E1-1 – Transition plan for climate change mitigation
Rentenbank regards climate change mitigation as a core element of its statutory promotional mandate and overall strategic direction. Against the backdrop of the transformation of agribusiness, Rentenbank supports investment in sustainable production and business practices while at the same time reducing its own climate-related impacts. The transition plan describes Rentenbank’s transformation pathway for decarbonising its banking operations and, as a key lever, for reducing the emissions financed through its promotional and banking business.
Role of the climate strategy as a transition plan
With the climate strategy published in 2024, Rentenbank presented a formal transition plan for the first time. This combines science-based targets, a structured portfolio of measures, and institutionalised steering and monitoring processes. The transition plan covers all major sources of Rentenbank’s emissions, in particular banking operations (Scope 1 and Scope 2) and the financed emissions of the promotional and banking business (Scope 3, Category 15).
The climate strategy is reviewed at least once a year. This ensures that new regulatory requirements, methodological developments (e.g. emission factors, data availability) and changes in the portfolio composition are taken into account in a timely manner.
Embedding in business strategy, financial planning and governance
The transition plan forms an integral part of the climate strategy and is being progressively embedded in coordination with the specialist units. In the context of Rentenbank’s business model and promotional mandate, the focus is on operational ecology and the range of promotional products, particularly in the development of new promotional products. The climate targets and the key elements of the transition plan were approved by the Supervisory Board.
Compatibility with the 1.5°C target of the Paris Agreement
Rentenbank commits to its role to foster and enable the agricultural sector and rural areas to contribute to the targets of the Paris Agreement. Climate-related management is based on annual GHG accounting for Rentenbank’s operations in accordance with the GHG Protocol and for financed emissions in accordance with PCAF. Rentenbank aims to achieve net climate neutrality for its banking operations by 2040.
GHG accounting for the existing portfolio was carried out for the first time in the 2024 financial year for the base year 2023 and forms the basis for target-setting and progress measurement in relation to financed emissions. Rentenbank aligns its targets for financed emissions with scientifically derived transition pathways. As the federal promotional bank for the agribusiness and rural areas, agricultural financing accounts for a large share of the portfolio and for the majority of financed emissions. Since these emissions arise from biological processes, complete climate neutrality in this sector is not currently achievable. Rentenbank does not finance any activities in the coal, oil or natural gas sectors, which makes the decarbonisation of the agricultural portfolio a key lever.
Against this background, Rentenbank links its portfolio management to sector-specific reduction potential and has set itself the goal of reducing financed emissions by a total of 20% by 2030 compared with the base year 2023. The derivation of this goal is based on scientifically supported reference pathways, including the UBA projections, and takes into account the need for macroeconomic interaction between sectors in order to achieve the Paris target.
Decarbonisation levers and measures
The greatest potential for reducing emissions lies in the agricultural portfolio, which accounted for a significant share of financed emissions in the reporting year. Another focal area is agribusiness. Financed emissions are determined in accordance with PCAF and reported under E1-6; the measures for achieving the goals are described in detail under E1-3.
The implementation of the transition plan for banking operations is based on three key decarbonisation levers that Rentenbank identified as part of its analyses.
| Decarbonisation lever | Measure |
|---|---|
| Electrification | Electrification of the vehicle fleet |
| Heat supply | Connection to district heating |
| Renewable energy | Purchase of green electricity |
Rentenbank also pursues a range of measures that have a direct or indirect impact on the emissions of its downstream value chain. While support for renewable energy has a direct impact, participation in strategic initiatives has an indirect effect, particularly through the sectoral focus of the credit portfolio.
| Decarbonisation lever | Measure |
|---|---|
| Incentivising sustainable investments | Preferential terms (currently 20 bp discount on the standard rate) |
| Data basis & emissions control | “GHG inventory” interest bonus (currently 25 bp) |
| “GHG inventory” grant (up to EUR 1,000) | |
| Transformation & future technologies | Premium terms (currently a 40 bp discount on the standard rate) |
| Nature-based solutions | Nature-based Climate Action Programme |
| Innovation & transformation | Promotion of innovation in agribusiness |
| Renewable energy | Financing of the energy transition in rural areas |
| Strategic initiatives | Initiative of the Global Alliance for Landscape-based Decarbonisation (Weltweite Allianz für Landschaftsbasierte Dekarbonisierung; WALD) |
Investments and financial resources for implementation
The implementation of the transition plan is supported by funding on two levels. In banking operations, investments are made to reduce Scope 1 and Scope 2 emissions, for example through energy-efficiency measures, the planned conversion of the heat supply and the electrification of the vehicle fleet. The selection of operating resources can also be influenced in this way.
In the promotional and banking business, promotional volumes can be made available in order to mobilise climate-effective investments among ultimate borrowers, and pricing can be used as an incentive mechanism, for example through thematic programme loans, interest rate reductions or grants.
Rentenbank’s transition plan is not implemented through traditional productive capital expenditures in the sense of industrial transformation investments, but primarily through the structuring of its promotional and lending business. The financial resources used for this purpose are reflected in the committed and granted promotional volumes of climate-effective programmes. Separate planning of capital expenditure (CapEx) is not applicable in light of the business model.
Qualitative assessment of included issues and transition risks
Under the ESRS, locked-in GHG emissions are future emissions likely to arise over the operating lifetime of key assets or products and may therefore make it more difficult to achieve emission reduction targets or increase transition risks.
Own operations
There are no material lock-in effects in Rentenbank’s own operations arising from greenhouse-gas- or energy-intensive assets in terms of long-term emission pathways. Rentenbank’s operational footprint is largely determined by energy procurement and building operations and can generally be managed and reduced through changes such as the heat supply, electricity sourcing and efficiency measures.
Promotional and banking business
Rentenbank’s main climate-related emissions arise from the promotional portfolio, particularly from agriculture. For the most part, these emissions are not locked in in the sense of an unavoidable emissions structure over a long useful life, but result from ongoing production processes that can generally be influenced through technological, operational and nature-based measures. At the same time, structural residual emissions in the agricultural sector, particularly those arising from biological processes, may persist even under an ambitious transformation pathway.
This does not give rise to any material transition risks for Rentenbank’s net assets, financial position or results of operations. Due to the on-lending principle, climate-related transition risks affect Rentenbank indirectly through the creditworthiness and stability of the local banks (see chapter E1-9).
EU Taxonomy and exposure to coal-, oil-, and gas- related activities
In the reporting year, Rentenbank was not subject to any specific disclosure requirements under the delegated acts to the EU Taxonomy Regulation relating to the environmental objectives of climate change mitigation and climate change adaptation. Accordingly, no quantitative disclosure is provided.
Irrespective of this, Rentenbank has no exposure to coal-, oil-, or gas-related economic activities. There is neither direct financing nor significant financing or investment volumes (CapEx) relating to these sectors. In the securities business, financial institutions are the only counterparties.
Positioning in the context of EU reference values agreed in Paris
Rentenbank is not exempt from the EU reference values agreed in Paris. Given its promotional bank business model and portfolio structure, the usual exclusion criteria, such as direct activities in highly carbon-intensive industries including coal, oil and gas, steel, cement or controversial weapons, are not applicable.
Progress measurement and monitoring
Progress in implementing the transition plan is reviewed annually. The basis is the recurring GHG measurement of bank operations using the VfU tool and the financed emissions according to PCAF. An established specialist methodology for GHG measurement is used for quality assurance purposes and is regularly refined. The status of target achievement is presented in E1-4; the measures for achieving the target are described in E1-3.