There has been a shift in how Bank of Ireland will view young farmers when making lending decisions, with environmental credentials now a must-have for those looking for credit.

This move comes as the bank bids to “future-proof” its loan book, following increased pressure on environmental issues from both authorities and investors, head of agriculture at Bank of Ireland Eoin Lowry told the Irish Farmers Journal.

The bank is now taking what Lowry calls a “three bucket” approach to lending.

“In the past, we would have just looked at a financial bucket – how the farm is performing – and we would lend on that basis.

We’re backing into the science of the Teagasc MACC and that identifies what actions farmers need to take to improve their environmental footprint

“We now look at two other buckets, one being the person and their understanding of the farm business and the other being an environmental bucket,” he said.

The bank is now looking at what actions farmers are taking on-farm that will reduce their environmental footprint while increasing space for nature and biodiversity.

“We’re backing into the science of the Teagasc MACC and that identifies what actions farmers need to take to improve their environmental footprint.

“Effectively, what we are now doing is considering how green or environmentally friendly a farm is,” Lowry said.

For larger loans, such as land purchase or farm development, he said the bank is looking at the organic nitrogen on the farm, the stocking rate, the slurry storage capacity and the sustainability report from Bord Bia.

“We are building that into our lending process and our risk process,” he said.

The changes come as data released this week by the European Central Bank shows banks across the eurozone are rapidly tightening lending conditions.