The Rentenbank is working towards standardizing the non-financial data provided by commercial banks regarding agricultural farms and other end borrowers. "We are currently in the process of discussing with banking associations, industry representatives, as well as with scientists and federal institutes on how to standardize this dataset," reports Nikola Steinbock, the CEO of the Rentenbank, in an interview with Börsen-Zeitung.

The next step will be to engage in discussions with the federal government. "Because when it comes to data sets, standardization requires regulation," explains Steinbock, who also adds, "We don't need it in many other areas." Up until now, commercial banks have been requesting very diverse data regarding sustainability, including intensity, scope, and quality.

The Rentenbank also keeps an eye on its own footprint. The institution aims to have 50% of the data it needs for the Corporate Sustainability Reporting Directive (CSRD) by the end of 2024. "We consider that realistic," says Steinbock. "By the end of 2025, we should have the other half as well – we believe we can achieve that."

Challenging in this process is the measurement of Scope 3, which includes greenhouse gas emissions along the value chain of the bank. The Rentenbank is attempting to gather as much data as possible to measure Scope 3 more accurately – ensuring that this measurement truly reflects what is in the bank's portfolio. "However, we will definitely not start conducting massive surveys with our end borrowers, that is, the farmers," adds Steinbock.

Steinbock has reservations about the blanket categorization into "green" and "brown." The bank addresses sustainability with 25% of its loans. However, she emphasizes that it cannot be inferred from this that the remaining 75% are inherently "brown." The CEO counters the expectation of directing capital only towards very environmentally friendly investments. "We wouldn't need a sustainable transformation if we were only involved in sustainable topics." Instead, it's about transformation. "This also means continuing to finance things that are not inherently sustainable."

Steinbock illustrates this argument with an example: "If you want to continue consuming meat in Germany – and it seems that many people want to – you will have to deal with rebuilding barns, but it remains a barn. And there are animals in it, and these animals have some form of greenhouse gas emissions that can be reduced but not completely eliminated."

Transformation means addressing the leverage points where significant effects can currently be achieved. The goal is to reduce pollutants to the extent that "our overall footprint becomes neutral or zero." However, this will only be the case in 20 years. Therefore, transformation means that "we cannot take giant steps tomorrow," because "we have to bring everyone along, or else we won't achieve transformation."

With regard to the end customers of the Rentenbank, Steinbock emphasizes that awareness of the necessity for climate protection in agriculture is immense. After all, climate change significantly affects agriculture, as farmers have to deal with heavy rainfall, drought, and the loss of biodiversity. However, not every operation is aware of the extent of the data that needs to be provided to the commercial bank: "Not every operation is aware of what lies ahead."

There are undoubtedly conflicts of interest in agricultural operations, as farms aim to operate not only sustainably but also profitably. "Given these conflicts of interest, we strive to explore with farmers how we can achieve this together," emphasizes Steinbock, providing some insights into how the bank approaches this: "We communicate positive examples, we connect people with each other, we finance business models that are completely new and give agriculture impulses to do things completely differently, for example, by financing startups."

Additionally, the Rentenbank defines "future fields in focus," such as soil-friendly cultivation or efficient irrigation. For these "future fields," the bank offers premium conditions to provide clear incentives.

The main part of the business for the development bank remains, of course, promotional loans and program loans, "where we provide concrete refinancing through commercial banks with 6 to 7 billion euros per year – that is our absolute main business." When comparing this to investments in venture capital funds, one can see the differences in scale, as it amounts to 140 million euros at the end of next year. Steinbock summarizes: "We refinance the breadth of agriculture, and at the same time, we promote new approaches."

The CEO emphasizes that the industry is in unique circumstances: "There have always been upheavals, but currently, the upheavals are enormous – as are the challenges posed by climate change, biodiversity, and much more." Therefore, the discussions are more emotional and challenging than before.

Against this backdrop, the Rentenbank has opted for a strategy of gradual progress: "We break down the responses to the challenges into individual steps. Because then it becomes more manageable – and the challenges no longer seem so overwhelming."

Biodiversity is a major concern for the Rentenbank: "Biodiversity is absolutely crucial – it's essential," says Steinbock. The fertility of plants depends on biodiversity.

However, measuring biodiversity is challenging. The Rentenbank has been financing a project for many years "that aims to make progress in measuring biodiversity." But there is still a long way to go before biodiversity can be measured comprehensively.