Doubling down on its commitment, the state-owned enterprise has now signed a second sustainability-linked loan, this time with ANZ. The new loan is aligned with existing targets and reinforces the need to drive forward parts of its sustainability work programme. This includes the verification and achievement of a 1.5 degree aligned science-based emissions reduction target, Toitū carbon reduce farm certification, On-Farm Sustainability Performance Programmes, and well-being support for farm managers and staff.
“These goals are ambitious and in alignment with what our main customers, as well as shareholders, are asking of us. They reinforce the need for our sustainability work programme. Although meeting them will be a stretch, they all shift the dial closer to achieving our ambition of reducing our impact and improving our environmental performance in areas such as freshwater and biodiversity. We hope our learnings will also serve to help the wider sector,” said Annabel Davies, Chief Sustainability and Risk Officer for Pāmu.
Achieving the sustainability targets will result in a pricing discount from ANZ but on the flip side, there will be higher interest costs if the company fails to reach them.
This is unlikely to be the last sustainability-linked loan for Pāmu as the finance and lending market is changing in response to market and consumer pressures. There is an increase in agricultural lending using ambitious sustainability-linked targets.
“ANZ applauds the commitment by Pāmu to sustainability, expressed through this milestone transaction. Agriculture remains a critical sector for our economy and Pāmu has demonstrated clear leadership in embedding sustainability within their business. ANZ is delighted to have supported Pāmu and this transaction,” said Kate Gunthorp, a director in the sustainable finance team at ANZ.
“ANZ is committed to sustainability, and our success in supporting and accelerating a net zero transition by 2050 will be driven by our ability to help our customers reduce their emissions,” said Dean Spicer, Head of Sustainable Finance at ANZ.
Pāmu Chief Financial Officer Steve McJorrow said: "It is increasingly apparent that those borrowers who cannot demonstrate improvements in sustainability metrics will incur a cost of capital making them uncompetitive or become unable to source capital at all. Sustainability-Linked Loans demonstrate our sense of responsibility to the industry and create spill-over benefits. It helps ensure we continue to direct our efforts towards a sustainable farming industry in New Zealand.”