According to EDF, 94% of AFIs see climate change as a material risk to their organization — up from 87% in 2022 — and 90% now have internal or external sustainability goals in place. The report indicates that 85% already offer sustainability-focused financial products or services, with 88% planning to expand them within three years. These range from loans for regenerative agriculture and energy-efficient irrigation to climate-linked insurance products.
In Canada, Farm Credit Canada (FCC) reports that it is expanding sustainability-linked lending and incentive programs.
Amr Addas, Senior Director of Sustainable Finance and Insights at FCC, shared,
“Canadian farmers, ranchers, and agri-food businesses are striving to build resilience to increasingly unpredictable and severe weather while meeting global demand for sustainably produced goods. We’re continuing to explore innovative financial solutions that drive long-term sustainability and growth — alongside platforms like AgExpert and FCC Capital’s investments in ag technology.”
While global lenders are advancing, U.S. institutions lag. Every non-U.S. respondent reported offering sustainability-linked financial services, compared to fewer than half in the United States. Despite political headwinds, 87% of AFIs globally see a business case for pursuing sustainability and resilience measures, citing both risk mitigation and new revenue opportunities.
Still, significant barriers remain. 44% of respondents identified unclear return on investment as a top obstacle to scaling sustainability initiatives, followed by limited access to blended finance, internal resources, and reliable environmental data. The study also found that 88% of lenders expect their customers to face negative financial impacts from climate change, particularly through higher insurance premiums and production costs.
EDF’s findings underscore a broader transition: agricultural finance is becoming a front line in climate adaptation. Institutions are building new tools for climate risk assessment, scenario modeling, and sustainability reporting — steps that can safeguard both food systems and financial stability.
As EDF’s executive vice president for impact, Angela Churie Kallhauge, noted,
“Climate-focused loans and financial services help farmers adapt to harsher growing conditions to protect food production and their livelihoods and reduce lenders’ risk exposure.”
