BANGKOK, Thailand – The United States Agency for International Development (USAID) Green Invest Asia project, in collaboration with sustainability consulting firm South Pole, has completed Rabo Foundation’s first portfolio-level carbon accounting analysis of its agricultural investments in Indonesia. A dairy cooperative contributed the most emissions and coffee businesses the least, proportionally, based on each business’s emission factor, revenue and the amount of the foundation’s investment.

Four farmer cooperatives and small and medium enterprises (SMEs) representative of the foundation’s overall portfolio in Indonesia participated, with 150 farmers providing field-level data in response to commodity-specific questionnaires in the local language. The assessment found the main sources of emissions for two participating coffee (arabica) businesses and one soy (black and yellow) SME were carbon stock changes (i.e., land use change from forest to agriculture), the application of fertilizers and crop agents, and fertilizer production. The dairy cooperative’s main sources of emissions were feed production, manure management, and enteric fermentation (methane emitted from cow digestion).

“The findings have been instrumental in further developing Rabo Foundation’s environmental impact strategy – a key focus of our investments in farmer organizations,” said Mark Koppejan, the foundation’s Asia program manager. “As there are many factors influencing greenhouse gas emissions at farmer level, we are eager to work with other impact investors to expand collective knowledge and data on this topic.”

Rabo Foundation – the corporate foundation of Rabobank Group, a global leader in food and agriculture lending – provides financial services to agricultural cooperatives SMEs in over 20 countries globally. USAID Green Invest Asia, which facilitates investments into low-emission agriculture and forestry businesses in Southeast, partnered with the foundation to design and implement a pilot carbon footprinting project in Indonesia. Together with South Pole, USAID Green Invest Asia helped Rabo Foundation assess and report on attributable greenhouse gas (GHG) emissions from its 2019 investments in Indonesia.

How to attribute GHG emissions?

“Truly climate-smart lending is possible only with a GHG accounting methodology in place for each investee to ensure expected reductions are achievable, and that loans target relevant sources of emissions,” said Christy Owen, head of USAID Green Invest Asia. “Agribusiness, impact investors and financial institutions alike can facilitate greater adoption of low-emission farming practices; we stand ready to support translating sustainability commitments to measurable practice.”

Using the Greenhouse Gas Protocol to identify the share of emissions applicable to Rabo Foundation’s debt investments, the four organizations analyzed contributed 7,433 tons CO₂eq (carbon dioxide equivalent) in 2019, with the dairy cooperative accounting for the foundation’s largest share of GHG footprint (91 percent), followed by the soy cooperative (7 percent). The coffee businesses contributed 2 percent or less each.

“The pursuit of empirical studies and raw ground truth are often overlooked in the financial sector,  yet deep dives into farm-field data, piloting methodologies, and cross-sectoral insights can advance financial innovation, efficacy, and inclusion,” said Diva Tanzil, a sustainability consultant with Rabo Foundation. “It is now more relevant than ever for financial institutions to test, experiment, and take ecological factors into account.”

Rabo Foundation  is reviewing the GHG accounting findings and recommendations to inform its climate-smart lending practices in Indonesia, and globally. A summary of the study can be downloaded at https://greeninvestasia.com/research/.