What agricultural finance institutions can learn from Farm Credit Canada’s $1.9 billion sustainable finance goal

Farm Credit Canada (FCC) recently published their Sustainable Finance Framework, outlining their commitment to provide $1.9 billion CAD in sustainable financing to customers by 2030. This significant investment will enable Canadian producers to invest in practices that build resilience against extreme weather and rapidly changing markets, helping to safeguard their livelihoods and our food system.  

FCC’s ambitious plan is a valuable example of the growing action agricultural finance institutions are taking globally. In our latest survey of more than 150 banks across 17 countries, we found that 94% view climate change as a material risk to their business, and 88% reported factoring climate risk into their overall decision-making. 

Here’s what ag lenders around the world can learn from Farm Credit Canada’s strategy to advance their efforts to help farmers, ranchers and agribusinesses invest in sustainability: 

Public sustainability goals signal strong support for the agricultural sector 

FCC is a government-owned entity — also known as a Crown Corporation — whose mission is to strengthen Canadian agriculture through specialized financing. The organization’s services are dedicated solely to supporting the sector, providing roughly a third of all farm lending in Canada to farmers, ranchers, agribusinesses and agrifood customers.  

With its $1.9 billion sustainable finance goal, FCC is investing in the future of Canadian agriculture and agrifood, helping the sector lead in sustainable food production while ensuring customers’ long-term resilience and productivity. 

By setting this target publicly, FCC is showing its commitment to helping farmers and ranchers invest in sustainable practices on their operations.  

Financial solutions can unlock sustainable practices for more farmers 

FCC will distribute its $1.9 billion in sustainable finance toward eligible practices and technologies outlined in their Sustainable Finance Framework. The framework was designed as a transition tool to support and encourage the sector’s progression toward the adoption of sustainable agricultural practices. It was developed with input from industry stakeholders and guided by scientific expertise from Environmental Defense Fund.  

FCC will use the framework to create financial solutions that address common challenges farmers face when investing in sustainable practices and technologies. These challenges include prohibitive upfront costs for equipment and short-term risks associated with implementing a new practice.  

This work on financial solutions builds on existing initiatives. For example, in 2022, FCC launched its Sustainability Incentive Program in collaboration with agriculture companies and organizations. By 2025, the program had provided incentives of up to $4,000 per year to more than 650 farmers, in combination with matching incentives from partners like McCain, Cargill and Canadian Roundtable for Sustainable Beef.  

By creating these programs, FCC is in good company — 85% of agricultural finance institutions surveyed by EDF offer products or services with a sustainability focus. 

In collaborating with agricultural organizations and companies in the value chain, FCC is also supporting their farmer clients in accessing better market opportunities. More than half of the agricultural finance institutions surveyed in our latest global survey identified demand for sustainably-grown products from consumers and the value chain as a top business opportunity. 

FCC is continuing to expand its sustainable finance offerings to achieve its $1.9 billion goal, including exploring the development of a toolkit for incentives and flexible credit solutions to support customers as they transition to practices that increase resilience to extreme weather, improve biodiversity and reduce greenhouse gas emissions. FCC is combining tailored financial and non-financial offerings to support customers in overcoming barriers to adopting sustainable practices. 

Strong risk management and internal expertise are key to advancing sustainable finance 

To support its sustainable finance goal, FCC is taking a close look at climate-related risks within its loan portfolio. By identifying regions and customer types most vulnerable to changing weather and water conditions, they can funnel support where it’s needed most. FCC has also invested in climate modelling and data tailored to agricultural loan portfolios, allowing the industry to better assess, manage and help customers adapt to climate risks.  

Additionally, FCC is strengthening its offerings by training staff and dedicating a team to sustainability insights. These internal teams work closely with on-the-ground stakeholders, farmer organizations and industry partners to identify the most effective ways they can support Canadian agriculture with sustainable finance solutions. By building internal capacity and partner relationships, FCC is positioning itself to achieve its ambitious sustainable finance target in a way that best serves their customers. 

FCC’s comprehensive approach provides a roadmap for agricultural finance 

FCC’s ambitious sustainable finance goal is backed up by a holistic strategy, from risk assessment to partnership and product development. This strategy ensures that FCC will be able to meet farmer demand for sustainable finance and help them connect with market opportunities.  

While these actions show clear leadership, our latest global survey results also demonstrate that FCC is not alone among its agricultural finance peers, who are increasingly moving from awareness to action on climate and sustainability. The components of FCC’s sustainable finance strategy provide a valuable roadmap for any agricultural finance institution on its own climate and sustainability journey.