The amount of interest paid on a bank loan by a cattle company in Queensland will be billed based on how well they reduce greenhouse gases, meet animal welfare goals and provide a safe place to work for their staff .
- Queensland cattle company to see bank loan tied to sustainability measures
- The interest rate will depend on how the company treats animals, workers and the environment
- Bank says green loan was driven by customer interest and global trends
In what the Commonwealth Bank claims is a first for Australian agriculture, the Stockyard Group has taken out a ‘sustainability loan’ that could save it tens of thousands of dollars to meet certain social responsibilities. .
Details of the deal are confidential, but it is expected that the Stockyard family group will be charged lower interest on the three-year loan if it can meet targets set on five metrics covering greenhouse gas emissions. , animal welfare and occupational health and safety.
Metrics will be audited
Stockyard Group, which operates a 20,000 head of cattle feedlot in the Darling Downs and exports branded beef to 20 countries, said it has been approached by the Commonwealth Bank about the prospect of a sustainability loan , then worked with the bank to agree metrics to be audited by independent third-party Ernst & Young.
Stockyard Group chief executive Lachie Hart said he hoped the audits would eventually be available to the public.
“We want to be very clear to our customers and our community that we are trying to achieve carbon neutrality by 2030,” Hart said.
“It’s tens of thousands of dollars to us every year if we meet these [bank loan sustainability] targets, or it’s tens of thousands of dollars if we don’t and we have to pay extra.
“But being the first agricultural company in Australia to have these sustainability-linked loans, we hope that they will promote to the wider industry and the agricultural sector these innovative approaches that our banks and the people who fund us by capital seek to help us achieve these sustainability results. “
Mr Hart said that regardless of the loan, Stockyard Group has aligned itself with the goal of livestock-scale carbon neutrality by 2030.
“It is our responsibility to pass our business to the next generation in a much better position,” he said.
“The real results here are that our land, our environment, our communities, our people are going to be a lot better off if we start targeting those results and goals that we are trying to achieve.”
Mr Hart said that if Stockyard were penalized, the Commonwealth Bank would contribute the funds to an industry-approved sustainability research project that would benefit the entire industry.
Commonwealth Bank Agribusiness Director Grant Cairns said the sustainability loan was driven by customer interest.
“Certainly our number one clients are very interested in this. Shareholders are interested in this. Our institutional investors are interested in this.
“I think the community is also interested in a more sustainable future. Many stakeholders are interested in the future of sustainability.
Others should follow
Mr Cairns expected more Australian farmers and agribusinesses to consider taking similar initiatives.
“Farmers are always looking for how I can be more efficient, more productive, take care of my land even more sustainably. I think all of these things are on the mind, so I think there will be increased demand for it. these kinds of products and innovations in the future, ”he said.
Asked whether farmers who do not meet sustainability criteria should fear losing access to loans, Mr Cairns said the Commonwealth Bank was “absolutely, deeply engaged in the sector and providing capital to the sector. sector it will need to continue to grow and be successful ”.
The loan announcement comes as Queensland agricultural lobby group AgForce targeted banks.
Its chief executive, Mike Guerin, took to Twitter this week to say: “Financial institutions have a job to do – acting as a legislator is not one of them.”