Wednesday, May 29, 2024

Pāmu signs new loan to meet ambitious sustainability targets

State-owned innovative farm-to-food business, Pāmu, has signed a second loan to drive forward its sustainability work programme.

Chief Sustainability and Risk Officer for Pāmu, Annabel Davies, says Pāmu is committed to reducing its climate impact through emissions reduction and strengthening climate resilience through adaption. 

The new loan, signed with ANZ, is aligned with existing targets and includes the verification and achievement of a 1.5 degree aligned science-based emissions reduction target, Toitū carbon reduce farm certification, On-Farm Sustainability Performance Programmes, and well-being support for farm managers and staff, she said.

“These goals are ambitious and in alignment with what our main customers, as well as shareholders, are asking of us. They reinforce the need for our sustainability work programme.”

Initiatives underway at Pāmu to reduce emissions also include a partnership with Focus Genetics and AgResearch to breed low methane emission livestock.

“Although meeting [our targets] will be a stretch, they all shift the dial closer to achieving our ambition of reducing our impact and improving our environmental performance in areas such as freshwater and biodiversity. We hope our learnings will also serve to help the wider sector,” said Ms Davies.

She said it was unlikely to be the last sustainability-linked loan for Pāmu, as the finance and lending market changes in response to market and consumer pressures.

“There is an increase in agricultural lending using ambitious sustainability-linked targets.”

“ANZ applauds the commitment by Pāmu to sustainability, expressed through this milestone transaction. Agriculture remains a critical sector for our economy and Pāmu has demonstrated clear leadership in embedding sustainability within their business. ANZ is delighted to have supported Pāmu and this transaction,” said Kate Gunthorp, a director in the sustainable finance team at ANZ.

Pāmu Chief Financial Officer Steve McJorrow said it was becoming “increasingly apparent that those borrowers who cannot demonstrate improvements in sustainability metrics will incur a cost of capital making them uncompetitive or become unable to source capital at all. Sustainability-Linked Loans demonstrate our sense of responsibility to the industry and create spill-over benefits.”

“It helps ensure we continue to direct our efforts towards a sustainable farming industry in New Zealand,” he said.

Further emission reduction work planned by Pāmu includes:

  • Understanding the potential GHG efficiencies to be gained through the Dairy Beef breeding programme;
  • Exploring the establishment of new methane measurement facilities for livestock in the North and South Islands;
  • Identifying and implementing low-emission technologies for dairy farm effluent ponds;
  • Hosting field days to share learnings and gain farmer and expert input; and
  • Undertaking scenario modelling of low emissions practices on farms (i.e., a digital twin approach to identify the optimal transition pathway).

Latest Articles