Leveraging data and partnerships to scale sustainable agricultural finance in 2026

Published: February 2, 2026 by Vincent Gauthier

Extreme and unpredictable weather is increasingly affecting farmers and the financial institutions that support them. Over the past year, ag lenders have expanded their efforts to accelerate farmers’ sustainability goals by launching new financial products that support the transition to sustainable practices and embedding climate risk management into their businesses.

The latest results of our global ag finance survey are clear: ag lenders recognize that climate impacts are a financial risk to their businesses and farmer customers’ livelihoods. More than ever, ag lenders are looking for ways to proactively help their customers invest in practices that build resilience. To do that, they need data on how climate change is projected to affect their loan portfolios and farmers’ operations, and partnerships to deliver financial solutions that enable farmers to adapt at scale.

Building the business case for sustainable ag finance starts with data

To manage climate risks effectively, lenders need clear, reliable data on how they are likely to impact farms and financial portfolios.

This year, EDF launched a climate risk assessment tool — developed in collaboration with Farm Credit Canada and three major agricultural finance institutions in the U.S. — that provides ag lenders with data-driven projections of climate impacts on crop yields and farm financial outcomes through mid-century. More than 20 lending institutions, representing $1.5 trillion in assets under management, were trained on how to use the tool. They identified several ways to apply the climate data to help farmers build resilience to climate change, including analyzing climate risks in their loan portfolios and providing customer education.

Along with climate risk data, ag lenders need evidence that sustainable practices deliver financial benefits and reduce the exposure of farmer and rancher customers to financial risks.

EDF, the Cornell Atkinson Center for Sustainability and the Foundation for Food & Agriculture Research recently launched the Resilient Ag Finance and Insurance Research Collaborative to provide the analysis lenders and insurers need to develop effective, proactive solutions for their customers. The Collaborative will also require researcher applicants to partner with an ag lending or insurance provider to ensure that the resulting findings can be implemented in the private sector.

Partnerships can help scale financial solutions and maximize farmer benefits

As research efforts progress, lenders should work with partners to pilot financing, education and service approaches with farmers. Trying out different approaches helps ag lenders gain the experience necessary to identify the most effective sustainable solutions and how to bring them to scale. By collaborating with partners across the value chain, lenders can better manage the risks of implementing these solutions for the first time.

For example, Farm Credit Canada launched its Sustainability Incentive Program in 2022, partnering with agricultural companies and organizations to provide financial incentives to producers, combined with matching contributions from industry partners. The organization has also developed a Sustainable Finance Framework to guide progress towards its $1.9 billion CAD sustainable finance target by 2030. In addition, FCC continues to refine its sustainable finance strategy and is developing new capital solutions to encourage the adoption of sustainable agricultural practices.

Similarly, CoBank originated its first sustainability-linked loan with Heartland Coop in 2024 which provides an interest rate reduction to the cooperative if they achieve water quality and farmer engagement targets. Launching the loan provided valuable insights into customer demand for this type of loan and collaborative approaches. Drawing on their experience, CoBank is now working with investment partners to create a scalable model that can deliver loan solutions that support customers’ sustainability journeys.

The past year of progress from ag lenders makes it clear that building data-informed evidence on climate risks and sustainable practices, together with practical experience in financial products that support their adoption, can drive stronger action and more effective financing across the industry. As we enter the new year, more agricultural lending institutions can take action by investing in data and research that measures the value of sustainable agricultural practices, and by establishing partnerships to test and scale financial solutions with farmers.