Commerce Commission to probe big bank membership of UN’s Net-Zero Banking Alliance

Thursday, 20 March 2025

Members of the alliance all promise to reduce greenhouse gas emissions from their lending and investment portfolios, which Fed Farmers calls ‘cartel behaviour’.

The Commerce Commission has launched a formal investigation into a complaint from Federated Farmers that big bank membership of the global Net-Zero Banking Alliance may breach New Zealand’s anti-cartel laws.

In December, Federated Farmers asked the commission to undertake an urgent investigation into whether membership of the United Nations organised alliance had resulted in an alignment of farm lending practices among the big banks.

These included asking farmers about their on- farm emissions, setting 2030 emissions reduction targets that looked “remarkably similar”, and a reduced willingness to lend to some farmers.

Members of the alliance all promise to reduce greenhouse gas emissions from their lending and investment portfolios to align with pathways to net-zero by 2050 or sooner, and to set reduction targets for 2030 or sooner.

“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 banking spokesperson Richard McIntyre said in December, with those banks dominating 97.3% of agricultural lending.

“This raises some serious questions about the potential alignment of lending policies and anti-competitive cartel-like behaviour that we think deserve further scrutiny,” McIntrye said.

In response to an inquiry from The Post, Federated Farmers issued a statement saying: “The Commerce Commission have made some initial enquiries, and as a result of that they have decided to open an investigation under section 30 of the Commerce Act which relates to alleged cartel behaviour.”

A statement from the Commerce Commission said: “Following concerns raised with the Commission, we’ve opened an investigation to determine whether the adoption and alleged alignment of net-zero strategies and targets by banks, including commitments made under the Net-Zero Banking Alliance, could breach section 30 of the Commerce Act.

“We are continuing to obtain information from relevant parties to determine whether there is conduct that breaches the Act. As this is an active investigation, we’re unable to make any further comment, including how long the investigation might take.”

During Parliament’s banking inquiry banks’ carbon targets for farmers have become a fraught issue, especially as several New Zealand banks had tougher emissions reduction targets for New Zealand farmers than their Australian parent banks had set for Australian farmers.

MPs were also concerned that emissions reduction ambitions may have played a role in big banks’ preference for lending to households to buy urban homes, than lending to farmers, which has seen home lending expand, and rural lending stagnate.

The big four New Zealand banks are all members of the United Nation’s Net-Zero Banking Alliance, or are members themselves.

Banks’ climate moves so angered Resources Minister Shane Jones that New Zealand First drafted an anti-woke banking bill, which would prevent banks from debanking the likes of petrol stations, coal miners and farmers for environmental or social reasons.

ANZ’s Australian parent bank is a member of the Net-Zero Banking Alliance, and so is Westpac’s Australian parent bank.

ASB’s parent bank Commonwealth Bank of Australia is also a member, and so is Rabobank’s Dutch parent bank.

However, New Zealand bank sustainability reports show Net-Zero Banking Alliance pledges of Australian parent banks are flowing into New Zealand.

Westpac NZ’s 2024 sustainability report said: “Westpac Banking Corporation (WBC) is a member of the Net-Zero Banking Alliance (NZBA). Westpac Group has set targets for the nine priority sectors set out by the NZBA.

“The nine NZBA priority sectors are agriculture, upstream oil & gas, aviation, cement production, real estate, power generation, steel production, thermal coal mining and aluminium. These targets include two targets for Westpac NZ’s lending to the agricultural sector which relate to the emissions intensity of our portfolio,” it said.

In its 2023 Sustainability report, ANZ NZ said: “As a member of the Net Zero Banking Alliance, the ANZ Group commits to transition its lending in key sectors to net zero emissions by 2050.

The Net Zero Banking Alliance is a global club of banks aligned in a United Nations project to transition the world to a zero emissions economy.

“As part of the ANZ Group, ANZ NZ is included in this commitment and contributes to the ANZ Group’s climate targets,” it said.

BNZ is a member of the alliance in its own right.

Federated Farmers has called on banks to follow the example of some US and Canadian banks, with withdrew from the alliance when Donald Trump was re-elected as US President.