A divide is emerging within New Zealand’s largest agri-lenders as some banks move ahead with emissions-intensity targets while others hold back, citing uncertainty over data, technology, and the pressures facing farmers.
The recent climate reports and profit announcements show the sector navigating expectations from Australia’s 2050 net-zero legislation while weighing the realities of New Zealand’s farm-driven economy.
ANZ continues to stand apart by declining to set agricultural emissions-reduction targets, despite criticism from Federated Farmers over its links to the former Net-Zero Banking Alliance.
“We have products to help customers reduce their emissions.” Chief executive Antonia Watson said. She argued there is not yet enough certainty to set targets: “Our international markets are making demands of our farmers, but at this stage for us to do anything, we would need a lot more data.”
Watson added the issue is larger than measurement tools alone: “It’s not just the data. It’s the path.” Many proposed methane-reduction technologies were still unavailable, noting “None of them are live, or in the market yet.”
Australian parent banks face expectations to support their country’s net-zero legislation. Commonwealth Bank chief executive Matt Comyn wrote: “The Australian Government is continuing to develop a national Net Zero Plan…” and “We remain committed to helping our customers and supporting Australia’s transition to net zero by 2050.”
BNZ aims for an 11% reduction in dairy emissions intensity from a 2022 baseline, while Rabobank seeks a 12% cut by 2030 from 2020 levels. Westpac expects its beef and dairy portfolio to be 10% below 2021 intensity levels.
It reports dairy emissions down 6% since 2021 and beef down 4%. Nearly half of its agri lending now sits on Sustainable Farm Loans with lower rates tied to environmental performance, and Catherine McGrath said every farm had met its target.
The Climate Council argues intensity-based goals can mask increases in total emissions, saying, “A more concrete measure of emission reduction is an absolute reduction…” and “To tackle climate change total emissions must go down so an absolute reduction is the most relevant measure.”