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Banking for Impact on Climate in Agriculture (B4ICA)

The agriculture and land use sectors represent one-quarter of global greenhouse gas (GHG) emissions. They comprise a complex and extensive value chain with varying emissions sources, types, and quantities. Without focused effort across the globe, agricultural emissions threaten our ability to limit warming. To respond to stakeholders, banks must move toward reducing GHG emissions in their agriculture portfolios in alignment with global climate targets toward net zero. B4ICA brings together leading banks and civil society to chart a path toward a more sustainable agriculture sector.

    The challenge

    There is currently no accepted top-down methodology or effective means for measuring and disclosing the greenhouse gas (GHG) emissions of banking portfolios in the agricultural sector. This compromises the ability of lenders and institutions to evaluate their holdings and to incentivize GHG emission reduction pathways at sectoral, regional and client levels. It also ultimately prevents the alignment of banks from meeting the goals of the Paris Climate Agreement.

    The business case

    There is momentum in the financial sector to act now, with an increasing number of financial institutions committing to measuring, disclosing and, over time, reducing their financed emissions (e.g. Net-Zero Banking Alliance, PRB Collective Commitment to Climate Action, etc.). By creating a quorum of international banks to drive the design and alignment of agricultural portfolios toward the Paris Agreement, we can develop a credible and inclusive set of tools and methodologies that address current data gaps and cover different regions and agriculture sub-sectors, and provides an actionable pathway towards Net Zero.

    The solution

    The B4ICA Initiative aims to convene and facilitate a pre-competitive coalition of companies and stakeholders to develop a method, tools and guidance for financial institutions to assess and disclose GHGs across their agriculture portfolios. The effort also aims to develop action-oriented guidance to support the implementation of Agriculture emissions management and mitigation solutions and to establish a global standard for financial institutions to achieve a common baseline for ambitions and a measurement methodology. This should also align with critical emerging initiatives, such as the PCAF and the UNEP FI Net Zero Banking Alliance Project.

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