Pāmu commits to further sustainability-linked loans with three bank lenders
Pāmu Farms of New Zealand has refreshed its commitment to ambitious sustainability targets with lenders ANZ, ASB, and Westpac NZ in a second sustainability-linked loan. The facilities total $225 million and include terms that help to ensure farming activities contribute positively to the environment, people and communities.
Pāmu CEO Mark Leslie says as a State Owned Enterprise Pāmu is expected to be an exemplary farmer demonstrating operational excellence. This includes maintaining best practices in employment and animal welfare, as well as striving for positive environmental outcomes.
“These targets align with what our customers are expecting of us and give us a financial mandate to prioritise wider sustainability goals. We receive a discount on the interest rate for meeting the targets, and likewise, pay a higher interest rate if we fall short,” he said.
In 2021 Pāmu signed the largest agricultural sustainability-linked loan of its time and the first for a State Owned Enterprise. This covered the period FY2021-FY2024. The second sustainability-linked loan targets cover FY2025-FY2027.
Chief Sustainability and Risk Officer Annabel Davies says: “The new targets chosen reflect material environmental, social and governance issues not just for Pāmu but the whole sector. We recognise that innovation and collaboration across New Zealand agricultural value chains are crucial to making progress. Achieving loan targets will support the longer-term commercial success of Pāmu.”
She says including a livestock breeding value goal in a sustainability-linked loan is likely a world first. The target to improve the methane efficiency of sheep relies on progressing methane breeding values in Pāmu sheep flocks.
Aidan Gent, ASB General Manager Rural Banking says: “We congratulate Pāmu on this important next step in the evolution of its sustainability-linked loan. We’re excited to continue supporting a venture that drives positive social and environmental outcomes. Pāmu has shown clear commitment and leadership toward a more productive, profitable and sustainable food and fibre sector, which we believe is critical for the future prosperity of New Zealand. We’re proud to be alongside Pāmu on this mission.”
Joanna Silver, Westpac NZ Head of Sustainable Finance, says: “It’s rewarding to have played a part in this next iteration of Pāmu Farms of New Zealand’s sustainability-linked loan – the targets they’ve set are substantive and meaningful and will ultimately deliver positive outcomes for both the agricultural sector and Aotearoa. In particular, the focuses on agri-tech and emissions reduction reflect the insights we’re capturing through our own sector data – it’s clear that New Zealand farmers and growers are embracing innovation to make their operations more sustainable, and we’re committed to supporting them to do so.”
Dean Spicer, Head of Sustainable Finance NZ at ANZ New Zealand, congratulates Pāmu on its renewed commitment to sustainability and says ANZ is proud to continue to support Pāmu with this sustainability-linked loan. “Including new and innovative targets – such as using genetics and breeding to develop sheep with lower methane emissions – makes this sustainability-linked loan a real standout. This work will not only support the company’s efforts to decarbonise, but by working with industry and sharing data and knowledge it will also support the wider agri sector. It can take years to realise the benefits of these types of innovations, so it is great to see this sustainability-linked loan sitting alongside and incentivising them.”
The four sustainability performance targets include:
Reduction of net greenhouse gas emissions informed by a 1.5-degree science-aligned pathway
Annual climate targets are informed by a pathway to achieve the science-aligned target of a 30.3% reduction in net emissions (FY2021-FY2031) across Scope 1,2 and 3 emissions
Improved breeding value for methane efficiency in sheep
This target is reflective of the broader work occurring by Pāmu subsidiary, Focus Genetics, to reduce methane emissions from livestock through genetic improvement and breeding. Building on existing methane measurements, a new collaboration with AgResearch is aimed at including feed efficiency and rumen microbiomes to accelerate environmental sustainability in sheep.
Improved animal welfare through dairy beef
The third goal has an animal welfare focus and aims to reduce wastage and increase the number of calves from the company’s dairy herd that are reared and retained. The annual targets align with our aspirational target to rear 100% of the calves born on our dairy farms by 2030.
Increase in gender diversity
The final target is to improve gender representation in permanent staff at Pāmu. Annual milestone targets have been set that will help Pāmu achieve a target of at least 40% female representation across the business by 2030.
More sustainability reporting, including in the 2024 Pāmu Integrated Report (published today) can be found at: https://www.pamunewzealand.com/financials
