RTRS Certification enables attractive financial products for certified producers
For some financial institutions, the Round Table on Responsible Soy (RTRS) certification guarantees that producers adopt sustainable agricultural practices. Thus, for many of these institutions, the certification serves as a tool for producers to access credit conditions and other more favourable financial products.
The recognition of RTRS certification by financial institutions is due to the fact that they consider the RTRS Standard for Responsible Soy Production as a reliable tool that can demonstrate that producers, in addition to implementing sustainable and environmentally responsible agricultural practices, also comply with current legal regulations. Therefore, RTRS-certified producers are viewed as lower-risk clients, facilitating the granting of credits and other financial products.
Financial institutions, in addition to promoting sustainability and supporting producers who produce responsibly, also need to meet their own sustainability goals. In this context, supporting producers with RTRS certification helps these entities achieve their objectives by aligning finances with environmental protection and responsible practices.
In summary, the financial benefits developed and offered by these institutions encourage the ongoing adoption of responsible agricultural practices; and financial backing has a multiplier effect, stimulating other producers to seek certification and motivating the expansion of sustainable agro-activities.
Furthermore, the recognition from financial entities of the work of certified producers reinforces the importance of the RTRS seal as a competitive differentiator in markets committed to responsible supply chains.
Financial solutions for certified producers in Brazil
- Itaú BBA – Economic advantages for certified producers
Beatriz Domeniconi, specialist in Environmental, Social, and Governance (ESG) Agro at Itaú BBA, states that the bank’s strategy to support the transition to low-carbon agriculture is based on the provision of credits that encourage the adoption of good production practices – “Green” Products/ESG Agro.
Itaú BBA has a specific ESG line that promotes and recognises two certifications: RTRS for soy and Rainforest for coffee, citrus, and fruit. This line finances the agribusiness sector annually for large farmers with a minimum annual revenue of five million reais.
“Incentivising certified production is one of the practices we consider in our ESG product portfolio for Agro,” she asserts.
In the case of soy, “we understand that certifications like RTRS, with broad protocols and good governance, have a significant impact on maintaining good practices already adopted by producers, guidance for continuous improvement, and transparency for the other links in the value chain, in addition to potential value addition, given that the consumer market is increasingly interested in knowing the origin and processes of the products they consume,” adds the specialist.
She emphasizes that the line is not intended to finance the costs associated with obtaining/maintaining certification, but rather to direct resources to those who have already adopted this practice and are seeking commercial advantages for their businesses.
- AGCO Finance: Financing for Agricultural Equipment
AGCO Finance, a joint venture formed by AGCO, Rabobank, and DLL Bank, is the financial arm of the AGCO group supporting the purchase of agricultural machines and equipment from the brands Fendt, Valtra, Massey Ferguson, Challenger, and Trimble Agriculture Solutions.
The group has a fund dedicated solely to financing clients classified as “Green”. This includes Brazilian clients with the RTRS seal, Pro Carbono, Sou de Algodão, among others.
“Since 2022 we have been a member of RTRS, and in 2023 we worked with the association granting rates up to 10% lower for RTRS-certified clients,” says Pablo Ruanoba, representative of AGCO Finance.
According to DLL’s regional sales coordinator, Ivan Carlos Metz, the idea is for the market to understand that clients who are environmentally conscious enjoy numerous benefits, one of which is reduced rates for obtaining credit. “We know that these clients are aligned with a better environment,” he adds.
- Rabobank: Financial incentives using RTRS certification as a sustainability indicator
At Rabobank, a member of the RTRS since 2007, the head of sustainability in South America, Taciano Custódio, explains that RTRS certification is an important indicator of the best practices adopted by farmers and assists in the credit process. “In the case of sustainability-linked operations, which are lines of credit that include sustainability targets, farmers need to monitor the key performance indicators defined in conjunction with Rabobank,” he indicates.
RTRS-certified farms, for instance, already have experience in managing environmental and social indicators, facilitating a smoother process for approving lines of credit. The funds can be used according to the client’s project, whether for crop financing or general investments, in Brazil and Argentina, with more competitive conditions and terms tailored to the needs of Rabobank clients.
- UBS and Banco do Brasil: promote the RTRS Certification as the “gold standard”
The partnership between Swiss bank UBS and Banco do Brasil (BB) requires that large corporate clients adopt best practices and thus consider RTRS as a “gold standard”, a risk mitigation in operations.
The RTRS certification demonstrates the value of a multi-sector approach and the importance of articulating a commitment to sustainability, understanding that this is a shared responsibility.
Given the high global demand for sustainable and regenerative production, it is essential that producers have access to incentives and are recognised. Sustainability is a responsibility for everyone, and each actor plays an essential role in making it possible.
RTRS celebrates the existence of these incentives, which serve as an example from financial entities, and looks forward to their expansion to more soybean-producing countries
