Emissions target divide among the big agri-lending banks

Monday, 17 November 2025

Many dairy and beef farmers are investing in reducing their emissions footprints, but there is no pathway to zero emissions yet, ANZ says.

ANALYSIS: The big four banks may sometimes look like they are distinguished only by the colour of their branding, or the size of their profit, but a split on agricultural emissions has emerged between them.

ANZ New Zealand was one of the big four Australian-owned banks criticised by Federated Farmers for either being a member of the now defunct United Nation’s Net-Zero Banking Alliance, or for its Australian parent bank being a member.

But its latest climate report, published along with its record-breaking $2.5 billion profit last week, shows ANZ New Zealand is maintaining a stand-out position on agricultural lending by not having set emissions targets for their portfolios of loans to farmers, unlike Westpac, Rabobank and BNZ.

“We have products to help customers reduce their emissions,” ANZ New Zealand chief executive Antonia Watson said.

“Our international markets are making demands of our farmers, but at this stage for us to do anything, we would need a lot more data.”

And, she said: “It’s not just the data. It’s the path.”

There were hopes for scientific methods to reduce livestock methane emissions, but Watson said: “None of them are live, or in the market yet.”

Until the bank could see an emissions reduction pathway for beef and dairy farmers, setting reduction targets would be hard to do, she said.

However, ANZ had been increasing its emissions data collection from the businesses it lends to, including farmers.

Impetus for emissions targets of the Australian-owned New Zealand banks is not a purely home grown affair. It comes against a backdrop of Australian parent banks having to play their part in getting Australia to its legislated target of being a net zero emissions economy by 2050.

As Matt Comyn , the chief executive of Commonwealth Bank of Australia (owner of ASB) said in the foreword to the bank’s 2025 annual report: “The Australian Government is continuing to develop a national Net Zero Plan to guide our country’s transition to meet our legislated target of net zero greenhouse gas emissions by 2050.”

And, he said: “We remain committed to helping our customers and supporting Australia’s transition to net zero by 2050.”

It’s an economy that includes many bank shareholders, and net zero ambitions include financed emissions in New Zealand.

The help Comyn speaks of comes from providing them with interest-bearing loans to invest in technology, but also, in the case of some, but not all, of emissions targets, and demands for data.

Westpac and BNZ also reported full-year profits in the past two weeks. Both have set agricultural emissions intensity reduction targets.

The targets have been criticised by Australia’s not-for-profit activist organisation the Climate Council, which says emissions intensity refers to the volume of emissions per unit of product made, but (and it says it is “a big but”), if unit production grows, so do absolute emissions.

“A more concrete measure of emission reduction is an absolute reduction,” it says, adding: “To tackle climate change total emissions must go down so an absolute reduction is the most relevant measure.”

There was controversy when Westpac set lower emissions intensity targets for New Zealand beef and dairy farmers to hit by 2030 than it set for farmers in Australia.

There is no pathway to net zero methane emission from ruminants.

Though the bank expected both Kiwi and Aussie farmers to reduce their emissions to 10% less than their estimated emission intensity in 2021, New Zealand dairy started with lower emissions, so ultimately had to go lower still.

In its sustainability report this month, Westpac said the emissions intensity of the New Zealand dairy farms it lends to were 6% lower than in 2021. They were down 4% in its beef farming lending book.

Like ANZ, Westpac has turned emissions-reduction into a business opportunity with both banks having loans aimed at farmers wishing to invest in emissions intensity reductions.

At Westpac, 48% of agri lending is now on the bank’s Sustainable Farm Loans, with lower loan interest rates tied to hitting environmental targets. The targets are not public, but Westpac chief executive Catherine McGrath said every farm with a Sustainable Farm Loan had hit its target.

BNZ’s target is to achieve an 11% emission intensity reduction in Agriculture-dairy, from a 2022 baseline. Like ANZ, it is an investor in the AgriZero technology programme seeking to lower dairy emissions.

In line with its Australian parent bank, ASB says between 2025 to 2030 it will “progressively set targets based on financed Emissions”, but its 2025 Climate and Sustainability Report shows it has not done so yet.

And the message from its Australian parent bank on agriculture is similar to ANZ’s. It calls agriculture a “harder-to-abate” sector, but one that is important to Australia’s future.

Comyn said its aim was to work with farmers to explore ways to reduce their environmental impacts.

“Although we reassessed the feasibility of sector-level targets for the agriculture sector, we have not set any new goals or targets for this year.”

Technologies were still in early development, he said.

Agricultural emissions made up around 18% of Australia’s emissions, and around 50% of New Zealand’s.