Federated Farmers dairy section chair, Richard McIntyre, has raised concerns over the Net Zero Banking Alliance, a coalition of international banks committed to financing climate action to achieve net-zero greenhouse gas emissions by 2050.
McIntyre questions whether the alliance compromises the competitive nature of banking in New Zealand, particularly in the agricultural sector.
The Bank of New Zealand (BNZ) is the first to announce a specific target, aiming to reduce greenhouse gas emissions from dairy farming by 11% within the next six years. Meanwhile, ANZ and Westpac, two other major banks, are still contemplating their targets but are also members of the New Zealand Banking Association (NZBA).
Members of the NZBA are required to declare their first set of intermediate decarbonisation targets within 18 months of joining the alliance.
McIntyre expressed his apprehensions about the collective approach of these banks. “This banking alliance raises some very serious questions about whether our banks are acting in a truly competitive manner, or if the joint commitment is effectively banks collaborating on a joint lending strategy,” he told Rural News.
He believes that the Commerce Commission should examine what pre-competitive commitments banks can make before consumers’ rights to a competitive marketplace are compromised.
BNZ general manager of agribusiness, Dave Handley, stated that the bank has already started setting and disclosing decarbonisation targets, covering a range of industries including dairy. Handley clarified that BNZ’s dairy target focuses on emissions intensity associated with each kilo of milk solids produced, rather than absolute reductions.
“Our aim is to encourage growth in the sector by aiding it to become more efficient and sustainable, producing more with fewer emissions,” Handley said.
Westpac’s head of agribusiness, Tim Henshaw, mentioned that the bank is proud to be part of the NZBA and is working closely with agricultural customers to manage climate-related risks. Although Westpac has not announced any specific targets yet, Henshaw expects to set future targets in line with NZBA commitments.
An ANZ spokesperson noted that as the country’s main bank for over 34% of farmers, they are keenly aware of the challenges faced by the agricultural sector.
While ANZ has not set any financed emissions targets in New Zealand for agriculture, the bank is examining the feasibility of setting a sectoral pathway for food, beverages, and agribusiness.
McIntyre concluded by saying that banks should collaborate with farmers rather than imposing targets, describing it as “a good practical way forward.”
