Sustainable Loan Terms & Conditions

European Union Taxonomy

The EU Taxonomy Regulation (EU 2020/852) establishes six environmental objectives

  • Climate change mitigation

  • Climate change adaptation

  • The sustainable use and protection of water and marine resources

  • The transition to a circular economy

  • Pollution prevention and control

  • The protection and restoration of biodiversity and ecosystems

The farmer or the company engaged in agricultural business (hereinafter jointly referred to as the Farmer), to be considered by Swedbank as the Sustainable Farmer must, as specified below (a) contribute substantially to Climate change mitigation, (b) do no significant harm to the other 5 objectives, and (c) comply with minimum social safeguards. The fact that the Farmer meets the Sustainable Farmer requirements must be supported by the respective Sustainable Farmer certification from the Swedbank certification partner. The Farmer must follow the requirements of the Swedbank certification partner which are used by the latter in order to establish whether the particular Farmer follows the above-mentioned Sustainable Farmer criteria and submit to the certification partner the true and detailed information as required by the latter.

Note that agriculture is not yet part of the EU Taxonomy Regulation, but has been covered in various reports and proposals. Therefore Sustainable Farmer requirements are based on the following information:

Swedbank is entitled to unilaterally amend the current Sustainable Farming Terms and Conditions (incl. amending or supplementing the Sustainable Farmer criteria) if agriculture is included in the European Union Taxonomy Regulation (EU 2020/852), or new proposal regarding regulation of sustainable farming is issued which affect sustainable farming practices, or other regulatory activities regarding sustainable farming are processed. Updated Sustainable Farming Terms and Conditions will be effective immediately upon posting the updated version on the Swedbank website. In order to be still considered a Sustainable Farmer by Swedbank, the Farmer must follow the amended Sustainable Farming Terms and Conditions and support it with Sustainable Farmer certification. Swedbank shall notify the Sustainable Farmers of amendments via the Swedbank website or internet bank messages or text messages (SMS) or email.


A significant contribution to Climate change mitigation

The Farmer who applies the following principles on the farm is considered to significantly contribute to Climate change mitigation based on the Taxonomy Technical Report March 2020. 

The essential management practices are described below. All essential practices will need to be deployed, except where particular practices can be demonstrated to be not applicable to that farm holding given the particular biophysical conditions at that farm holding. In these cases, the Farmer is required to get written approval from the certification partner not to apply the specific practice.

If Farmer has not been applying essential management practices yet, then Farmer needs to develop a plan with a certification partner to start applying these practices during the next 2 farming seasons. Certification partner will then monitor the progress against the plan.

1. Farm GHG* assessment

Where energy emissions (including fuel) represent more than 20% of total emissions from non-perennial crop production activity, these emissions should be in a 10% reduction trajectory from a 5-year perspective and a 20% reduction trajectory from a 10-year perspective compared to the 2020 baseline. 

* GHG – Greenhouse gasses (e.g. CO2, N2O, CH4)

2. Crop Rotation and soil coverage

  • At least 5-year crop rotation, including 1 year of legume (pea, bean, etc.). Multi-species cover crop counts as one crop.

  • At least 75% of living plant coverage index. This means that on average, fields should have crops growing at least 9 months of the year. Winter crops and cover crops can be used to achieve this crop coverage.

  • Residue should be left on the field or replaced respectively with manure to avoid nutrient loss.

3. Soil Management

  • Prevent soil compaction by avoiding traffic on wet fields. This means doing field operations on time, before or after excessive humidity periods (standing water on the field).

    • Avoid water-logging and compaction on drained soils

  • Peatlands shall not be cultivated to avoid soil organic carbon loss. Such wetlands should be kept as or turned into grasslands.

    • Avoiding deep ploughing on carbon-rich soils, such as peatland

    • Avoiding row crops and tubers on carbon-rich soils, such as peatland

    • Maintaining a shallower water table on peat and carbon-rich arable land. Meaning that water levels on peatlands and carbon-rich arable land should be maintained.

  • Maintain permanent grassland. A land that has been a grassland for 5 or more sequent years should remain as such.

4. Nutrient management and plant protection

  • Precision fertilization is used for mineral nitrogen application. Taking into account soil analyzes, yield maps, and other field-specific information.

  • Manure is incorporated into the soil via injection (slurry) or within 1h (manure)

    • It is required that a low emission N-application technology is used (e.g. slurry injection, incorporating manure in the soil within 1 hour from spreading), and 

    • Fertilizer spreaders that have a low coefficient of variation (e.g. placing N in the soil via injection)

  • No increases in quantities of Plant Protection Products used (either in total or per crop type per unit area) compared to an annual baseline average determined over a rolling 5-year baseline period

5. Other Sustainable Farmer requirements

  • Minimizing post-harvest loss

  • No burning of arable stubble except where authority has granted an exemption for plant health reasons

  • Conversion of low-productivity land (e.g. along field edges) into woodland to increase carbon sequestration and protect against soil erosion

  • Paddy rice management

    • Shallow flooding

    • Mid-season drying event

    • Off-season straw


Do no significant harm requirements

The Farmer who applies the following principles on the farm is considered to Do No Significant Harm to the other 5 EU Taxonomy Objectives based on Taxonomy Technical Report March 2020 and Technical Working Group Technical Screening Criteria March 2022.

1. Climate Change Adaptation

  • Best practice Crop Rotation and soil coverage principles are followed (check detailed information above)

  • Best soil management principles are followed (check detailed information above)

2.Sustainable use and protection of water and marine resources

  • Where the activity involves water abstraction, a permit for water abstraction, where such is required, has been granted by the relevant authority for the activity. Where the permit specifies conditions to avoid significant impact on water bodies, these are followed.

  • When using an irrigation system: (1) input water source comes from the same river basin; (2) sources such as rainwater harvesting systems and/or reclaim water from an urban or industrial Wastewater Treatment Plant (WWP) that complies with the EU Regulation on minimum requirements for water reuse for agriculture irrigation are prioritized; (3) The input water is metered and registered; (4) The irrigation system is highly efficient at farm level: system efficiency should be at least 60% for furrow irrigation, 75% for sprinkler and 90% for drip irrigation.

  • If the holding is located in a Water Exploitation Index plus (WEI+) river basin area 20% or above (or equivalent), no other water abstraction than water harvesting is considered. Additionally, any rainwater harvesting system must be authorized by the relevant authority, specifying conditions to avoid significant impact on water bodies.”

  • No modification of water bodies, e.g. straightening of rivers, lining ditches, or removal of riparian vegetation, etc. except for no-significant water harvesting systems that have received permits from the relevant authorities

3. Transition to a circular economy

  • Non-natural waste materials generated in the course of growing crops, including used protected cultivation films, unused agrochemicals or fertilizers, packaging, or net wraps are collected by certified waste management operator and recycled or disposed of, if hazardous or otherwise not recyclable

  • Natural (organic) material is not burned without energy recovery nor left to rot (unless to improve soil organic carbon)

4. Pollution prevention and control

  • The holding implements a yearly crop nutrient management and fertilization plan, established with the help of guidelines certified by national or regional bodies or with standards developed by the EU or other official bodies

    • The plan considers field cropping and yield history, crop residue, soil nutrient level, nutrient providing capacity, planned crop yields on expected variety capacity and plant/seed capacity, based on the previous crop rotation cycle or other appropriate time frame for perennial crops but at least for three years

    • Fertilizer applications and nutrient content of the fertilizers (at least nitrogen (N) and phosphorus (P)) are documented in detail

    • The pH-value of the soil is periodically determined as part of soil testing (every 3 to 5 years) and documented. The value must lie in an optimal range (6.5 to 7), or below in the case of paludiculture on wetland

    • The soil is systematically and periodically tested for nutrients (every 3-5 years for nitrogen (N), every 5 years for phosphorus (P)) and for structure and physical properties (all three years). Results are documented. The testing is conducted with a reliable method. A reliable method follows state-of-the-art methodologies and best practices examples: i.e Soil Sampling Protocol from European Soil Data Center (ESDAC)416 (Map of pH in Europe JRC. Soil pH in Europe 2010) or the soil testing methods published by the FAO418 (i.e., humus quality and annual humus balance, calculated as an area-weighted average of all areas) must be determined with a humus inspection every six years. The humus balance must never be negative and must follow a conventional approach such as the AMG model. The farmer can prove that he has either outsourced the inspection to an expert or done it himself in a correct way. 

  • The holding limits the periods when fertilizers (organic and mineral) are applied on land to target application to periods when an actively growing crop requires nitrogen and takes into account the climatic and soil condition. Fertilizer applications are therefore technically optimized and timed to coincide as closely as possible to the period of optimal crop uptake. So, no fertilizer can be applied earlier than 1 month before the start of the growing season. Periods of high rainfall are avoided (unexpected extreme weather events excluded). 

  • Spreading manure and other organic material is not allowed when the soil is flooded, water saturated, frozen on snow covered ground or on steeply sloping ground. For liquid manure the slope limit for spreading is 6%, for all other 12%. 

  • Livestock slurry and digestates must be incorporated into the soil by using application techniques reducing ammonia emissions such as trailing hose or trailing shoe or injection

  • If for the application of manure trailing hose or trailing shoe are used, the slurry is incorporated into the soil as soon as possible and at least within 1 hour

  • Fertilizer application is not allowed in a 10 m vicinity beside surface water bodies (where water bodies are water bodies as defined in the Water Framework Directive). 

  • The amount of livestock manure applied to the holding each year, including by any animals themselves, does not exceed 170 kg N ha-1 per hectare or different amounts in accordance with the conditions set out in Annex II to Council Directive 91/676/EEC.

  • The use of plant protection products (PPP) follows best practices to avoid increases in adverse pressures and avoid substantial harm or continually reduce it to an “acceptable/not harmful” level to environmental and human health:

  • Only plant protection products that are authorized under the EU Pesticides database are used.

  • Full compliance with national-level PPP regulations is observed

  • Farm records are kept on the annual usage quantity of PPPs in total, per category of PPP, per specific product, and per crop type (by land area of).

  • No increases in quantities of PPPs used (either in total or per crop type per unit area) compared to an annual baseline average determined over a rolling 5-year baseline period (unless due to exceptional circumstances of pest outbreak in which case such anomaly years must not be consecutive or occur more than twice in 10 years). If 5 years of data is not available, the baseline average is to be determined using as near to a 5-year average as on-farm data permits.

  • A reputable on-farm pesticide risk assessment tool is used to inform choices of PPPs that help minimize ecological harm.

5.Healthy Ecosystem

  • Activities ensure the protection of soils, particularly over winter, to prevent erosion and run-off into water courses/bodies and to maintain soil organic matter.

  • Activities do not lead to the conversion, fragmentation, or unsustainable intensification of high-nature-value farmland, wetlands, forests, or other areas of high-biodiversity value This includes highly biodiverse grassland spanning more than one hectare that is:

    • Natural, namely grassland that would remain grassland in the absence of human intervention and that maintains the natural species composition and ecological characteristics and processes; or

    • Non-natural, namely grassland that would cease to be grassland in the absence of human intervention and that is species-rich and not degraded and has been identified as being highly biodiverse by the relevant competent authority.

  • Activities should not result in a decrease in the diversity or abundance of species and habitats of conservation importance or concern.

    • contravene existing management plans or conservation objectives.

  • Where activities involve the production of novel non-native or invasive alien species, their cultivation should be subject to an initial risk assessment and ongoing monitoring in order to ensure that sufficient safeguards are in place to prevent escape to the environment. 


Minimum Social Safeguards

A guide to human rights for small and medium-sized businesses gives the following guidance, suggested to be taken as a proxy for Minimum Social Safeguards compliance, which is primarily aimed at small-to-medium sized enterprises (SMEs), however all Farmers must comply herewith:

  • Farmers commit to respecting human rights. Depending on the size of the business, this could be done on its homepage or in its statutes. If there are none, it can be done in other forms, such as self-declaration. For a Farmer it is important that respect for human rights is an attitude reflected in the way it does business.  

  • Farmers identify their risks in their own business, for example discriminating in recruitment processes or risks in their supply chain. This can be done by amending existing processes, for example on health and safety, or by using management system certifications which also consider the supply chain.  

  • Farmers act on human rights risks by designating someone in charge of acting on Human Resources (HR) risks. Risks in the supply chain might be met by considering the leverage the company has on certain suppliers. 

  • In the case of a breach, depending on its severity, there are several options to react, starting with an apology to financial compensation.  

    • Farmers should communicate the steps taken on Human Resources Due Diligence (HRDD).

  • Farmers should consider giving the opportunity to facilitate complaints by employees, clients, or the community by pointing to an anonymous complaint mechanism because this is a tool to understand problems at an early stage.

The Minimum Social Safeguards listed above are applicable considering the size of the business of the Farmer (proportionality criteria).

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