Growing Returns

Selected tag(s): agricultural lenders

Lenders want to support farmers’ conservation efforts. Here’s how their executives can help.

corn plants in a conservation practice field in the midwest

Low angle view of young corn plants in a field after the rain

 

A new survey of agricultural lenders in the upper Midwest reveals important insights about their perceptions and support for farmers’ conservation efforts. As the first of its kind, the survey can inform agricultural lending institutions’ climate and sustainability strategy development.

Farmers rely on agricultural lending institutions for loans to cover equipment, land and operating expenses. In particular, loan officers at these institutions hold relationships with farmers and are often seen as trusted advisers and sources of information. Their perspectives and knowledge of conservation agriculture can significantly influence farmers’ progress in adopting conservation practices.

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Major banks are setting climate targets. What the agricultural finance sector needs to know.

Many major banks have set targets to reduce financed greenhouse gas emissions in their loan portfolios to zero by 2050 (also known as net zero targets). They join a growing movement of companies throughout the agricultural supply chain to set ambitious targets to reach net zero by 2050 to prevent the most severe impacts from climate change.

The Banking for Impact on Climate in Agriculture (B4ICA) initiative recently published “An introductory guide for net zero target setting for farm-based agricultural emissions” that shares best practices for banks to set net zero GHG emissions targets for their agricultural loan portfolios. The guidance helps banks setting agricultural sector emissions reduction targets as part of their commitments to the Net Zero Banking Alliance ­— an alliance of 122 banks representing 40% of global bank assets that have committed to aligning their assets with net zero GHG emissions by 2050 or sooner. Read More »

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3 steps for agricultural lenders to mitigate climate risk and finance resilience

Farmers in the U.S. are facing severe challenges including poor economic conditions, extreme weather and disruptions from the COVID-19 pandemic. These risks also impact farmers’ financial partners, including agricultural lenders.

While some of these risks are difficult to anticipate and plan for, there are growing opportunities and resources available for farmers and their lenders to better understand their vulnerabilities related to climate change — and take steps to build resilience.

A new report, Financing Resilient Agriculture: How Agricultural Lenders Can Reduce Climate Risk and Help Farmers Build Resilience, finds that lenders can reduce risk by supporting farmer investments in conservation practices like no-till and cover crops that are known to build climate resilience.

This report provides a path forward for lenders to support a more productive, profitable and resilient agricultural system.

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