Pāmu is committed to reducing its climate impact through emissions reduction and strengthening climate resilience through adaption.

Doubling down on its commitment, the state-owned enterprise has now signed a second sustainability-linked loan, this time with ANZ. The new loan is aligned with existing targets and reinforces the need to drive forward parts of its sustainability work programme. This 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.

“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. Although meeting them 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 Annabel Davies, Chief Sustainability and Risk Officer for Pāmu.

Achieving the sustainability targets will result in a pricing discount from ANZ but on the flip side, there will be higher interest costs if the company fails to reach them.

This is unlikely to be the last sustainability-linked loan for Pāmu as the finance and lending market is changing 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.

“ANZ is committed to sustainability, and our success in supporting and accelerating a net zero transition by 2050 will be driven by our ability to help our customers reduce their emissions,” said Dean Spicer, Head of Sustainable Finance at ANZ.

Pāmu Chief Financial Officer Steve McJorrow said: "It is 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.”

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Contact: Kara Tait, Pāmu Head of Communications and Engagement, 021 240 7827

Note to editors:

Pāmu is the brand name for Landcorp, a State-Owned Enterprise, and one of New Zealand’s most innovative farmers and food businesses. It is also the name given to the quality products created by the company. Pāmu is the Māori word ‘to farm’ and reflects the deep connection New Zealanders have with the land, born from respect, and a genuine desire to protect and enhance the environments in which the company works.

What are sustainability performance targets?

How are the GHG reduction targets set?

The GHG reduction target is set using guidance provided by the Science Based Targets Initiative. This is a global partnership that provides a clearly defined path to reduce emissions in line with the Paris Agreement goals and keeping our contribution to global warming in line with 1.5 degrees.

What is Pāmu doing to reduce emissions?

Starting by understanding our current state, initiatives underway at Pāmu to reduce emissions include all farms gaining Toitū ‘carbon reduce farm certification’, diversification of land use, and a partnership with Focus Genetics and AgResearch to breed low methane emission livestock.

Further work, 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).

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