ComCom Finds No Evidence Of Cartel Behaviour In Banks' Involvement In Net-Zero Banking Alliance
The banks involved are ANZ Bank New Zealand Limited (ANZ), ASB Bank Limited (ASB), Bank of New Zealand (BNZ), Rabobank New Zealand Limited (Rabobank), and Westpac New Zealand Limited (Westpac). These banks collectively account for around 97% of New Zealand's agricultural lending market.
Commerce Commission General Manager Competition, Fair Trading and Credit Vanessa Horne says the complaint, received last December, alleged the banks were coordinating their agricultural lending policies to align with Net-Zero Banking Alliance strategies and targets. It alleged that, in doing so, the banks were potentially acting anti-competitively, in breach of the Commerce Act.
The complaint also raised concerns that this alleged coordination could reduce farmers' access to capital, resulting in higher borrowing costs and stricter lending terms.
'We know New Zealanders are very focused on the work being done by the Commission (and others) to ensure banks are acting fairly - and farmers are no different,' says Ms Horne.
'If we see activity that falls foul of the laws we enforce, we will not hesitate to act. In this case, however, we thoroughly investigated the complaint and concluded that the banks had made their own, independent decisions. We found no evidence of unlawful coordination between the banks or with the Net-Zero Banking Alliance, either relating to the banks joining or in meeting their obligations under this alliance.'
On that basis, the Commission says, it will be taking no further action.
The Commission is keenly aware that, in many sectors, New Zealand businesses are working hard to develop and deliver sustainability initiatives together. New Zealand's competition laws can accommodate such collaboration - to help businesses, the Commission has developed Collaboration and Sustainability Guidelines that can be found on its website.
Background
The Net-Zero Banking Alliance
The Net-Zero Banking Alliance is a United Nations (UN) convened initiative, supporting banks to lead on climate mitigation in line with the goals of the Paris Agreement. It was co-launched on 21 April 2021 by the United Nations Environment Programme (UNEP) Financial Initiative and the Prince of Wales Sustainable Markets Initiative Financial Services Taskforce, with 43 initial banks as signatories.
Joining the Net-Zero Banking Alliance is entirely voluntary, and any signatory may join or withdraw at any time. Banks that choose to become signatories to this alliance make a public statement of an intention to align the greenhouse gas emissions from their lending and investment portfolios with net-zero pathways by 2050 or earlier.
The Net-Zero Banking Alliance does not prescribe targets that signatories should set. Instead, it provides signatories with a framework for target setting, resources, global expertise, and tools to help them individually assess the emissions within their portfolios and understand ways that the shift of capital towards low-carbon activity might be accelerated.
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