The Commerce Commission has cleared five major New Zealand banks of allegations that they colluded like a cartel by linking their lending practices to climate targets. Federated Farmers had lodged a complaint, suggesting that ANZ, ASB, BNZ, Westpac, and Rabobank, all signatories to the Net-Zero Banking Alliance, were engaging in anti-competitive behavior.
The Net-Zero Banking Alliance,a United Nations initiative,encourages banks to align their lending with climate change mitigation goals,such as those outlined in the Paris Agreement. These five banks collectively account for a significant 97% of agricultural lending in New Zealand.
However, the Commerce Commission’s investigation found no evidence of unlawful coordination between the banks or with the Alliance itself. Vanessa Horne,the Commission’s general manager of competition,stated that the banks had made autonomous decisions and that there was no indication of cartel-like behavior.
Federated Farmers expressed disappointment with the ruling but accepted it. Their banking spokesperson, Mark hooper, explained that the complaint stemmed from a concern that the banks’ collective agreement might have limited farmers’ choices and possibly increased borrowing costs. While accepting the Commission’s findings, Hooper reiterated concerns that banks might be moving away from their core lending functions to focus on climate-related issues, rather than solely on customary risk assessments.
The Net-Zero Banking Alliance provides a framework for banks to set emission reduction targets and assess their portfolios, aiming to accelerate lending towards low-carbon activities. Globally, 127 banks are signatories to this initiative, managing ample assets.
the issue has also drawn attention from politicians, with New Zealand First MP Andy Foster proposing a private members’ bill to prevent banks from refusing loans based on “woke ideology,” a move prompted by concerns about reduced lending to rural businesses.
