Farmers have voiced concerns regarding certain banks introducing emission reduction targets, especially during increasing financial challenges in the agricultural sector. Federated Farmers, a representative body, cautions that farmers might consider switching banks if these institutions impose such targets.
Financial institutions face heightened scrutiny to quantify and disclose financed emissions, which are greenhouse gas emissions associated with their investment and lending activities.
BNZ, one of the banks in question, has set a goal to decrease its financed biological emissions intensity by 11% by 2030, using 2022 as the reference year. The bank believes that a climate-resilient and efficient dairy industry is pivotal for New Zealand’s continued prosperity and plans to release a comprehensive transition strategy for the sector by April of the upcoming year.
While Federated Farmers acknowledges the importance of addressing climate change, the timing of BNZ’s announcement could be better.
Richard McIntyre, the chair of the dairy section of Federated Farmers, remarked that the bank’s decision seems disconnected from the current challenges faced by dairy farmers. He emphasised that farmers strive to maintain their businesses during tough times and expected banks to offer support rather than introduce additional complexities.
McIntyre also raised questions about banks’ need to set climate targets, given that the government already has established emission goals. He expressed concerns about potential “greenwashing” if banks set targets without taking active measures to achieve them.
BNZ’s general agribusiness manager, Dave Handley, emphasised the importance of a collective effort to address emissions. He stated that BNZ is aligning its strategies with the government’s ambition of achieving net-zero carbon emissions by 2050.
Handley clarified that BNZ’s dairy sector target is based on emissions intensity per unit of milk solids produced rather than absolute emission reductions.
Notably, not all banks in New Zealand have established targets for the agricultural sector. ANZ, for instance, has yet to set any financed emission targets for agriculture in New Zealand.
BNZ’s commitment to emission reduction is linked to its membership in the Net Zero Banking Alliance (NZBA), which it joined in October 2021. The NZBA, an initiative led by the industry and convened by the United Nations, comprises banks aiming to align their portfolios with the goal of net-zero emissions by 2050.
