Subsidies keeping wind, solar generation viable
OPINION: I recently wrote an open letter to the Prime Minister because at a recent Federated Farmers meeting, Chris Luxon told me wind and solar generation is not subsidised.
At $320 million, the SL Financing has been tailored to the challenging faced by the red meat industry, and will further enable Silver Fern Farms to grow while delivering on the company’s transformative sustainability agenda.
Silver Fern Farms chief executive Simon Limmer says the red meat company is committed to leading food system-change and supporting a just transition to a low carbon economy.
“Our commitment, and follow-through, on sustainability issues is a key way we’re making sure we do the right thing by our customers who increasingly want their red meat sustainably produced and processed,” he says.
Limmer says sustainability-linked financing of this size marks a significant step for Silver Fern Farms and emphasises it’s commitment to respond to the rise of climate conscious consumers and create new forms of value for farmers.
“The targets associated with the facilities will hold us to account as we accelerate towards a nature positive business model that incentivises low emissions, biodiverse and regenerative farming practice,” he says.
As part of the SL Financing, Silver Fern Farms will receive financial incentives as it delivers pre-agreed and pre-defined sustainability targets including:
- Adoption of the New Zealand Farm Assurance Programme Plus (NZFAP+) by Silver Fern Farms suppliers
- Reduction of processing emissions in line with the Science Based Target initiative (SBTi) target of 42% Scope 1 and Scope 2 Greenhouse Gas emissions reduction by 2030 from 2020 baseline year
- Reduction of total waste to landfill (including organic waste) from processing sites
- Reduction of water used at processing sites
- Enhanced environmental monitoring and reporting.
Silver Fern Farms chief financial officer Vicki McColl says the SL Financing would add another incentive for the company to achieve the targets set out in its newly adopted Sustainability Action Plan.
“The Sustainability Performance Targets (SPTs) set out in the sustainability-linked financing give us real clarity in terms of what we need to be investing in year on year and make plain our responsibilities,” says McColl.
She says a strong performance against the targets will save money, while under performance will cost Silver Fern Farms.
“This means the incentives for operating in a more sustainable way are very tangible in a commercial sense.”
The SL Financing is provided by a syndicate of lenders comprising ANZ, Bank of China, BNZ, Citibank and Rabobank.
ANZ, BNZ and Rabobank, who together acted as Joint Sustainability Coordinators (JSCs) on the transaction, recognised Silver Fern Farms market-leading approach to sustainability.
“With the support of the JSCs, we have achieved a Sustainability-Linked financing facility that is customised for the sustainability challenges, and opportunities, in the red meat industry and one that aligns with international best practice.
“Silver Fern Farms is now extremely well positioned to play a leading role in nature positive food production globally and we thank all those involved in this significant milestone for agribusiness in New Zealand,” says McColl.
The transaction was externally reviewed by EY and aligns with the Sustainability-Linked Loan Principles (2022).
