Green Premium as Credit Weapon

“Do you think a time will come when Rabobank will only finance commodities that are certified as sustainable? This year, we were the sustainability coordinator of a $2.5 billion revolving credit facility with green features. Customers are getting discounts on the interest rates they pay as long as they meet certain sustainability criteria. I suspect that, going forward, companies that aren’t green, or less green, will still get financing, but they’ll have to pay a premium. It’s different for palm oil. The consumer pressure is different. We don’t finance companies that aren’t RSPO members. We may sometimes make an exception if a company isn’t RSPO certified as long as it’s committed to become RSPO certified and has put the correct milestones in place. We can help them on that journey.”

“In terms of sustainable financing, which commodity presents the greatest challenges? If you look at my area of responsibility, most challenges are in cocoa and coffee, simply because of their level of complexity and the need to improve the livelihood for smallholders. We spend a lot of time on those two commodities, even though they’re much smaller in terms of volume than grains and oilseeds. Our challenge is to stop deforestation and prevent climate change, while feeding the world: how can those two objectives coexist? We have to embed sustainability in the business and our daily thinking. Our ‘sustainable toolkit’ includes services and financing from Rabo Foundation/Rural Fund, as well as the fund we established with the United Nations called Agri3 to combat deforestation and enhance the livelihood of smallholder farmers.”