Federated Farmers takes Net Zero Banking Alliance complaint to Commerce Commission

Federated Farmers says many farmer clients may not be able to meet the "aspirational" emissions reduction targets set by their banks.

By RNZ

Federated Farmers is calling on the Commerce Commission to investigate the global Net Zero Banking Alliance which it says is operating like a cartel.

BNZ, ANZ, Westpac, Rabobank and ASB’s parent company have all joined the Net Zero Banking Alliance, which required its clients to meet greenhouse gas emissions reduction targets in order to get lower interest rates.

The United Nations-convened Net Zero Banking Alliance had more than 140 banking members globally, representing around 40% of global banking assets.

However just this week, US banking giant Goldman Sachs exited the alliance, the first major bank to leave since the alliance was founded in 2021.

New Zealand banks referenced their Net Zero Banking Alliance obligations in various sustainability reports and internal banking policies for who they will or won’t provide lending to – as well as specific targets for carbon-intensive sectors like dairy farming.

Federated Farmers banking spokesman Richard McIntyre said because all of the banks’ set emissions reduction targets, it will reduce competition for banking, prompting its complaint to the Commerce Commission

“In New Zealand, five major banks dominate 97.3% of the agricultural lending market,” McIntyre said.

“It’s just woke virtue signalling, but now that we’re in a position where they’re all doing it, you’ve really got a question whether or not it is cartel work behaviour and that’s why we’ve put this complaint into the Commerce Commission because we think it’s really worth investigating for the good of New Zealand’s farmers but also for the good of the New Zealand economy.”

McIntrye said many farmer clients may not be able to meet the “aspirational” emissions reduction targets set by their banks, but they would have no other option but to borrow from one of the big five banks.

He said there were plenty of farmers who would not meet the targets, and it wasn’t yet clear what the consequences would be.

“Is this really the bank’s place to be setting emissions reduction targets for various industries or farmers in general?

“What actually gives them the right or need to do that?

“I would argue that there’s a question of sovereignty here when we’ve got this effective group of banks that have signed an agreement overseas and are inflicting upon New Zealand’s most productive sectors.”

A Commerce Commission spokesperson said it was aware of the complaint, but it would be premature to comment on whether any laws were being breached by using the business practices.

“In considering whether to investigate issues that come to our attention, we consider the available information for its relevance to our responsibilities and current work programme, and our enforcement priorities which set out the focus areas for our compliance and enforcement activities,” it said.

Meanwhile, BNZ presented at the select committee hearings into the inquiry into banking competition yesterday morning.

- RNZ