(Bloomberg) — New Zealand’s competition regulator is investigating whether membership of the Net-Zero Banking Alliance, the global lending sector’s main climate group, is in breach of local anti-cartel laws.
The Commerce Commission is examining concerns raised about the impact of climate targets, including commitments required by the NZBA, on the nation’s banks, the agency said Thursday in a statement.
Federated Farmers, an organization which advocates for rural industries and communities, had in December complained that net zero strategies adopted by banks were resulting in potential “cartel-like behaviour”. Legislators including Prime Minister Christopher Luxon have called on executives to explain curbs on lending to sectors like fuel retailing.
Banks including Australia-based Macquarie Group Ltd. and some of Japan’s major lenders have followed US and Canadian institutions in withdrawing from the NZBA, which is now reviewing its policies.
The commission’s investigation will examine if adoption of net zero strategies by banks in New Zealand resulted in breaches of anti-competition law. “We are continuing to obtain information,” the agency said, and declined to specify how long the inquiry will take. Details were reported earlier by news website Stuff.
New Zealand, one of the first advanced economies to set a legally-binding net zero target, has made a series of green reversals since Luxon’s center-right coalition took office in late 2023. The Federated Farmers complaint last year named lenders including Bank of New Zealand, ANZ Group Holdings Ltd. and Westpac Banking Corp., all of which are members of the NZBA.
ANZ aims to support New Zealand customers “to be more resilient and competitive in light of climate transition risks they may face,” the lender said in a February submission to a parliamentary inquiry into banking competition. Westpac encourages relevant customers to reduce emissions, but does not impose obligations on them, it said in a document prepared for lawmakers last month.
“Our view is that if we exited the NZBA, that actually it wouldn’t change the work that we have to do, because we have obligations under our climate reporting,” BNZ’s Chief Executive Officer Dan Huggins told a parliamentary hearing this month.
–With assistance from Tracy Withers.
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