Options for the reduction of dairy emissions and establishing a reliable means of assessing their effectiveness are major considerations for New Zealand's primary sector. Photo / Mark Mitchell
Options for the reduction of dairy emissions and establishing a reliable means of assessing their effectiveness are major considerations for New Zealand's primary sector. Photo / Mark Mitchell
Opinion by Simon Wilson
Simon Wilson is an award-winning senior writer covering politics, the climate crisis, transport, housing, urban design and social issues. He joined the Herald in 2018.
Climate Change Minister Simon Watts wants to use “sustainable finance taxonomy” to help lending agencies identify greenwashing.
Farm lobby groups Groundswell and Federated Farmers are opposed to the plan.
Act and NZ First want to stop “woke banks” from using this kind of criteria to influence their lending.
Farm lobby groups Groundswell and Federated Farmers are both up in arms about a plan to classify environmental impacts in the agriculture and forestry sectors. In effect, to blow the whistle on greenwashing.
It’s called “sustainable finance taxonomy”, which makes it sound like Important Bankers’ Business, butthe potential impact is far more exciting than that.
Not if you’re Groundswell, though. Its environmental spokesman, Jamie McFadden, calls it “the scariest thing I have seen yet”.
Some people found this month’s ravaging floods in Nelson and Tasman quite scary, but never mind. Plans to identify who’s helping to cause floods like that and who’s helping to prevent them are apparently much worse. Talk about scaremongering.
What does the taxonomy plan really mean? AgriZeroNZ has one answer. This joint venture between the Government, agribusinesses and banks has just announced a $6.3 million investment in BiomEdit.
BiomEdit is an Indiana-based company that makes probiotic feed additives designed to boost productivity and reduce methane emissions from dairy cows. This is AgriZeroNZ’s third such investment.
Chief executive Wayne McNee says, “We’re investing in local and global companies to give us the best chance of providing New Zealand farmers with access to a range of affordable, effective mitigation solutions to choose from.”
The taxonomy plan will allow this kind of financing to be accurately and independently assessed and labelled. Why would anyone call that “the scariest thing”?
Groundswell has come a long way in a short time. In 2020 this group of Southland farmers started to build a nationwide network with tractor convoy protests, sporting slogans like “No tax on food production” and “Don’t bite the hand that feeds you”.
Part of a Groundswell protest at Parliament. Photo / Mark Mitchell
Back then, Groundswell was relatively fringe. Since then, it has channelled climate denialism and anti-government campaigns into high-powered lobbying.
I know, they will say they’re not denialists. But in my view they consistently do their best to block climate action in the rural sector. They want us out of the Paris Accord and they argue methane has been unfairly targeted. They quack like a duck. To me, they’re having the same impact as climate denialists.
And their lobbying is effective. In my opinion, Groundswell has bent the Feds increasingly to their views and they have influential supporters in all three parties of Government.
Back to sustainable finance taxonomy, which has been proposed by Climate Change Minister Simon Watts. As press gallery journalist Richard Harman has reported, his plan aligns with similar moves in Australia and the European Union.
Climate Change Minister Simon Watts. Photo/ RNZ /
The Centre for Sustainable Finance calls it “a standardised framework for classifying economic activities according to their environmental performance”. The centre is a co-ordinating group that includes all the major banks and several of the big law and accountancy firms.
When Watts floated the idea last September, he said, “The strategy will provide the necessary clarity for financing and investments, helping New Zealand align with global sustainability trends. This alignment will not only attract investment but also increase jobs and drive economic growth locally.”
If you think that sounds like a framework to allow banks to assess the climate impacts of lending proposals, you’d be right.
Groundswell and the Feds are opposed and, in parallel, Act and NZ First both have private member’s bills intended to make it illegal for financial institutions to consider “ideology” or “reputational risk” in their lending decisions. “Woke banks!” complains NZ First.
NZ First leader Winston Peters visiting the Covid-related protest at Parliament in 2022.
Photo / Mark Mitchell
This is absurd. Banks aren’t driven by green ideology: they know that lending to ventures that could be undermined by climate change is bad business. They also know the world is full of greenwashing.
The law firm Russell McVeagh says taxonomy “could reduce both the risk of organisations describing financial products in a way that is accused of being misleading (greenwashing) and the risk of organisations staying silent on sustainability-related matters to avoid being accused of making misleading statements (greenhushing)”.
Is that BiomEdit work credible? Sustainable finance taxonomy, done well, will tell us the answer. If it’s yes, it can be promoted; if it’s no, funding agencies can move on.
Standing in the way of this is, to me, the same as denialism.
It’s also hypocritical, when it’s done by political groups who claim to believe in the value of the market. Sustainable Finance Taxonomy empowers the market to make economically informed decisions.
Russell McVeagh says it “could allow the development of new financial products, such as KiwiSaver products that align ... with taxonomy criteria”.
What a good thing that would be.
Where does National stand on all this? Does Watts represent the party position or are the politics more subtle than that?
National’s climate response is very oddly mixed.
To take just one example: oil and gas exploration is supposed to be restarting but the legislation to allow this is a long time coming. There’s more rhetoric than reason in this policy, because it’s well known that new exploration will not solve the twin energy crises of customer pricing and precarious supply. This is because prospecting outcomes are uncertain and the timelines are far too long.
Meanwhile, Watts has put incentives in place to expand urban residential and rural solar power, but there’s very little action to back them up.
One way to read this is to assume Watts has been designated to build National’s appeal to the climate-conscious middle ground of the electorate. But the party is terrified of losing provincial and rural votes to Act and NZ First, so Watts gets to say more than he gets to do.
And while the oil and gas policy won’t change anything we need changing, it does reward some very well-oiled lobbying from the fossil-fuel sector. Also, it allows Shane Jones to keep up the inflammatory posturing.
Resources Minister Shane Jones during his appearance at the Economic Development Select Committee hearing this year. Photo / Mark Mitchell
Which, in turn, provides cover for Government inaction on what’s really needed: meaningful, customer-focused, climate-conscious reform of the energy sector.
Where does this leave sustainable finance taxonomy? Will the Government support this initiative to reduce emissions and build climate resilience? Or will it cave in to Groundswell-inspired climate denialism and attack the ideologically-rotten greenies running the banks?
It’s a common view that the coalition Government has brought a new maturity to MMP, because the major party has worked out how to let the minor parties strut their own stuff, even when it’s outrageous, while it gets on with its own programme.
But real MMP maturity would involve more than this. If National supports Watts’ plan for sorting the real climate action from the fake, and its partners are away chasing their denialist base, it should call on Opposition support.
Call out that “scariest thing yet” nonsense: that’s how to stop the tail wagging the dog. And getting a mid-ground consensus to do the right thing is also very likely the way to build more trust and respect for politicians.
Simon Wilson is an award-winning senior writer covering politics, the climate crisis, transport, housing, urban design and social issues, with a focus on Auckland. He joined the Herald in 2018.
