Leading banking institutions with total assets of USD $10.1 Trillion join forces at COP26 to support the decarbonization of the agriculture and land use sector
Geneva, 8 November 2021 – Today at COP26, the World Business Council for Sustainable Development (WBCSD) announced the Banking for Impact on Climate in Agriculture (B4ICA) initiative in partnership with the United Nations Environment Programme Finance Initiative (UNEP FI), the Partnership for Carbon Accounting Financials (PCAF) and the Environmental Defense Fund (EDF). Including Rabobank and Santander, and with support from the Wells Fargo Foundation, the initiative has already signed on leading banks with a combined total assets of USD $10.1 Trillion to develop best-in-class technical data-solutions to support them and their clients to align their financial portfolios in the food, agriculture and land use space towards Net Zero and Paris Agreement goals.
The agriculture and land-use sector contribute to a quarter of greenhouse gas (GHG) emissions, and COP26 annoucements on combatting agriculture-driven deforestation and reducing global methane demonstrate the increased role of the sector for achieving 1.5 degrees. Banks are in a crucial position to support the decarbonization of the sector while incentivizing practices that strengthen resilient rural livelihoods, protect and regenerate nature, maintain food security and ultimately drive towards sustainable food systems.
As more and more banks recognize the need to decarbonize their portfolios and set commitments such as joining the Net Zero Banking Alliance, banks need to be able to measure and set targets for GHG emissions. However, the agriculture and land use sector is a sector that faces significant challenges when it comes to measuring GHG emissions, especially at the producer level. There are data gaps, accounting complexity, and low digitalization of GHG emissions across different regions and agriculture products and practices. This makes the measurement and target setting of banking portfolios and the offering of farming financial innovations in this sector particularly challenging.
B4ICA will enable banks to more accurately account for agricultural sector GHG emissions, enable methodology and framework consistency, leverage best in class data and transparency tools and ultimately accelerate the drive towards financial farming solutions for net zero, climate-smart agricultural practices in critical commodity supply chains and regions.
The collaboration of agri-banks is needed to develop climate technical solutions.
With the complexity and data gaps in the agriculture and land use sector and the need to align with industry standards and commitments, B4ICA provides a unique space for pioneering banks to collaborate in the pre-competitve space, together with technical experts and other critical stakeholders. In addition to banks like Rabobank and Santander and support from the Wells Fargo Foundation, it is expected that B4ICA will engage many additional to join us and tackle this challenge at scale.
“To enable food and agriculture system transformation the finance sector plays a critical role to enable the solutions needed to reduce emissions. This WBCSD initiative alongside our partners meets the banks need for a collaborative approach for efficient and effective development of data-driven tools to support agriculture and food system transformation.” – Diane Holdorf, Executive Vice President, WBCSD
“Agriculture is one of the sectors with the highest GHG emissions, yet also one of the most challenging for banks to decarbonise. Under the UN-convened Net-Zero Banking Alliance, a major portion of the global banking industry by assets is now committed to set robust and science-based targets for agricultural loan and investment portfolios. UNEP FI is pleased to be working with partners on the B4ICA initiative, a unique platform which aims to overcome current data and methodological gaps for measuring GHG emissions in agricultural portfolios and support banks in aligning with ambitious decarbonization pathways” – Eric Usher, Head of UNEP FI
“We can’t manage what we can’t measure. Helping banks understand the greenhouse gas emissions associated with the agriculture and land use sector will accelerate agriculture decarbonization. PCAF is partnering with the B4ICA initiative to help build the tools, methodologies and frameworks so that we can properly account for financed greenhouse gas emissions and support the sector’s decarbonization.” – Giel Linthorst, Executive Director, PCAF
“The finance sector has a critical role to play in supporting farmers’ transition to climate-smart agriculture. This initiative is essential to ensure that financial institutions are aligning their portfolios with the science showing viable pathways to reduce emissions and boost resilience on farms and in rural communities.” – Britt Groosman, Vice President of Climate-Smart Agriculture, EDF