Queensland beef producer Stockyard Group has entered into a sustainability-linked loan (SLL) with Commonwealth Bank, in what is an Australian first for the agriculture industry.
The three-year loan has been described by Commonwealth as a landmark transaction, with Stockyard engaging in sustainability measures than will include reducing emissions and a greater emphasis on animal welfare and on people’s well-being.
“We have welcomed the opportunity to participate in this innovative financing structure and make a commitment to tie important sustainability targets to our financing costs,” said Lachie Hart, managing director of Stockyard.
Currently the beef producers are aligned with the Australian Beef Sustainability Framework and the Carbon Neutral 2030 strategy.
“To us, as a third-generation family business, it is our responsibility to pass on a viable, responsible, and sustainable business for future generations and this loan will allow us to utilise interest savings to ensure this is the case,” added Hart.
The SLL’s facility pricing is tied to five metrics and into three sustainability targets, covering reducing Scope 1 and 2 greenhouse gas emissions; improved animal welfare outcomes; and workplace health and safety innovations.
“It also provides opportunities to access internationally recognisable ESG credentials to assist with securing capital and customers in the future,” said Hart.
With the beef industry accounting for nearly a quarter of Australia’s total agriculture production, national emissions from red meat have already more than halved according to Meat & Livestock Australia, falling from 21% in 2005 to 10% in 2017.
“We know many farmers across the country are already adopting best practice sustainability and environmental stewardship, and we want to partner with agribusinesses to help them innovate and accelerate transition plans,” said Mike-Vacy-Lyle, group executive for business banking at Commonwealth.
Stockyard itself is already an industry leader in sustainability, with its Kerwee feedlot seeing power consumption reduced by 60% through the installation of on-site solar energy.
Earlier this month, Commonwealth Bank provided $2.2 billion in the country’s and the global healthcare sector’s first sustainability loan to the commercial operator of The Royal Adelaide Hospital, Celsus.