The move creates new forms of value for farmers
A partnership between ANZ Bank New Zealand and Silver Fern Farms has established one of New Zealand’s largest sustainability-linked working capital financing facilities.
The facilities refinance the existing $320 million working capital financing, with financial close in April 2022, and are linked to Silver Fern Farms achieving certain sustainability performance targets. If the targets are achieved, the multinational meat company is rewarded with a lower interest rate and if missed, will pay a higher interest rate.
“Silver Fern Farms is leading the way in a sector that is under considerable scrutiny in terms of its sustainability impacts,” said Dean Spicer, ANZ NZ head of sustainable finance. “The structure of the sustainability-linked financing facilities has been tailored to the challenges faced by the red meat sector in terms of farmers and farming practices, water use and waste management as well as, obviously, emissions reduction initiatives.”
The sustainability targets include:
- The adoption of the comprehensive New Zealand Farm Assurance Programme Plus (NZFAP+) by Silver Fern Farms suppliers;
- The reduction of processing emissions in line with its Science-Based Target initiative (sbti) target of 42% Scope 1 and Scope 2
- Greenhouse gas emissions reduction by 2030 from 2020 baseline year;
- Reduction of total waste to landfill (incl. Organic waste) from processing sites;
- Reduction of water used at processing sites; and
- Enhanced environmental monitoring and reporting.
“At Silver Fern Farms, we have recognised that to deliver and grow as a business we need to take action to thrive today and shape tomorrow in a way that creates long term sustainable value,” said Kate Beddoe, Silver Fern Farms chief sustainability and risk officer. “Aligning our sustainability ambition with financing demonstrates how serious we are about leading change not only in the red meat industry, but for Aotearoa more broadly. We’re backing our farmers to lead the world in nature positive food production; that’s a pretty exciting space to be operating in.”
“Our commitment, and follow-through, on sustainability issues is a key way we’re making sure we do the right thing by our customers who increasingly want their red meat sustainably produced and processed,” said Simon Limmer, Silver Fern Farms chief executive. “Sustainability-linked financing of this size is a significant step for Silver Fern Farms and emphasises our commitment to respond to the rise of conscious consumers and create new forms of value for farmers.”
ANZ acted as sole mandated lead arranger and bookrunner, and joint sustainability coordinator, alongside BNZ, and Rabobank.
