Agricultural finance institutions are building resilience through climate and sustainability action

Global survey shows growing momentum across more than 150 institutions in 17 countries to help farmers adapt to extreme and variable weather.

Agricultural finance institutions — and the farmers they support — are facing increasing risks from extreme and unpredictable weather within a rapidly changing economic landscape. These challenges affect farmers’ ability to reliably grow the food that communities depend on and create financial risks for lenders who provide essential credit for farms.

A new global survey from Environmental Defense Fund of 156 agricultural finance institutions across 17 countries found that the majority are moving from awareness to action to manage weather-related risks and support sustainable farming practices and technologies.

This first-of-its-kind survey series, first conducted in 2022, provides valuable insight into how agricultural finance institutions are building resilience across their portfolios and their farmer customers’ operations.

Key findings from the survey include:

• Extreme and variable weather is a financial risk: Globally, 94% of institutions surveyed see extreme and variable weather as a material risk to their business — up from 87% in 2022 — with near-unanimous agreement among respondents based outside of the U.S.
• Farmers are exposed to climate risk, which means banks are too: 88% of respondents expect their farmer customers to be negatively affected by climate impacts, particularly through higher insurance premiums and production costs.
• Sustainable finance is expanding: 85% of agricultural lenders surveyed currently offer sustainability-focused financial products or services, and 88% intend to add new offerings over the next three years.

Farmers are feeling the impacts of shifting seasons and severe weather on their crop yields and livelihoods, and their lenders are too.

Agricultural finance institutions serve a vital role in helping farmers adapt to these changing conditions. Banks can better manage these risks and support farmers’ long-term resilience by:

1. Deepening their understanding of farmers’ financing needs related to sustainability and resilience.
2. Offering financial products and services that enable the transition to sustainable practices and integrate the value of resilient agriculture.
3. Collaborating across the agricultural value chain to deliver holistic and flexible financing solutions to farmers.
4. Proactively assessing climate risk in their portfolios and identifying opportunities to build resilience.

These recommendations will support agricultural finance institutions as they advance their efforts to help farmers build resilience, meet rising public and market demand for sustainability, and ultimately invest in a more resilient agricultural system and future.

Join us for a webinar to learn more about the survey results, regional takeaways and how agricultural finance experts are putting sustainability into practice.

Register for the North America session on Monday, December 1 at 1PM ET (6PM GMT) here.

Register for the Europe, Africa and India session on Tuesday, December 2 at 7AM ET (12PM GMT) here.

Our Experts