Connecting supply chains and finance: How RBI and Klim are rethinking KPI linked loans

Volatile supply chains, rising costs and increasing regulatory requirements are creating growing structural challenges for large food companies. Climate change, in particular, acts as a risk driver across the entire value chain – from agricultural production to financing. A significant share of these risks and emissions arises in Scope 3, meaning indirect emissions along the value chain, for example in the agricultural production of raw materials. This area is especially relevant for companies – and at the same time has so far been difficult to measure and manage.

With the KPI linked loan solution jointly developed by RBI and Klim, Scope 3 is placed at the centre of corporate financing for the first time in a systematic way. Clearly defined, measurable and verifiable indicators make it possible to link investments in more resilient and sustainable supply chains directly to financing conditions. In the interview, Markus Ecker, Head of Sustainability Finance at RBI, and Robert Gerlach, Managing Director of Klim, explain why Scope 3 is becoming a key lever for risk management, competitiveness and transformation in the food sector – and what role data driven cooperation between banks and technology partners plays in this context.

Mr Ecker, large food companies are currently under significant pressure from volatile supply chains, rising costs and regulatory requirements. Where do you see the most material sustainability risks today – and how does the KPI linked loan solution developed by RBI address these challenges?

Markus Ecker: Climate change has very tangible effects on food producers that depend on stable production volumes. Droughts and flooding, which can clearly be attributed to climate change, are already causing instability in agricultural yields. From a banking perspective, we therefore see three central risk dimensions: first, supply chain risks that are increasing due to climate change and geopolitical factors; second, cost risks resulting from volatile agricultural commodities; and third, regulatory risks related to rising requirements for transparency and emissions reduction.

Our KPI linked loan solution addresses these challenges by linking financing with the stabilisation of agricultural production. We enable our clients to invest specifically in the resilience and sustainability of their supply chains, while at the same time integrating clear, measurable sustainability targets into the financing structure. Klim contributes its technical expertise to help achieve these targets and reduce emissions.

The new financing solution deliberately focuses on Scope 3 greenhouse gas emissions. Could you briefly explain what Scope 3 means – and why this area plays a central role in structuring KPI linked loans for large food companies?

Ecker: Scope 3 emissions include all indirect emissions along the value chain, for example from agricultural production. In the food sector, they account for the majority of total emissions. The transition from conventional to regenerative agriculture within the supply chain not only stabilises yields, but also reduces emissions, as more carbon is sequestered in the soil. KPI linked loans allow companies to be rewarded for these emission reductions.

Why is it no longer sufficient, from a banking perspective, to base sustainability linked financing exclusively on Scope 1 and Scope 2?

Ecker: Scope 1 and Scope 2 cover only a company’s direct emissions and energy consumption. In the food sector, however, their share is comparatively small. A sole focus on these scopes would therefore exclude material sources of emissions.

In the transactions we structure, we therefore ensure that the supply chain is also taken into account, as this is where the greatest sustainability impact lies – not only in terms of emissions. This approach is also reflected in our clients’ sustainability strategies.

Mr Gerlach, Scope 3 emissions in food production occur along the supply chain. Why do you see the greatest potential for measurable improvements here – particularly for large, internationally active companies?

Robert Gerlach: For food companies, the majority of emissions do not arise from their own operations, but along the supply chain – particularly at the agricultural level. This is because key emission drivers such as fertilizer use, soil management, or livestock farming occur directly at farm level and accumulate across large areas and many individual farms. At the same time, this part of the value chain has so far been the least managed, due to a lack of data and the difficulty of scaling measures.

The main lever therefore lies in Scope 3. Companies that address this area can not only reduce emissions but also improve the stability and profitability of their own supply chains. Measures to reduce Scope 3 emissions – such as the introduction of regenerative practices – lead to healthier soils, lower dependence on volatile inputs like fertilizers or crop protection products, and more stable yields. This reduces cost risks, increases predictability, and has a direct positive impact on the risk and cost structure.

Regenerative practices result in healthier soils, reduced reliance on inputs, and more stable yields, which directly affects risk and cost structures. For large, internationally active companies, Scope 3 is therefore not merely a sustainability issue, but a key factor for resilience, long-term competitiveness, and increasing overall company valuation.

For large companies – and for their banks – data reliability is critical. How does Klim ensure that Scope 3 KPIs are collected and assessed in a way that is traceable, consistent and bank ready?

Gerlach: The key is not only to collect data, but to standardise, translate and verify it. At Klim, we work with a digital Monitoring, Reporting and Verification (MRV) platform that captures agricultural practices at farm level, assesses them agronomically and translates them into measurable performance indicators – for example with regard to soil health, emissions, biodiversity, economic performance and resilience. Together with RBI, we have developed twelve KPIs on this basis that make these factors quantifiable and usable for financing decisions. The data is aggregated along the supply chain and assessed using clearly defined methodologies, making it equally usable for companies and banks. For financing models, it is essential that KPIs are consistent, traceable and auditable. Only then can they be integrated into loan structures. This is exactly the bridge we build: from operational implementation in the field to evidence based metrics.

Mr Ecker, what concrete benefits do large food companies gain by integrating Scope 3 KPIs into their financing structures through KPI linked loans – for example in terms of loan conditions, risk management and regulatory requirements?

Ecker: Investments in production stability are unavoidable for these industries given the effects of climate change. When these investments lead to verifiable and measurable environmental impacts, additional tangible benefits arise for our clients. On the one hand, financing conditions can be linked to measurable progress, creating a direct financial incentive.

On the other hand, integrating Scope 3 KPIs strengthens risk management, as companies gain a better understanding of and control over their supply chains. At the same time, they are better prepared to meet regulatory requirements that will continue to apply to large companies even after the Omnibus adjustments.

Why did RBI decide to cooperate with Klim in developing this KPI linked loan solution?

Ecker: For us as a bank, it is not only important that emissions are reduced, but also that the targets set are material, measurable and verifiable. This is where Klim adds value.

In addition to technical advisory expertise, Klim enables the collection and structured processing of data directly at farm level. This allows us to ensure that the KPIs are not only conceptually sound, but also externally verifiable – a key prerequisite for any sustainability linked financing.

What role can KPI linked loans play in the transformation of large food companies going forward?

Gerlach: KPI linked loans have the potential to shift sustainability from a reporting exercise to a core element of companies’ financial steering. Many sustainability targets are defined today but often have little direct impact on investment decisions. Linking them to financing conditions creates a clear economic incentive.

This is particularly relevant for Scope 3, where investments along the supply chain are required, for example in transitioning farms to regenerative agriculture. When these investments are linked to improved financing conditions, sustainability becomes part of capital allocation rather than communication alone. Over the long term, such instruments can help ensure that regenerative practices prevail not only for ecological reasons, but also from a business perspective.

How will the relevance of Scope 3 KPIs in corporate financing develop further?

Ecker: The importance of Scope 3 KPIs will continue to increase, as they cover the majority of emissions in many sectors.

For banks, this means that we will increasingly align our financing instruments accordingly. We aim to support transformation along the entire value chain. Companies that establish robust Scope 3 structures at an early stage will, over time, benefit from improved access to capital and more favourable perception by investors.