NZ Dairy Summer 2021

68 | nzdairy DAIRY PEOPLE » Southern Pastures Sustainability linked loan to dairy group Incentives for meeting environmental targets are built into a ground breaking three-year $50 million sustainability-linked farm loan agreement between BNZ and ethical dairy investor Southern Pastures. Meeting sustainability targets set in the agreement will result in financial rewards for Southern Pastures by way of lower loan costs. It is a first for New Zealand and signals a growing appetite for supporting change for the better on environmental performance. The innovative loan arrangement is part of BNZ’s Sustainable Finance portfolio that has been developed to help drive carbon reductions and deliver other sustainability benefits. Financial incentives in the aspirational deal are tied to specific water quality, biodiversity and carbon emission targets. These targets are ambitious and go beyond compliance minimums. Under the new loan agreement, independent on-farm audits will be conducted by AsureQuality on an annual basis to verify Southern Pastures’ progress on targets. Discounts to interest rates will be applied during the loan term provided targets are verified as met. AsureQuality is government-owned and a leading provider of food assurance services to the primary production and food manufacturing sectors. Both BNZ and Southern Pastures see this loan as a practical vehicle that can help demonstrate their genuine desire to make a real difference in improving New Zealand’s environment. This is just the start for BNZ, which plans to increasingly seek to use linked loan arrangements to encourage best practice and help New Zealand meet its climate change obligations and other environmental goals. Southern Pastures, owner of Lewis Road Creamery, is managed by a values-driven team who share an intergenerational commitment to caring for the land. The group comprises 20 farms in Waikato and Canterbury. Its Waikato farms, which supply Fonterra, include New Zealand’s largest organic farm. The A 10-Star Certified Values Program, created by Southern Pastures, is independently audited and enshrines their environmental, climatic, animal and human welfare principles. All aspects of the 10-Star Certified Program are regularly scrutinised by AsureQuality. Few would argue that BNZ has chosen well in selecting Southern Pastures to partner with them in this aspirational pilot loan venture that aims to show that capital incentives can deliver financial and environmental benefits. BNZ recognises Southern Pastures’ stature as a leader in this country’s primary sector with strong environmental goals. Southern Pastures 10 Star Certified Values underpin the group’s world-class environmentally friendly farming systems. At heart, they encapsulate a 21st century best practice NZ dairy farm ideal of healthy, grass-fed cows, free to graze open pastures and drink clean water, with no GMO seeds or crops in the mix. Likewise, their values mean that Southern Pastures’ cows receive no growth hormones or palm kernel supplement and enjoy an exceptional Sunrise over Kereru Farm, a 10 Star organic farm in the South Waikato. Proud to support Southern Pastures Get in touch to see howwe can support your business banking needs. Talk to us today • 11799 07-21 standard of animal welfare. Farming staff are also well looked after. All farms are run so as to meet environmental gold standards. Southern Pastures’ regenerative agriculture initiatives have a focus on soil health, with dung beetles used to improve pasture and healthy populations of earthworms established on South Waikato farms to enrich soil.