FARMERS For Climate Action has backed the ANZ bank’s support for a low carbon economy, despite opposition from Federal Minister for Agriculture David Littleproud and Western Australian graziers.
FCA chair Charlie Prell said that regardless of the bank’s expectations that its business clients now build climate change mitigation and adaptation risk into their strategies, farmers needed to “get ready” for changing weather patterns.
In its ANZ climate change statement released earlier this week, the bank said it would support its customers to transition to a low carbon economy by:
- Providing finance and advisory services for activities such as energy efficiency improvements, low carbon energy generation, resilient infrastructure and carbon abatement
- Contributing directly to investment in the development of low or zero emissions industries, technologies and practices through ‘green’ bonds
- Encourage the development of new industries and business models, and supporting innovative solutions from small and large business customers that will drive the changes needed to achieve a decarbonised economy.
The bank also said recognised its communities and customers could be impacted by climate change directly through increasing severity of weather events (‘physical risks’), or through legislative, regulatory or policy responses, such as carbon pricing and climate change adaptation or mitigation policies (‘transition risks’).
“We factor these risks into our lending decisions primarily through an assessment of our customers’ capacity to deal with climate change and changes to regulatory environments.
“In financing key sectors such as energy, transport, buildings and agriculture, we expect our business customers to build climate change mitigation and adaptation risk into their business strategies and to establish plans to support the transition,” the bank said.
The ANZ statement prompted Mr Littleproud to threaten a Nationals review of the availability of deposit guarantees “to protect Australian farmers from these sorts of arbitrary boardroom ideological agendas.”
Mr Littleproud was supported by the Pastoralists and Graziers Association president Tony Seabrook, who said ANZ’s new lending guidelines will severely cripple many family farms and pastoral stations.
“By demanding that farmers become carbon neutral or they will not get financing, not only shows how out of touch the ANZ is with the agricultural sector, but how banks are continuing to impose their own damaging moral values at a time when our national economy strives to recover from the global pandemic.
“Minister Littleproud is absolutely correct in his statement that ‘Banks are not and should not try to become society’s moral compass and arbiter’, and we at the PGA, both strongly endorse his comments against the ANZ, and commend him for standing up for the Western Australian agricultural sector,” Mr Seabrook said.
However, ANZ chief executive officer Shayne Elliot said the updated carbon policy would not mean the bank will be shifting support away from farmers.
“I want to assure you that this is absolutely not the case.
“ANZ’s climate change statement is focused on the top 100 carbon emitters, and will have no impact on the bank’s farmgate lending practices,” he said.
“We remain firmly committed to supporting Australia’s farmers and producers, now and into the future.
“This is about helping our major agribusiness customers run more energy and capital efficient operations, it’s not about family farms,” he said.
“The measures announced today focus on supporting large Institutional customers across all sectors in their transition to a low carbon business.”
ANZ statement is ‘sound financial due diligence’ – FCA
Mr Prell said the ANZ climate change statement contained nothing other than statements of “sound financial due diligence.”
“We’ve been actually been promoting for a long time what we call ‘climate-smart agriculture’, running forums around the country to give farmers the information they need — the real data about climate – and then some options to minimise the risk of climate change or the weather on their own individual enterprises.”
He said there is nothing new in the ANZ statement, ABARES has already spoken about declining agricultural production due to climate and other banks are all focussed on identifying that risk and determining with farmers how they can adjust their farming practices to be more resilient.
Mr Prell said he was disappointed with the reaction of Mr Littleproud and the PGA.
“If farmers are prepared to adjust their systems and get some assistance from banks – and the ANZ is not talking about individual farmers at this stage, except maybe for some of the large agribusiness companies.
“Farmers definitely need to get ready for the weather patterns that are coming and that is obviously is a consequence of climate change.
“Some of them don’t admit that, but maybe that’s from ideology, or not really understanding the data the climate scientists have been talking about, because it is fairly complicated.”
He said FCA were taking a proactive stance with its forums to explain climate change data.
“I just see this as an opportunity for farmers to actually make more money from sequestering carbon.
“If we are serious about sequestering carbon in trees and in soil then we have to be acknowledge the reality of climate change, otherwise there is not going to any payment for that.”
Citing the debate native vegetation management, Mr Prell said under a decent climate policy, there would be an opportunity for farmers to be paid to manage that vegetation properly, either retaining or enhancing it.
“The main reason native vegetation management is emotive is that there has been no acknowledgment of the contribution that farmers are making right now to absorbing carbon.”
Focus on the carbon opportunities
The New South Wales sheep producer at Crookwell said the National Farmers Federation and Meat & Livestock Australia had policies to achieve net zero emissions by certain dates. Outside of drought years, he has run up to 2000 Corriedales and 150 cattle, but is now running about 800 sheep and 100 cows on 800 hectares.
The Prell property has wind turbines and he is investigating putting solar panels on his less productive land.
“Also I am running a sustainable agricultural operation that allows me to make the most of the rain when it does come.”
Mr Prell said if Australia’s political leaders are not prepared to recognise the risks of climate then “we need to do it ourselves.”
He despaired that farmer representative organisations continued to “put their head in the sand” about climate change.
“There is risk, but there is also opportunity, and we need to start focusing on the opportunities instead of the threat and the risk.”
Mr Prell was recently elected as the leader of FCA, and Dr Anika Molesworth, an agricultural scientist and former Young Farmer of the Year, has been elected to the position of deputy chair.
Read the ANZ climate change statement here.