As Germany’s development agency for agriculture and rural areas, Rentenbank bears a special responsibility for its sustainable development.

In fact, the term 'sustainability', in the sense of the continuous use of ecological resources, was coined within German forestry in the 18th century and has been part of Rentenbank’s DNA ever since.

Significant aspects of ecological sustainability were explicitly enshrined in the Governing Law of Landwirtschaftliche Rentenbank (LR-Gesetz) in 2005. Accordingly, they can be found in our promotional offering. This includes environmental protection within agribusiness, the promotion of renewable energy and regenerative agricultural raw materials, the expansion of organic farming, animal welfare within agriculture, the improvement of infrastructure in rural areas, and consumer protection within agribusiness (LR-Gesetz Section 3, 3-5). As a federal public law institution with a statutory promotional mandate, Rentenbank is dedicated to the common good. Distributable profit is solely used for promotional purposes, too. 

Rentenbank has been working on an integrated sustainability strategy based on Agenda 2030 (the United Nations Sustainable Development Goals) since 2020.

Areas of activity
Rentenbank’s business and sustainability strategies are closely linked. While ESG (environment, social and governance) criteria are being integrated into its core business, Rentenbank is focused on the following areas of activity:

1. Sustainable corporate governance: Sustainability strategy and management, communications and stakeholder engagement, corporate governance and corporate citizenship
2. Sustainable banking: ESG integration in funding, capital market and risk management
3. Sustainable HR management: Creating an attractive working environment, HR management, increasing and developing staff
4. Sustainable banking operations: Operational ecology, sustainable procurement

Key standards and objectives
Rentenbank bases its sustainability strategy on a raft of sustainability-oriented standards and objectives.

• Rentenbank subscribes to the UN Sustainable Development Goals (SDGs), which is the internationally recognised framework for sustainable development, and to the aims of the Paris Climate Agreement for reducing global warming (cf. materiality, criterion 2).
• Rentenbank is committed to national and international initiatives which contribute to sustainable development. Therefore, Rentenbank subscribes to the United Nations Universal Declaration of Human Rights. Within its sphere of influence, Rentenbank respects and protects the universal human rights and the core labour standards of the International Labour Organization (ILO) (cf. ILO Declaration on Fundamental Principles and Rights at Work). 
• As a member of the International Capital Markets Association, Rentenbank conforms with ICMA Green Bond Principles and is making a contribution to further developing the market for sustainable issuances.
• The comprehensive compliance with legal and internal requirements for the Prevention of Fraud and Corruption and Prevention of Money laundering is a mandatory prerequisite for the Bank’s successful operations.

In January 2020, Rentenbank introduced a materiality analysis in order to identify, evaluate and prioritise relevant sustainability issues. During this review, both the impacts of Rentenbank’s business activity on sustainability (inside-out perspective) and the impact of sustainability on Rentenbank business activities (outside-in perspective) were analysed.

Inside-out perspective (business activity impacts)
The promotional business division at Rentenbank has the greatest impact on the environment and society. As a result, our promotional business is defined as a key issue for sustainability. With the help of SDG flagging, Rentenbank has disclosed the contributions it has made to promoting sustainable development and how its promotional business can be made even more sustainable. These reference points from within our statutory mandate and its implementation relate to the following SDGs:

SDG 2 (end hunger, achieve food security and improved nutrition and promote sustainable agriculture):

• Promoting agricultural environmental protection
• Expanding organic farming

SDG 7 (ensure access to affordable, reliable, sustainable and modern energy for all):

• Promoting renewable energy in agriculture and rural areas

SDG 9 (build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation):

• Improving infrastructure in rural areas
• Promoting agriculture-related innovations

SDG 12 (ensure sustainable consumption and production patterns):

• Promoting regenerative raw materials and bioeconomy
• Improving animal welfare in agriculture
• Promoting consumer protection in relation to agricultural products

SDG 13 (take urgent action to combat climate change and its impacts):

• Promoting resilience and adaptability to climate-oriented risks and natural disasters in agriculture and forestry
• Promoting renewable energy in agriculture and rural areas
• Promoting energy-efficient and low-emission technology in forestry and agribusiness
• Promoting reforestation

SDG 15 (protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss):

• Preserving and protecting forests and promoting sustainable forestry
• Promoting sustainable use of rural eco-systems and preserving biodiversity

Outside-in approach (opportunities and risks)
A risk inventory is used to obtain a structured overview of all risks that have a negative impact on Rentenbank’s net assets, capital resources, results of operations, or liquidity situation. Opportunities and risks resulting from changes within environmental, social and governance (ESG) risk are also considered here. However, sustainability risks are not a standalone type of risk. Rather they are a part of other types of risks that are already known (drivers of risk). The impact of sustainability risks on the risk-bearing capacity has already been assessed by means of scenario analyses. Several projects dealing with ESG opportunities and risks are in progress.

Rentenbank currently sees the greatest outside-in risks in climate-change related risks.
Opportunities for Rentenbank from sustainability issues are in the following areas:

• Product innovations such as the emission of green bonds or the introduction of new promotional products
• Accompanying of the statutory promotional mandate through increasing solid backing in society for issues such as the sustainable development of agriculture and the expansion of renewable energies (modernisation and development of climate and environmentally-friendly technologies and cultivation methods)
• Sustainability as a positive factor in our recruitment of qualified new employees.

Rentenbank has developed its Sustainability framework plan by consolidating the risk assessment, the inside-out approach and the opportunity analysis (cf. objectives, criterion 3).

Rentenbank has developed a sustainability programme in order to more deeply entrench sustainability in its management, its banking, banking operations and HR management in the future. Here, management issues of great importance to the Bank’s business model (outside-in) and significant socio-environmental impact (inside-out) have been prioritised. The following objectives are to be implemented as part of Rentenbank’s sustainability programme in the medium term. However, due to the far-reaching effect along the value chain, our focus is on the development of sustainable banking and governance:

Sustainable corporate governance:

• Further development of guidelines and standards that are applicable company-wide and related to sustainability
• Expanding the management structures to include sustainability management across the entire bank
• Enhancing stakeholder communications on sustainability issues
• Expanding reporting on sustainability Implementing regulatory requirement in relation to sustainability

Sustainable banking:

• Review of current funding in relation to sustainable impacts
• Promoting and expanding funding with positive sustainable impacts
• Taking sustainable criteria into account in our loans portfolio
• Expanding our sustainable financial investment offering (such as green bonds)
• Entrenching ESG risks in the risk inventory und risk reporting in a systematic way

Sustainable banking operations and HR Management:

• Consideration of aspects relating to sustainability during the renovation of our building
• Sustained reduction in the use of resources and emissions
• Promoting an attractive working environment
• Supporting the personal and professional development of our employees

As part of the on-going ESG projects, the medium-term objectives of our sustainability programme up to the end of 2021 have been defined by the Management Board. The Board has also scheduled the objectives and paired them with measurable indicators in the business strategy.

Responsibilities
The overall responsibility for the strategy on sustainability lies with the Management Board. The steering committee monitors and oversees its sustainability activities. The steering committee consists of two members of the Management Board and managers from our Promotional Business, Treasury, Economics and PR, Risk Controlling, and Facilities Management. The activities are being set in motion by our sustainability team, which consists of members from all relevant organisational units. The coordination of the key sustainability strategy is located in the PR and Economics department, where this issue is being progressed by our Sustainability Officer. She coordinates the cross-departmental collaboration within the ESG team and the steering committee.

Relationship with the United Nations SDGs
Rentenbank has introduced SDG flagging to ascertain which significant positive SDG contributions it can make (cf. criterion 2, Materiality). As a next step, input indicators (funding volume) are to be implemented for specific SDGs from now on.

As a development agency, there are four points of contact in Rentenbank’s value chain which are of particular importance:

• Collaboration with the Federal Ministry of Food and Agriculture (BMEL) as part of our special promotional loans business
• Collaboration with local banks through which loans at favourable rates are granted to end borrowers
• Collaboration with green bond partners and investors for sustainable investment
• The sourcing of products and services for our banking operations

Collaboration with ministries
As Germany’s development agency for agribusiness and rural areas with a statutory promotional mandate, the BMEL’s upfront requirements regarding the conditions for the granting of loans are of prime importance to Rentenbank. Rentenbank is in regular contact with ministries regarding the contribution it can make in the processing of the federal programmes and the creation of its own promotional programmes, which contribute to the sustainable development of agriculture and rural areas.

Collaboration with local banks
Rentenbank operates as a central funding institution. It awards promotional loans at favourable rates and on a competitively neutral basis through 'on-lending' via local banks. This specifically means that Rentenbank promotional loans are granted to end borrowers via their local banks, which ultimately get the funding from Rentenbank. This presents a challenge for Rentenbank because it does not have any direct contact with end borrowers the way its value chain is structured. However, our special promotional loans are of crucial importance to Rentenbank’s value chain because they have a direct impact on the sustainable development of agriculture and rural areas. Therefore, Rentenbank is engaged in intensive discussions with major banks about how data gathering and monitoring on the level of investment and/or the end borrower can be improved upon. Furthermore, Rentenbank supports communication about sustainability between local banks and end borrowers by providing the leaflet entitled ‘Sustainable Investments’, where the favourable rates offered by Rentenbank are explained.

Sourcing of products and services
Rentenbank endeavours to incorporate environmental protection into its business operations as much as possible and to use environmentally-friendly technologies. We take ecological and ethical aspects into consideration when we make decisions on suppliers and service providers. This includes the fact that Rentenbank does not enter into any transactions which could have a detrimental effect on its reputation.

Various suppliers provide the Bank with the necessary goods and services. As a non-producing company, our value chain principally spans the following product groups solely for the operation of our banking business in Frankfurt am Main as the only site (cf. criterion 11 for further details):

• HR services Facilities Management including energy sources, office furniture and plants
• Electric devices/IT
• Office supplies
• Fleet Marketing and Communications
• Food for the Bank's catering facilities

The review of suppliers’ ecological and social standards is restricted to tier 1 based on seals and reputation.

As an authority contracting within the realms of its status as a public law institution, Rentenbank is obliged to formally tender contracts above certain thresholds within the EU and to abide by the principles of transparency, nondiscrimination and competition in the process.

Under criterium 10 (Innovation and Product Management) we explain how we observe sustainability aspects in our promotional and investment business.