The interest paid on the bank loan by the Queensland meat business will be charged according to how it reduces greenhouse gases, meets animal welfare goals and provides a safe workplace for its employees.
- A bank loan to a Queensland beef company will be linked to sustainability measures.
- The interest rate will depend on how the business treats animals, workers and the environment.
- The bank says the green loan was driven by customer interest and global trends.
With Commonwealth Bank as the first for Australian agriculture, Stockyard Group has taken out a “sustainable development loan” that could save tens of thousands of dollars to meet certain social obligations.
The details of the deal were not disclosed, but family-owned Stockyard Group is expected to receive lower interest on the three-year loan if it can meet its five-metric targets covering greenhouse gas emissions, animal welfare, and workplace health and safety. …
Metrics will be verified
Stockyard Group, which operates a 20,000-head cattle feeding pen in Darling Downs and exports branded beef to 20 countries, said it was approached by a Commonwealth bank about the prospect of a sustainability loan and then worked with the bank. to agree on the metrics to be used. audited by Ernst & Young, an independent third party.
Latchi Hart, Managing Director of Stockyard Group, expressed hope that the audit results will eventually become publicly available.
“We want to make it clear to our customers and our community that we are trying to achieve carbon neutrality by 2030,” said Mr. Hart.
“Every year we receive tens of thousands of dollars if [bank loan sustainability] goals, or it is tens of thousands of dollars, if we do not do this and we have to pay extra.
“But as the first agricultural company in Australia to link these loans to sustainability, we hope it will propel into the broader industry and agriculture sector these innovative approaches that our banks and our capital financiers are looking to help us achieve. these sustainable development results. “
Hart said that, regardless of the loan, Stockyard Group has met the livestock industry’s 2030 carbon neutrality target.
“We have a responsibility to hand over our business to the next generation, which will be in a much better position,” he said.
“The real results here are that our land, our environment, our communities, our people will become much better if we start focusing on the results and goals we are trying to achieve.”
Hart said that if Stockyard is punished, Commonwealth Bank will contribute funds to an industry-approved sustainability research project that will benefit the industry as a whole.
Initiated by the client
Commonwealth Bank agribusiness chief Grant Cairns said the sustainability loan was driven by customer interest.
“Of course, our number one clients are very interested in this. The shareholders are interested in this. Our institutional investors are interested in this.
“I think the community is also interested in a more sustainable future. There are many stakeholders interested in the future of sustainability. “
More are expected to follow
Mr Cairns expected more Australian farmers and agricultural businesses to turn to similar initiatives.
“Farmers are always thinking about how I can be more efficient, more productive, and take care of my land even more environmentally. I think this is all on my mind, so I think the demand for these types of products and innovations will continue to grow. in the future, ”he said.
Asked whether farmers who are not on track to sustainability should worry about losing access to credit, Mr Cairns said Commonwealth Bank “is absolutely, deeply committed to this sector and provides it with the capital it will need to continue its growth and development. successful”.
The loan was announced as the Queensland farm lobbying group AgForce targeted banks.
Its CEO Mike Guerin tweeted this week, “Financial institutions have a job to do – acting as a legislator is not one of them.”