Opportunities for NZ agriculture in 'sustainable finance' - Rabobank

Rabobank sustainability analyst Blake Holgate. Photo / Supplied

Content brought to you by Rabobank.

New Zealand's agricultural sector is well placed to capitalise on a growing trend in "sustainable finance" over the coming decade, according a new Rabobank report.

Sustainable finance is finance specifically used for activities which produce a verifiable positive impact on the environment or society.

The report, Cashing in on Sustainable Agriculture – How New Zealand can Capitalise on the Emerging Sustainable Finance Trend, said sustainable finance had the potential to be a "key enabler" in helping New Zealand's agricultural sector achieve its long-term sustainability aspirations.

The market for sustainable finance continued to grow in scope and scale as financial institutions and businesses increasingly directed capital into investments that improved their sustainability performance, the report said.

This trend was set to increase considerably over the next decade, report author and Rabobank sustainability analyst Blake Holgate said.

"New Zealand's robust climate change and environmental policies, strong environmental credentials and the environmental progress already made by primary producers, mean the sector has a strong platform upon which to attract sustainability-linked investment vehicles," Holgate said.

The report said significant changes would be required of New Zealand agriculture over the
coming years in order to achieve both government-set environmental targets, and the
sector's own sustainability aspirations.

Listen to Jamie Mackay interview Blake Holgate on The Country below:

The transition would require substantial investment of capital into New Zealand farming to reduce environmental and climate impacts, Holgate said.

"At the same time, we're seeing global financial markets increasingly looking to redirect
capital into projects and businesses that deliver positive social and environmental
outcomes, and away from investments considered unsustainable."

While sustainable agricultural finance was in its infancy - and its scope and
scale was likely to remain limited in the immediate future - in the longer term it had the potential to help New Zealand agriculture access the capital required to meet sustainability goals, Holgate said.

"But for this to happen, sustainable agricultural finance needs to be factored into the longer term strategic decisions of the New Zealand's agricultural sector and individual primary producers."