E1-2 – Policies related to climate change mitigation and adaptation
Classification and strategic approach
As a promotional bank with a statutory mandate under federal law, Rentenbank combines its environmental responsibility with its mandate to support the transformation towards a sustainable, competitive and resilient agribusiness sector. Its strategic focus is on facilitating more climate-friendly investment, reducing emissions in its own operations and in its promotional business, and strengthening the capacity of rural areas and agricultural enterprises to adapt to climate change.
The climate strategy provides the central strategic framework and is complemented by sustainability guidelines, a sustainability programme and the risk strategy. Taken together, these instruments ensure that climate change mitigation and adaptation are systematically integrated into the business model, the promotional programme and internal management processes.
Strategic management of climate-related impacts, risks and opportunities
Material climate-related impacts and opportunities are managed primarily through Rentenbank’s climate strategy.
Climate-related risks, both physical and transition risks, are not addressed in isolation, but as part of the risk strategy and the established organisation-wide risk and management processes. Among other things, the assessment is based on regular ESG scenario analyses using recognised reference scenarios, including those of the NGFS. A detailed description of climate-related risks and their financial relevance is provided in E1-9.
Strategic framework and relevant strategy documents
Rentenbank’s strategic approach to climate mitigation is based on several interlinked documents:
| Policies / documents | Function in the climate context |
|---|---|
| Climate strategy | Central strategic framework and transition plan |
| Sustainability guidelines | Values-based and strategic framework for the core business |
| Sustainability programme | Operational management of goals and measures |
| Risk strategy | Identification, assessment and management of climate-related risks, not as a separate risk category but as a risk driver within the material risks |
| SDG mapping | Impact analysis of the promotional business based on the Sustainable Development Goals of the United Nations (UN) |
Responsibility for these strategies lies with Rentenbank’s Management Board. Their implementation is supported by Sustainability Management and the Sustainability Board.
Climate change mitigation strategy
The climate strategy is the central strategic instrument for implementing climate change mitigation.
It focuses on:
- the systematic reduction of greenhouse gas emissions in banking operations;
- aligning the promotional and lending business with investments that reduce emissions;
- supporting sustainable agricultural production and farming methods; and
- promoting innovation along the agribusiness value chain.
Within the promotional business, the strategic focus initially lies on the agricultural sector. Rentenbank provides targeted incentives for investments in low-emission technologies, energy-efficiency measures and renewable energy.
Sustainability Guidelines
The Sustainability Guidelines ensure that Rentenbank’s values are embedded in its core business and serve as a frame of reference for its current and future actions. Rentenbank focuses on the following areas of action: sustainable corporate governance, sustainable banking business, sustainable human resources management and sustainable banking operations. The areas of action relating to banking business and banking operations contribute to climate change mitigation by defining levels of ambition and areas of impact.
The Sustainability Guidelines provide the framework for other internal bank policies and strategies, such as the climate strategy. In this way, they indirectly take account of material impacts, risks and opportunities.
Sustainability Programme
Rentenbank’s Sustainability Programme translates the values and ambitions set out in the Sustainability Guidelines into concrete goals and measures.
The measures are defined annually by the responsible specialist units in cooperation with Sustainability Management and approved by the Management Board. They focus on a range of sustainability-related matters affecting the bank as a whole.
Sustainability Management carries out quarterly monitoring in order to identify obstacles and any need for support within the specialist units at an early stage.
Energy efficiency and renewable energy
Energy efficiency and the use of renewable energy are integral components of the climate strategy. In banking operations, the measures to reduce emissions include, in particular, efficiency improvements and the procurement of renewable energy. In the promotional business, Rentenbank supports investments in energy-efficient technologies through preferential terms under the sustainability programme. In addition, the generation of renewable energy, particularly through photovoltaic, wind and biogas installations in rural areas, is a core component of Rentenbank’s promotional portfolio in support of Germany’s energy transition.
Adaptation to climate change
Aspects of climate change adaptation already form part of several promotional programmes, particularly where investments contribute to the stabilisation, diversification and resilience of agricultural enterprises and rural regions. As climate change affects farms and rural areas in many different ways, adaptation to climate change is likewise reflected in a wide range of measures.
Under the forestry promotion programme, we support climate- and site-adapted forest conversion on preferential terms, currently at a 20-basis point discount to the standard rate. Expenditure on forest protection, which is funded on the same terms, also has a positive effect on climate change adaptation. As climate change progresses, the risk of water scarcity increases. As part of our future fields, we support efficient irrigation systems and water storage facilities in order to counter this risk today.
Healthy soil ultimately also helps to minimise the adverse effects of climate change. An intact soil structure can absorb water during periods of heavy rainfall and release it again during periods of heat. As part of the Nature-based Climate Action Programme of the Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear Safety, Rentenbank supported investments in machinery and equipment for soil-conserving cultivation, the reduction of soil pressure, and extensive grassland management in the reporting year. Among other things, the use of such machinery helps to preserve the soil structure and thus ensures the climate-regulating function of the soil.
SDG mapping as a complementary strategic ap-proach
SDG mapping is used to systematically record the positive contribution of the promotional business to achieving the Sustainable Development Goals (SDGs). It is based on the intended use of the programme loans and enables a structured allocation of new business to relevant sustainability goals, particularly in the areas of renewable energy, conventional and organic agriculture and rural development.
The SDG mapping is reviewed annually, further developed methodically and made publicly available.
Risk strategy
The implications of the risk strategy are described in section E1-9.