Biodiversity Monitor: Method for Biodiversity Protection in agriculture
A growing number of agricultural businesses have come to recognise nature and the environment as a value-added resource that can help them to improve their business operations. Not only can farms become more resilient by improving the health of their livestock and crops, they will also produce more sustainable output and sell it at a higher price and on more favourable terms – including lower interest rates, more advantageous lease conditions, and less red tape in obtaining permits.
In the Netherlands, Rabobank and the World Wide Fund for Nature Netherlands (WNF) have teamed up with dairy company FrieslandCampina, dairy farmers and other stakeholders in the dairy industry to develop the Biodiversity Monitor. It provides dairy farmers with insight into the benefits the environment offers them. For one, farmers can reduce their operating costs through sustainable management while at the same time benefiting from lower interest rates, a better market price or more advantageous lease conditions.
Some of these benefits even come in different varieties. Farmers might pay a lower interest rate, for example, by taking out a Rabobank Green Loan or Impact Loan or, alternatively, through a bonus/penalty system for milk prices.
Impact Loans are a form of blended finance[i] provided by Rabobank at a reduced interest rate to businesses which can demonstrate a high sustainability performance, with the European Investment Bank (EIB) providing the capital. This is an excellent example of a public-private partnership in lending. Rabobank is currently also exploring options for similar partnerships with multilateral banks, institutional investors and governments for projects in countries such as Chile, Brazil, India and Indonesia.
Rabobank and the World Wide Fund for Nature will use their partnership to invest in the economic gains of natural capital in the coming years.
[i] ‘Blended finance’ refers to the strategic allocation of public or private funds to leverage additional capital flows (public and/or private) for emerging and pioneering markets. This form of finance has the potential to attract new sources for finance solutions to major challenges (as defined in the Sustainable Development Goals). Source: OECD.