November 21, 2024 • 7 mins
Westpac has been accused of hypocrisy over punishing Kiwi farmers for their emissions while investing in fossil fuels.
Westpac is among the major banks that introduced emissions reduction targets for farmers - including reducing the emissions intensity of the dairy farms it finances in Australia and New Zealand.
However, these targets translate into Westpac Australia allowing Australian dairy farmers to continue producing more CO2-equivalent emissions per tonne of milk than New Zealand dairy farmers.
Chief executive Catherine McGrath says Kiwi dairy farmers start at a better level than their Australian counterparts.
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Episode Transcript
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Speaker 1 (00:07):
You've been tracking where the money is flowing. When you
build a.
Speaker 2 (00:09):
Business hour, we'd head the duplicyl and my hr on
news talks at me. Hey, we've got a Reserve Bank
decision next week and what they're going to do with
the OCR it's obviously a cut just how much we're
going to talk to Liam dan about what they're looking at.
Denmark has just agreed to implement a fart tax on
the farmers. Jamie McKay on that, and in Vidia's revenue
has almost doubled for the year, So Sam Dicky will
(00:32):
talk us through that right now at seven past six. Now,
as you know, a bunch of big Australian owned banks
are copying it at the moment for forcing dairy farmers
to drop their climate emissions. And what makes the situation
worse is that our key we dairy farmers, have to
go lower than Australian dairy farmers. And what makes that
even worse in Westpac's case is that Westpac is making
money themselves off investing in climate destroying industries. And west
(00:55):
Pax chief executive Katherine McGrath's with us. Hey, Catherine, Hi, Heather,
thank you very much for your time. This evening, Why
are you being tougher on our dairy farmers than you
are on the Aussie dairy farmers.
Speaker 1 (01:08):
So the first thing we know is that our New
Zealand farmers are some of the best in the world
and we're some of the most efficient in our production.
And so that means the target that we've put at
a portfolio level as a not for individual farmers is
actually smaller than the target that's been put in place
at a portfolio level in Australia. And that's reflecting how
(01:28):
good our farmers are today already.
Speaker 2 (01:30):
As in your asking them to go lower than the
Australians because they are so.
Speaker 1 (01:33):
Good, there is a less of a reduction on the
total portfolio of agri in New Zealand because we start
in a better place than the Australians.
Speaker 2 (01:43):
Too cool, But why don't you level the field because
it's one climate. I mean, if you want, let's say
you're taking the Australians to zero point eight five, why
not let the key we's got to zero point eight
five as well.
Speaker 1 (01:53):
The way we're looking at it is eighty percent of
the markets that our farmers export to either have or
about to have mandatory emissions disclosures, and we know that
we want Kiwi products to be at the top of
the list, and so therefore us putting skin in the
game through having a sustainable farm loan is helping our
Kiwi farmers to make that transition better and faster. And
(02:15):
it's really interesting that forty three percent of our lending
in less than eighteen months is on a product which
farmers have chosen to go on to to make their
farm even more sustainable. So I think our farmers are
voting with their feet.
Speaker 2 (02:27):
Which markets are you talking about?
Speaker 1 (02:31):
The export markets that we've got around the world, UK Europe?
Eighty eighty percent of all of our export markets.
Speaker 2 (02:38):
The UK and Europe in that And which are the ones.
Speaker 1 (02:41):
I haven't got a full list of them, because eighty
percent of the markets that our export product are going
to are interested in emissions, Catherine, So what but that
they're measuring it and so our.
Speaker 2 (02:55):
Jobs and are they punishing us for it?
Speaker 1 (02:57):
Our job is to help our farmers products are always
at the top of the list.
Speaker 2 (03:02):
Are those markets all going to punish us if they
don't see enough change or is it just.
Speaker 1 (03:09):
You're saying so what those markets are saying? As though
they want to understand the omission intensity of the products
that are being produced, and there's no punishment growing from
west Hold on. There's no punishment going from Westpac to
our farmers. Actually, Westpac is putting skin in the game
and for farmers that want to do a sustainable lending product,
then we're actually giving them an interest rates discount. And
(03:32):
so I think we're doing a great job at supporting
QUI farmers.
Speaker 2 (03:36):
I just I'm just the reason I'm picking you up
on that is because this stuff gets thrown around a
lot and it is not always strictly true what is
being said here, and it's been catastrophized to a point
that I think is unfair on farmers. Why, okay, why
are you why? Why do you think it's even the
bank's place to be the climate police on these guys.
If they really care about retaining markets, they could do
(03:57):
it themselves.
Speaker 1 (03:59):
So no one, I don't think we've been the climate
police at all. But we recognize that export markets are changing,
and we're saying we're there to support our farmers and
helping to make them resilient for the longer term. So
by putting in place things like the sustainable farm loan
that our farmers can say we're interested in, we want
to do it, we're signing up to our own plan.
(04:21):
You're giving us a discount. I think that's exactly the
sort of thing that we should be doing to help
our farmers do what they've been doing for years, but
do even more as the markets change.
Speaker 2 (04:33):
So Catherine, you're going to offer them a discount if
they hit the target that you've set. What if they
come to you and they go, actually, now I'm not interested.
I'll just take the standard rate and I'm just going
to do all of the climate ambisions. I feel like,
are you cool with that?
Speaker 1 (04:46):
So we're very So what we're doing with our farmers
is for those that do want to take the sustainable
farm loan that has a discount, we give them that
discount upfront, and they've got a couple of years to
put in place the changes that they want to put
in place. So I think that's a really good thing
for our farmers who aren't wanting to do anything about
that their lending continues as it has done, so there
(05:07):
is no punishment happening. There is support, and there's support
to help our farmers be resilient in the longer term.
Speaker 2 (05:14):
And does that lending does that lending extend beyond twenty thirty?
So if twenty thirty one comes round and they're like,
I just I'm just doing everything for the climate that
I don't care, you're cool with that.
Speaker 1 (05:26):
I haven't got the figure in my head in terms
of how long some of our farming loans are.
Speaker 2 (05:32):
But well, I'm asking you because you have a twenty
thirty target, so beyond twenty thirty, are you still going
to take a hands off approach with farmers who don't
care about the climate and want to do everything that
they want to you will continue to lend to them.
Speaker 1 (05:44):
We want to continue to grow agribook and we're really
confident that New Zealand farmers want to continue to have
their products very viable in the longer term. That didn't
we want to sport that sector. I don't know what
the Bank's going to decide to do in twenty thirty,
but I am very c that we are supporting farmers
by stepping in and helping them when they want to
(06:04):
be helped. If they don't want to be helped, we
continue to bank them. Secondly, that we're seeing great take
up of a product. That's indicating to me that farmers
are voting with their feet and this is something they
want to do. If you'd asked me whether we'd have
had forty three percent of our lending on a sustainable
farm loan eighteen months after launching it, I would have
told the team they were being too optimistic. So there's
(06:25):
a great appetite for it amongst our farming customers.
Speaker 2 (06:28):
Are you guys hypocrites because you are doing you're asking
farmers to do all of these things and yet you
yourselves are investing nine billion dollars in fossil fueld industries,
which is, let's understand this, you are funding those businesses.
Speaker 1 (06:43):
So firstly, we're not hypocritical at all. Westpac New Zealand
is a separate business to Westpac Group and our fossil
fuel money exposure is relatively low at one hundred and
ninety three million and falling. But irrespective of which sector,
we're focused on supporting existing customers to transit and that
applies whether it's for fossil fuel customers or agri customers.
(07:05):
And we're doing great work with homeowners too, if they
want to do things to make their home more resilient
to climate there's a great product that we have which
means that they can get you know, lending currently at
zero percent to help them make those decisions. And so
our viewer as we need to have some skin in
the game, which we do across almost every sector that
(07:25):
we support.
Speaker 2 (07:26):
Okay, Catherine, thank you. I know you don't give a
lot of interviews, so I really appreciate you coming on
the show and talking to us. I appreciate your time.
That's Katherine McGrath, chief executive at Westpac.
Speaker 1 (07:35):
For more from Heather Duplessy Allen Drive, listen live to
news Talks.
Speaker 2 (07:39):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
You've been tracking where the money is flowing. When you
build a.
Speaker 2 (00:09):
Business hour, we'd head the duplicyl and my hr on
news talks at me. Hey, we've got a Reserve Bank
decision next week and what they're going to do with
the OCR it's obviously a cut just how much we're
going to talk to Liam dan about what they're looking at.
Denmark has just agreed to implement a fart tax on
the farmers. Jamie McKay on that, and in Vidia's revenue
has almost doubled for the year, So Sam Dicky will
(00:32):
talk us through that right now at seven past six. Now,
as you know, a bunch of big Australian owned banks
are copying it at the moment for forcing dairy farmers
to drop their climate emissions. And what makes the situation
worse is that our key we dairy farmers, have to
go lower than Australian dairy farmers. And what makes that
even worse in Westpac's case is that Westpac is making
money themselves off investing in climate destroying industries. And west
(00:55):
Pax chief executive Katherine McGrath's with us. Hey, Catherine, Hi, Heather,
thank you very much for your time. This evening, Why
are you being tougher on our dairy farmers than you
are on the Aussie dairy farmers.
Speaker 1 (01:08):
So the first thing we know is that our New
Zealand farmers are some of the best in the world
and we're some of the most efficient in our production.
And so that means the target that we've put at
a portfolio level as a not for individual farmers is
actually smaller than the target that's been put in place
at a portfolio level in Australia. And that's reflecting how
(01:28):
good our farmers are today already.
Speaker 2 (01:30):
As in your asking them to go lower than the
Australians because they are so.
Speaker 1 (01:33):
Good, there is a less of a reduction on the
total portfolio of agri in New Zealand because we start
in a better place than the Australians.
Speaker 2 (01:43):
Too cool, But why don't you level the field because
it's one climate. I mean, if you want, let's say
you're taking the Australians to zero point eight five, why
not let the key we's got to zero point eight
five as well.
Speaker 1 (01:53):
The way we're looking at it is eighty percent of
the markets that our farmers export to either have or
about to have mandatory emissions disclosures, and we know that
we want Kiwi products to be at the top of
the list, and so therefore us putting skin in the
game through having a sustainable farm loan is helping our
Kiwi farmers to make that transition better and faster. And
(02:15):
it's really interesting that forty three percent of our lending
in less than eighteen months is on a product which
farmers have chosen to go on to to make their
farm even more sustainable. So I think our farmers are
voting with their feet.
Speaker 2 (02:27):
Which markets are you talking about?
Speaker 1 (02:31):
The export markets that we've got around the world, UK Europe?
Eighty eighty percent of all of our export markets.
Speaker 2 (02:38):
The UK and Europe in that And which are the ones.
Speaker 1 (02:41):
I haven't got a full list of them, because eighty
percent of the markets that our export product are going
to are interested in emissions, Catherine, So what but that
they're measuring it and so our.
Speaker 2 (02:55):
Jobs and are they punishing us for it?
Speaker 1 (02:57):
Our job is to help our farmers products are always
at the top of the list.
Speaker 2 (03:02):
Are those markets all going to punish us if they
don't see enough change or is it just.
Speaker 1 (03:09):
You're saying so what those markets are saying? As though
they want to understand the omission intensity of the products
that are being produced, and there's no punishment growing from
west Hold on. There's no punishment going from Westpac to
our farmers. Actually, Westpac is putting skin in the game
and for farmers that want to do a sustainable lending product,
then we're actually giving them an interest rates discount. And
(03:32):
so I think we're doing a great job at supporting
QUI farmers.
Speaker 2 (03:36):
I just I'm just the reason I'm picking you up
on that is because this stuff gets thrown around a
lot and it is not always strictly true what is
being said here, and it's been catastrophized to a point
that I think is unfair on farmers. Why, okay, why
are you why? Why do you think it's even the
bank's place to be the climate police on these guys.
If they really care about retaining markets, they could do
(03:57):
it themselves.
Speaker 1 (03:59):
So no one, I don't think we've been the climate
police at all. But we recognize that export markets are changing,
and we're saying we're there to support our farmers and
helping to make them resilient for the longer term. So
by putting in place things like the sustainable farm loan
that our farmers can say we're interested in, we want
to do it, we're signing up to our own plan.
(04:21):
You're giving us a discount. I think that's exactly the
sort of thing that we should be doing to help
our farmers do what they've been doing for years, but
do even more as the markets change.
Speaker 2 (04:33):
So Catherine, you're going to offer them a discount if
they hit the target that you've set. What if they
come to you and they go, actually, now I'm not interested.
I'll just take the standard rate and I'm just going
to do all of the climate ambisions. I feel like,
are you cool with that?
Speaker 1 (04:46):
So we're very So what we're doing with our farmers
is for those that do want to take the sustainable
farm loan that has a discount, we give them that
discount upfront, and they've got a couple of years to
put in place the changes that they want to put
in place. So I think that's a really good thing
for our farmers who aren't wanting to do anything about
that their lending continues as it has done, so there
(05:07):
is no punishment happening. There is support, and there's support
to help our farmers be resilient in the longer term.
Speaker 2 (05:14):
And does that lending does that lending extend beyond twenty thirty?
So if twenty thirty one comes round and they're like,
I just I'm just doing everything for the climate that
I don't care, you're cool with that.
Speaker 1 (05:26):
I haven't got the figure in my head in terms
of how long some of our farming loans are.
Speaker 2 (05:32):
But well, I'm asking you because you have a twenty
thirty target, so beyond twenty thirty, are you still going
to take a hands off approach with farmers who don't
care about the climate and want to do everything that
they want to you will continue to lend to them.
Speaker 1 (05:44):
We want to continue to grow agribook and we're really
confident that New Zealand farmers want to continue to have
their products very viable in the longer term. That didn't
we want to sport that sector. I don't know what
the Bank's going to decide to do in twenty thirty,
but I am very c that we are supporting farmers
by stepping in and helping them when they want to
(06:04):
be helped. If they don't want to be helped, we
continue to bank them. Secondly, that we're seeing great take
up of a product. That's indicating to me that farmers
are voting with their feet and this is something they
want to do. If you'd asked me whether we'd have
had forty three percent of our lending on a sustainable
farm loan eighteen months after launching it, I would have
told the team they were being too optimistic. So there's
(06:25):
a great appetite for it amongst our farming customers.
Speaker 2 (06:28):
Are you guys hypocrites because you are doing you're asking
farmers to do all of these things and yet you
yourselves are investing nine billion dollars in fossil fueld industries,
which is, let's understand this, you are funding those businesses.
Speaker 1 (06:43):
So firstly, we're not hypocritical at all. Westpac New Zealand
is a separate business to Westpac Group and our fossil
fuel money exposure is relatively low at one hundred and
ninety three million and falling. But irrespective of which sector,
we're focused on supporting existing customers to transit and that
applies whether it's for fossil fuel customers or agri customers.
(07:05):
And we're doing great work with homeowners too, if they
want to do things to make their home more resilient
to climate there's a great product that we have which
means that they can get you know, lending currently at
zero percent to help them make those decisions. And so
our viewer as we need to have some skin in
the game, which we do across almost every sector that
(07:25):
we support.
Speaker 2 (07:26):
Okay, Catherine, thank you. I know you don't give a
lot of interviews, so I really appreciate you coming on
the show and talking to us. I appreciate your time.
That's Katherine McGrath, chief executive at Westpac.
Speaker 1 (07:35):
For more from Heather Duplessy Allen Drive, listen live to
news Talks.
Speaker 2 (07:39):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.
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