CBA's Agri Green Loan Promotes Sustainable Agriculture
CBA has launched a new loan to assist agribusiness customers in transitioning their operations to be more sustainable and investing in environmental projects.
According to CBA, the Agri Green Loan provides upfront funding for farmers who want to engage in eligible initiatives that cut greenhouse gas emissions, create on-farm climate resilience, or improve their nature capital.
It follows the August launch of carbon footprint tracking, which allows CBA customers to track their carbon impact via the CommBank app, and is consistent with initiatives launched by lenders and aggregators to have a positive influence on the environment.
The Agri Green Loan is the outcome of a pilot programme in which participants were offered discounted funding. The funds were used to invest in qualified activities that improved natural resource management and climate resilience.
Agriculture, according to CBA group executive for business banking Michael Vacy-Lyle, is a "core sector" of the Australian economy. He called it "critical" to assist the sector in delivering a purposeful transition.
According to the Australian Bureau of Agricultural and Resource Economics and Sciences, the agriculture sector accounts for approximately 12% of the country's exports, according to Vacy-Lyle.
According to him, the push for more sustainability is opening up new chances for agribusinesses.
“Agribusinesses are continuing to take actionable steps to reduce their environmental impact and often also enhance farm productivity. Many of our customers are transforming their operations by investing in new technology and upgrading infrastructure to reduce emissions or adopt more sustainable farming practices,” Vacy-Lyle said.
CBA said one of the pilot participants was VRM Biologik, a soil restoration innovator based in Queensland, which used the programme to accelerate the implementation of its patented regenerative farming technology.
VRM Biologik founder and president Ken Bellamy, a long-time supporter of sustainable agriculture, said the pilot helped to integrate the company's sustainability, strategic, and financial goals, resulting in favourable environmental outcomes for the company and its clients.
CBA stated that VRM Biologik used Agri Green Loan funding to grow mustard from seed during frost over winter at a location near Miles in western Queensland.
“The Agri Green Loan helps the whole industry to become more sustainable as farmers can look to improve their own regenerative growing practices or invest in other environmental projects,” Bellamy said.
According to CBA, regenerative farming methods, converting damaged land to improve soil quality, planting trees or shelter belts, or installing renewable energy are all examples of how the loan could be used.
The provisions of CBA's Agri Green Loan include no establishment charge and a reduced rate. The variable rate for loans under $1 million is 3.99% as of August 25.
CBA also offers sustainability-linked loans and energy-efficient equipment funding to businesses looking to improve their sustainability and manage the effects of change.
Source: MPA News