ANZ, ASB, BNZ, Westpac, and Rabobank are all signatories to the Net-Zero Banking Alliance. Photo: RNZ
- Commerce Commission dismisses Federated Farmers complaint on net-zero banking
- Finds no evidence of cartel-like behaviour
- Net- Zero Banking Alliance aligns lending to emission reduction targets
- Five banks account for 97 percent of agricultural lending
The Commerce Commission has dismissed a Federated Farmers complaint that five major local banks acted like a cartel, tying lending to climate targets.
ANZ, ASB, BNZ, Westpac, and Rabobank are all signatories to the Net-Zero Banking Alliance, which aligns lending policies to climate change goals. Together, the five banks account for 97 percent of agricultural lending in New Zealand.
The Commission's general manager competition Vanessa Horne said no evidence of anti-competitive or cartel-like behaviour had been found.
"We thoroughly investigated the complaint and concluded that the banks had made their own, independent decisions.
"We found no evidence of unlawful co-ordination between the banks or with the Net-Zero Banking Alliance, either relating to the banks joining or in meeting their obligations under this alliance."
Linking climate and lending
Federated Farmers alleged the five banks were co-ordinating their agricultural lending with Net-Zero Banking Alliance strategies which could violate the Commerce Act.
It also alleged that this could make it harder for farmers to get loans and increase borrowing costs.
Its banking spokesperson Mark Hooper called the Commission's decision disappointing but accepted it.
"The reason we made the submission in the first place was that we felt there had been some collusion and there was a sort of collective agreement that would have limited farmers' choice. So in that sense we're disappointed, but we still think it was the right course of action to go down."
Hooper said they remained concerned that banks were straying from their "core role of lending money based on real risk considerations and not indulging in the climate change space".
The Net-Zero Banking Alliance is a United Nations (UN) initiative that guides banks to lead on climate mitigation in line with the goals of the Paris Agreement.
Its website claims 127 banks worldwide have signed up, overseeing $74 trillion in total assets.
In background information the Commission said the Alliance did not prescribe targets for signatories, gave a framework for target setting, and tools to assess the emissions within their portfolios and how to speed up lending towards low-carbon activity.
Rural concerns about the reduction of lending to rural based petrol stations, prompted New Zealand First MP Andy Foster to pursue a private members' bill to prevent banks from refusing to lend for so-called "woke ideology" reasons.
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