ESD-2 – Entity-specific disclosure: promotion of rural areas

Classification in the sustainability statement

The promotion of rural areas is a central element of Rentenbank’s statutory promotional mandate and has material social impacts on people and communities in rural regions. The focus of this support is on regional and community-level effects, particularly with regard to quality of life, social participation and structural stability.

Due to its cross-cutting regional nature, this topic cannot be fully assigned to a single ESRS topical social standard. In particular, the focus is neither on individual labour-related effects nor on supply chain- or product-related effects, but on indirect social effects at regional level.

Against this background, Rentenbank reports on the social promotion of rural areas as an entity-specific disclosure. The focus of this chapter is on the social impacts of funding activities at regional and community level, in particular with regard to:

• quality of life and equivalent living conditions;
• social participation and social cohesion;
• services of general interest and public infrastructure; and
• regional and social resilience.

The specific social impacts of the promotion of agricultural enterprises are presented separately in the following chapter. The positive and negative impacts, risks and opportunities of our business activities, as well as the key components of our upstream and downstream value chain in relation to climate change, are presented in E1 – Climate change.

Scope of application and affected groups

The promotion of rural areas is aimed in particular at the following indirectly affected groups:

• residents of rural regions;
• local communities and civil society actors;
• municipalities, municipal institutions and municipally owned enterprises;
• small and medium-sized enterprises as well as regional initiatives; and
• players in the social, cultural and tourism infrastructure in rural areas.

We define our geographical scope for rural areas as towns and municipalities with fewer than 50,000 inhabitants outside of urban centres. On our website, you can check whether the investment location falls under rural areas by entering the postcode of the investment location. 

Impacts, investment objects and beneficiaries

The social impacts of the promotion of rural areas arise from Rentenbank’s role as a public promotional institution. As part of its statutory mandate, Rentenbank provides financing instruments that are used by municipalities, enterprises and other stakeholders for investments in rural regions. These investments contribute to the provision of services of general interest and to strengthening regional infrastructure, as well as the local social and economic framework conditions.

Rentenbank steers these social impacts through the design of its promotional programmes. Funding conditions, funding purposes and exclusion criteria define the substantive framework within which the funds are used. The specific nature of the social impacts depends on how the supported measures are implemented by the respective project promoters and on regional, structural and temporal factors.

The social impacts generally materialise at regional level and are predominantly long-term in nature. They relate in particular to quality of life, social participation, the stabilisation of rural structures and the safeguarding of equivalent living conditions.

Regional resilience and structural stability

Rural regions often face specific challenges, for example as a result of demographic change, outmigration or structural economic disruption. The promotion of rural areas aims to strengthen the structural and social resilience of these regions by creating sustainable long-term conditions for living, working and social life.

The social impacts are felt primarily at regional level and are geared towards long-term stabilisation.

Quality of life and services of general interest

Support for investment in technical and social infrastructure helps to safeguard access to basic public services in rural regions. These include areas such as energy and water supply, broadband coverage, transport links, education, health and care infrastructure, and municipal facilities.
Such investments help to safeguard equivalent living conditions and strengthen the attractiveness of rural areas as places to live and work.

Social participation and social cohesion

Support for municipal infrastructure, local amenities and publicly accessible facilities promotes social participation and social cohesion. Investments in meeting places, cultural facilities and social infrastructure support interaction between different population groups and contribute to the stability of local communities.

Indirect effects of business-related support

Support for economic activity in rural areas can also contribute indirectly to social development, for example by safeguarding regional value creation and employment. In this chapter, these effects are classified solely as supporting social side effects. They are not quantified or allocated to individual beneficiaries.

Governance, control and due diligence

The promotion of rural areas is an integral part of Rentenbank’s statutory promotional mandate and is embedded in the existing governance and management structures. The promotional programmes are designed on the basis of clearly defined funding conditions, state aid rules, and internal exclusion and funding criteria.

Due to the on-lending principle, social impacts are managed primarily at programme level. Rentenbank takes social aspects into account as part of its strategy, business model and materiality analyses. Owing to the structure of the funding model, direct influence over the implementation of individual projects is limited. The social impacts of promoting rural areas were identified as a key social impact area as part of the double materiality assessment.

Classification in the strategy

As with the promotion of agriculture, special promotional lending is also the key lever for generating positive effects in rural areas. Accordingly, actions, metrics and short- to medium-term quantitative targets are also being developed for the customer groups relevant to rural areas.