They (and the Ministry for Primary Industries) make up a leadership group developing the Sustainable Agriculture Finance Initiative (SAFI). SAFI's aim is to develop a definition or taxonomy (classification system) for use by the finance sector in considering agriculture lending and investment.
The aim is to align SAFI with emerging international frameworks, including the EEU Taxonomy and Climate Bonds Standard, as well as existing sustainability standards used by NZ farmers and growers.
The gap between domestic and international standards for sustainable agriculture can then be bridged to better support the flow of sustainable finance to the NZ agriculture sector.
Charteris phrases this more simply. "For me that's really about finding what 'good' looks like from an agricultural financing perspective.
"That can be around developing farm environmental plans — which a lot of our clients are already doing — or creating a (sustainable finance) definition from an industry point of view, which in some cases is aspirational, and in some cases what's already happening now — every farming business is different."
SAFI is separate to the Sustainable Funding Framework recently launched by Rabobank globally.
Building on its Renewable Energy Green Bonds launched in 2016, the framework incorporates instruments such as bonds, loans, derivatives, commercial paper, and certificates of deposit.
In NZ, conversations between Rabobank and its customers about the non-financial aspects of their farm business are moving to a focus on sustainability and what "good" looks like.
Charteris says this focus is not wholly environmental, and can extend to issues like agronomics, health and safety, and compliance with the Emissions Trading Scheme (ETS) — to cite diverse examples.
"For me it's a win-win, because it actually helps our clients adapt to some of those emerging changes and requirements."
Charteris says while the impact of regulatory demands made of the agriculture sector attract a lot of attention and focus, he sees increasing community and consumer expectations of land managers as more important — "they're the ultimate rule-makers".
The miasma of these converging expectations and demands creates a sense of frustration at times among farmers as the result of uncertainty, he says.
"Our bankers' role when they're out there talking to their clients is to try and help them navigate the uncertainty. That starts with a conversation: how do we share the global knowledge that we can bring to discussions around food and agriculture as a global bank, what does good look like — and maybe it's describing best practice so that everyone's going to be there on Day One on this journey that we're on.
"Many farmers are doing amazing stuff, not just because of regulatory requirements, but because it's the right thing to do — it's classic change management — you've got the early adopters, the fast followers, and you've got some laggards — you always do.
"How do you help all of them through that uncertainty and try to identify the opportunities within it?"
Charteris says the business growth opportunities are definitely there for NZ as a sustainably-focused trading nation.
The spectre of the recently-released Climate Change Commission report and how governments will respond to it legislatively looms large over the sector.
"While some farmers can handle these things better than others, it still creates some tension."
Charteris says in response to strong agricultural commodity prices of the past few years, farmers have been doing the responsible thing while their cashflow has been strong, to retire debt and strengthen their balance sheets, or to reinvest profits on-farm.
"That's because they are anticipating having to invest in changing their farm practices, even though they are not sure what the magnitude of that will be — they're getting match fit for when that comes."
• Published in the Herald's 2021 Sustainable Business report
