Farmers want probe into banks' emissions targets
Farmers want the Commerce Commission to investigate whether pursuit of net-zero strategies and targets by New Zealand banks breaches competition rules.
Federated Farmers claim the five major banks - ANZ, Westpac, BNZ, Rabobank and ASB - have aligned their lending policies and are engaged in "cartel-like behaviour" in terms of their net zero emissions targets. The farmer lobby also claims that the five banks' policies are linked to their affiliation with the Net-Zero Banking Alliance. It has written to the Commerce Commission calling for an investigation.
However, the banks have hit back, saying they haven't collaborated on a strategy together to join the Alliance and are not operating as a cartel.
Westpac head of agribusiness Tim Henshaw says they reject any allegations that Westpac engages in "cartel-like behaviour".
"Our targets are set independently and broadly align with New Zealand's legislated 2050 net zero goals, which have been supported by successive governments," he told Rural News.
"We welcome the complaint to the Commerce Commission as an opportunity to set straight some of the misconceptions that have been raised."
Henshaw says farmers are embracing the change to ensure New Zealand's exports remain market access and meet customer expectations across the globe, noting this is reflected in the fact that over 43% of their agri term lending is now through the Sustainable Farm Loan.
ANZ managing director for business and agri Lorraine Mapu told Rural News that the ANZ Group made a unilateral and independent decision to join the Alliance in 2021.
"ANZ NZ determines its own strategy, risk settings and approach to customer engagement on climate issues.
"We have not set an emissions reduction pathway and target for the agri sector at this stage. We're committed to working alongside our farmers and farming businesses as on-farm practices and technology evolves."
A Rabobank spokesman described Feds' suggestion of collusion around membership of the Net-Zero Banking Alliance as baseless.
"Rabobank New Zealand itself is not a signatory to the Alliance but has made commitments towards the group's overall emissions reduction targets as part of the Alliance.
"Rabobank is using the Science Based Target Initiative (SBTI) as the overall emissions reduction targets as part of the Alliance.
"Rabobank has adopted 'emissions intensity' rather than 'absolute emissions' reduction targets for its global portfolio. We recognise that the world needs to produce more food to feed a growing population, so focusing on emissions intensity allows food producers to do that."
Feds banking spokesman Richard McIntyre points out that the five major banks in New Zealand dominate 97% of the agricultural lending market, and all five of those banks are affiliated with the Net-Zero Banking Alliance.
"This raised some serious questions about the potential alignment of lending policies and anti-competitive cartel-like behaviour that we think deserve further scrutiny.
"Almost all of these banks are setting 2030 emission reduction targets for farmers that look remarkably similar, driven by their involvement in the Net-Zero Banking Alliance.
"The old saying goes that if it looks like a duck, walks like a duck, and quacks like a duck - then it's probably a duck. I think the same thing could be said about cartel-like behaviour."
