Use nature metrics to inform lending decisions

Rabobank is a Dutch cooperative bank operating in 34 countries. As any large private sector bank, the company faces relevant challenges from climate and nature disruption predominantly through its portfolio clients’ exposure, which face risks of physical disruption due to evolving conditions that threaten the operational viability of their assets. For Rabobank specifically, this exposure includes a significant concentration of lending to food and agriculture in the Netherlands, where the bank finances approximately 75% of farmers.

Rabobank has established commitments on climate and nature aligned with the Paris Agreement and the Kunming-Montreal Global Biodiversity Framework and was a member of the Net-Zero Banking Alliance (NZBA) until 2025 when NZBA transitioned away from a member-based alliance and established its guidance as a framework. Additionally, Rabobank is a founding member of the Taskforce on Nature-related Financial Disclosures (TNFD), publishing its nature vision and approach in 2024.

Within WBCSD's work on "Building the business case for nature interventions", Rabobank has developed a case study on how the bank uses a shared site-level indicator set, the Biodiversity Monitor, to score Dutch dairy clients and inform capital allocation decision. The study assesses what the metrics evaluate, how these inform credit decisions, and how these measures incentivise the clients’ operational and the bank’s portfolio resilience.

Location of the initiative: Netherlands

Rabobank’s Biodiversity Monitor uses a set of KPIs to measure the influence of individual farms on nature, with a focus on the Dutch dairy portfolio. Like the wider agri-food sector, dairy faces major challenges arising from nature and water degradation because it places pressure on ecological boundaries related to air, water, soil and biodiversity.

Rabobank sought a standardised method for measuring farm-level nature performance so that it could compare clients, reward innovation and stronger nature performance, and inform financing decisions. The Biodiversity Monitor for Dairy Farming is a joint initiative of Rabobank, FrieslandCampina and WWF Netherlands, developed with Wageningen University, the Louis Bolk Institute and other sector organisations. The methodology has been integrated into major Dutch dairy-sector sustainability programs, supporting the adoption of biodiversity-enhancing practices across a large share of Dutch dairy farms.

The Biodiversity Monitor for Dairy Farming informs a pricing incentive scheme for relevant financing products offered to sustainability frontrunners in the Dutch dairy sector, which was worth €7.7 billion as of 31 December 2025. Rabobank is currently working on applying the biodiversity monitor’s principles within its arable farming sector portfolio and other sectors/countries.

Sustainability Impact

Rabobank’s Biodiversity Monitor intended sustainability impacts:

• Nature: reduced land-use pressures as one of the main portfolio impact on nature, including reduced nitrogen flows and ammonia deposition, and increased grassland retention, supporting local ecosystem biodiversity;

• Climate: direct mitigation through reduced emissions intensity per unit of dairy output, and direct adaptation through the protection of soil productivity;

• People: direct economic benefits for financed stakeholders through a financial reward mechanism, and secondary economic benefits for third-party stakeholders nationwide through landscape-scale protection of agri-food supplies;

Business Impact

Rabobank’s Biodiversity Monitor intended benefits:

Benefits

• Portfolio resilience: mitigation of transition and physical risks that could increase borrower default risk across a highly concentrated portfolio segment; improved risk oversight and visibility within a segment that is highly dependent on biodiversity and ecosystem services;

• Sector-level alignment: Standardised data points and indicators across a super-majority of a national sector, shared by both lender and client;

• Regulatory and disclosure readiness: availability of client-level data for ESRS E4- and TNFD-aligned reporting; close alignment with TNFD’s agriculture-sector-specific core global metrics on emissions intensity, soil pollutants and non-greenhouse-gas air pollutants;

Costs

Upfront costs associated with long-term, multi-stakeholder methodology development and implementation may delay the realisation of benefits.

Typical Business Profile

Most relevant to organisations in financial services, agriculture and livestock farming.

Approach

The approach includes the following steps:

1. Mapping the agricultural portfolio, to locate nature-related dependencies, impacts, risks and opportunities

2. Identifying key measures for operationalising biodiversity for dairy farming, focused around four pillars: functional agrobiodiversity, diversity of landscape, diversity of species and regional biodiversity

3. Developing a set of seven key performance indicators to measure Nature state:

   • percentage of permanent grassland

   • percentage of protein produced on own land or within 20km

   • nitrogen soil surplus per hectare

   • ammonia emissions per hectare

   • greenhouse gas emissions per kilogram of milk and per hectare

   • percentage of herb-rich grassland

   • a composite Nature & Landscape indicator of managed land under contract.

4. Integrating reporting into the existing data system

5. Creating a scoring system using the indicators to rank the Nature performance of Dutch dairy clients

6. Developing a financial mechanism to incentivise systemic transition to sustainable farming modes through a pricing incentive scheme, based upon interest rate reductions, for leading performers

Stakeholders Involved

The Biodiversity Monitor for Dairy Farming is a joint initiative of three founding partners – Royal FrieslandCampina, Rabobank, and WWF Netherlands (the Dutch chapter of the World Wide Fund for Nature) – each pursuing biodiversity restoration in agriculture from their own institutional perspective. Development work also drew on contributions from dairy farmers, researchers, and agricultural environmental and conservation organizations, including regional collectives. Technical development involved the Louis Bolk Institute and Wageningen University and Research Centre. In order to improve overall engagement levels, De Duurzame Zuivelketen (Sustainable Dairy Supply Chain) and the Versnellingsagenda Melkveehouderij (Dairy Farming Acceleration Project) are also affiliated with this initiative.

Looking ahead, the founders aim to bring in further supply-chain partners and stakeholders, including entities such as leaseholders and government agencies, to help the Biodiversity Monitor become a widely adopted, independent standard.

External Links

• Value Nature – Rabobank’s nature vision and approach

• Annual Report 2025

• Biodiversity Monitor for Dairy sector

• Sustainability – Biodiversity Monitor - Rabobank

• Agri-food Vision: Working Together Toward a True Value Food System - Rabobank

• The Agri-food Sector’s Current Challenge - Rabobank