New sustainability finance agreement signed

Craigmore Sustainables, the largest diversified rural investment company in New Zealand, has highlighted its commitment to achieving better environmental outcomes across its primary sector portfolio with a new $142 million sustainability-linked loan (SLL) agreement for one of its first investment portfolios, Craigmore Farming Partnership.

The loan facilities, which are provided through a club deal arrangement by Rabobank and ASB, is one of the largest of its type for a New Zealand agribusiness company operating inside the farm gate.

It will see Craigmore Farming Partnership (CFP), which operates dairy farms and horticulture properties across New Zealand, receive financial incentives as it delivers on targets linked to its sustainability strategy. This includes greenhouse gases, people and leadership, animal welfare, and biodiversity.

New Zealand-owned Craigmore Sustainables has built and actively manages a portfolio of dairy, grazing, forestry and horticultural properties covering over 25,000 hectares throughout New Zealand.

“Our whole purpose is to produce globally sought-after food and fibre that leads the way in sustainability practices while benefiting our rural communities,” says Che Charteris, Craigmore Chief Executive Officer.

“This agreement will help Craigmore deliver on this ambition. Specifically, a big focus is to support our teams to identify, test and adapt GHG-reduction solutions to integrate into real-world farming and orcharding operations.

“We’re here to grow the best of Aotearoa New Zealand – whether that be the best crops and varieties, or the best in our people and our environment. Working with our partners to integrate sustainability into rural debt in a detailed manner helps achieve this goal for us, and other rural businesses that wish to follow this path.”

Paul Burns, Craigmore’s Head of Acquisitions & Corporate Finance, says the facility is a tool that will accelerate the businesses sustainability goals which are integral to its long-term strategy.

“We have ambitious sustainability targets and to execute these will require a mixture of practical management focus, system optimisation and continued investment. The SLL targets align perfectly to our existing targets across these areas.”

Craigmore has set bold climate aspirations, seeking to materially exceed the GHG reduction targets set by the Climate Change Commission through land use change and changes to existing operations. This includes one of New Zealand’s first carbon-neutral dairy farms by 2035. In addition to systemic changes to achieve these goals, there is a programme of over half a dozen specific projects with potential for meaningful GHG reductions.

Craigmore’s commitment to investing in new technologies and practices is also driving improvements in key areas beyond GHG emissions, such as water use efficiency and water quality, with nitrogen loss on Craigmore-managed dairy farms decreasing by six per cent in 2022 and positive scores in visual soil assessments.

A key part of the new loan also focuses on native restoration projects and further developing team leadership skills within its businesses.

Bruce Weir, Rabobank New Zealand General Manager of Country Banking, says Rabobank works closely with clients in New Zealand and around the world to help them achieve their sustainability goals.

“We have a strong and valuable relationship with Craigmore, whose commitment to meeting sustainability and environmental challenges very much aligns with Rabobank’s global commitment in this space. This loan facility is just one example of that commitment. We congratulate Craigmore for taking the next step in accelerating its business sustainability goals.”

ASB Acting Executive General Manager of Business Banking, Ben Speedy says ASB, which also acted as Sustainability Co-ordinators, is delighted to support Craigmore with the SLL.

“Craigmore is at the food and fibre industry vanguard when it comes to emissions reduction innovation and progress on environmental, sustainability and governance, while having people and the community at the heart of what they do – they deserve high commendation for their work.”

KPMG New Zealand provided a second party opinion to ensure that the sustainability targets of the loan align with the Asia Pacific Loan Markets Association Sustainability-Linked Loan Principles, as well as provided limited assurance.

Alton Pollard, KPMG’s Head of Sustainable Finance, says: “KPMG is very pleased to assist Craigmore in linking its ambitious environmental, biodiversity and sustainability targets to its debt financing arrangements.

“It’s great to see ASB and Rabobank supporting Craigmore’s sustainability endeavours by offering a club deal arrangement SLL that offers pricing incentives for achieving sustainability outcomes and it was a pleasure to work with Craigmore and the banks through this process.”