Source: Federated Farmers
Kiwi banks and their overseas parent companies need to follow the lead of America’s six biggest banks and urgently withdraw from the Net Zero Banking Alliance, Federated Farmers say.
Since the start of December, heavyweights JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs have all exited the UN-backed banking alliance.
“These big US banks have seen that their involvement in the Net Zero Banking Alliance is about to come under huge scrutiny,” says Federated Farmers banking spokesperson Richard McIntyre.
“They’re leaving in droves because of lawsuits for anti-competitive behaviour within the banking sector and growing political pressure.
“Federated Farmers are now calling on our banks to do the same. They need to do the right thing and withdraw from the Net Zero Banking Alliance – and fast.”
In December, Federated Farmers lodged a formal complaint to the Commerce Commission, requesting an urgent investigation into the lending practices of New Zealand banks.
The complaint relates to potentially anti-competitive, coordinated, cartel-like behaviour from the banks, driven by their involvement in the international Net Zero Banking Alliance.
The Net Zero Banking Alliance is an international group committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050.
McIntyre says with five major banks dominating 97.3% of the agricultural lending market in New Zealand, Kiwi farmers should be asking serious questions of their bank managers.
“All five of those banks are either directly members of the Net Zero Banking Alliance or are indirectly affiliated through their parent companies: BNZ, ANZ, ASB, Westpac, and Rabobank.
“Federated Farmers have some very serious concerns about the potential alignment of lending policies and anti-competitive cartel-like behaviour to the detriment of farmers.
“We think this issue deserves some real scrutiny from the Commerce Commission, but also from the banking inquiry currently before Parliament.
“Most of the banking chairs and chief executives have already appeared before the Select Committee, but I think they should be hauled back in to answer some more questions.”
BNZ is a direct member of the Net Zero Banking Alliance, having joined in 2021. Westpac, ANZ, ASB, and Rabobank are all affiliated with the alliance through their offshore parent companies.
The banks reference their Net Zero Banking Alliance obligations in their various sustainability reports and internal banking policies for who they will, or won’t, provide lending to.
Several of the banks have already started putting in place targets for various sectors, including reductions in financed agricultural emissions by 2030.
“Most of these banks are starting to set emissions reduction targets for farmers that look remarkably similar, and that’s a major red flag for us,” McIntyre says.
“That’s why we’re starting to raise serious questions about potential anti-competitive behaviour and collusion that removes choices for farmers.
“There is also a sovereignty issue here where we effectively have a group of foreign-owned banks coordinating and acting as pseudo-regulators for the New Zealand economy.
“These banks are collectively setting emissions reduction targets for farmers that go much further than the targets set by our democratically elected Government.”
McIntyre says he’s also increasingly concerned about what will happen to farmers if they’re not able to meet banks’ emission reduction targets by 2030.
“Will we effectively be de-banked and unable to access the capital we need to run our businesses, like we’re starting to see happen with petrol stations?
“Given the significance of farming and agricultural exports to the economy, this should be something that concerns all New Zealanders.”