation priorities, OLT focuses on community conservation and ensuring that protecting the healthy lands and clean waters that sustain all communities is relevant and a priority across diverse demographics.   Their outreach and education efforts as well as a careful investment strategy reflect the organization’s commitment to supporting long-term conservation objectives by addressing climate change.

Through their Climate Change Initiative this small land trust has taken significant steps to link the surrounding communities with educational programs.  Additionally, the conservation of forests, farmlands, wetlands, open space, and wildlife habitat makes positive contribution to mitigating the negative impacts of climate change by avoiding development to begin with. A number of OLT’s conservation easement landowners are personally invested in renewable on their protected properties and actively support renewable energy in their communities. By engaging in strategic socially responsible investment (SRI), Otsego Land Trust notably takes mitigation efforts a step further.  This process, which Executive Director Virginia Kennedy describes as “a learning and a teaching moment” involved exemplary efforts of staff, board members, and consultants who worked together to explore the nuances of investment strategies and options in order to identify options that aligned with the land trust’s conservation mission. As staff members and the board’s Investment Committee learned more, they became more convinced of the positive impacts of socially responsible investment strategies – in addition to aligning investment choices with core values, SRI can send positive signals to financial markets. SRI also reflects a commitment to ethical investment decisions, enabling mission-driven organizations to fulfill their fiduciary duties by managing trust assets to maximize conservation benefits.

Current Implementation Status and Next Steps

Working together with an investment manager, board and staff members agreed on a phased strategy.  After completing a questionnaire to align conservation goals and investment opportunities, OLT identified available offerings where returns would not be diminished while investment in fossil fuels would be screened out as much as possible, the first phase in their two-phase process. In phase two, which is expected to begin in 2016, staff and board members will revisit their holdings and reassess their ability to further avoid fossil fuel investments moving forward. In addition to committing to engage in socially responsible investment choices, OLT is taking steps to consider climate change across the spectrum of their conservation activities. These efforts include considering revisions to conservation easements to allow for appropriate small-scale renewable deployment, highlighting on the ground actions that support mitigation objectives, and continuing to support education and outreach efforts in the community.

Key Partners

While the Otsego Land Trust’s SRI decision-making processes was primarily internal, these efforts were supported by staff, board members, outside investment experts including Royal Bank of Canada, NBT, and Divest-Invest Philanthropy Initiative .

Lessons Learned

  • Ethical investing matters. Aligning investments with your mission makes good sense and is the ethically responsible thing to do. Investing in a socially responsible manner is consistent with conservation objectives and can be approached in a way that also allows good governance in terms of a board’s fiduciary responsibilities.
  • Change takes time. Be patient and allow time for research regarding investment-divestment strategies and investment managers. A staged approach to socially responsible investing allows an organization to move toward comprehensive investment goals while allowing board, staff, and supporters to understand the process and feel comfortable with decisions to invest in a way that is consistent with a conservation mission. Changes such as full divestment and avoided investment can take time, but impact positive socially responsible investment is a good step forward.
  • Land trusts can inspire positive change. Conservation happens on many scales, presenting many opportunities to engage. It helps to learn how small scale actions can have larger impacts in order to communicate why it is important to take these steps.