26 Oct 2021

Westpac NZ and Pāmu have signed New Zealand’s most comprehensive Sustainability-Linked Loan to date, also the largest in the agricultural sector, and the first involving a state-owned enterprise.

Pāmu, also known as Landcorp, is New Zealand’s biggest farming business. It will borrow $85m from Westpac NZ over three years. To incentivise continued improvement in sustainability performance, Pāmu will receive a pricing discount from Westpac NZ if it meets material and ambitious performance targets and pay higher interest costs if it fails to reach them.

It is the first Sustainability-Linked Loan in the agricultural sector to include a 1.5-degree Science-Based emissions reduction target that will be validated against global best practice.

Pāmu has a nationwide portfolio of 114 farms that produce milk, beef, lamb, wool, venison, wood and other natural products to both large processors and niche markets globally. Pāmu’s General Manager Sustainability and Farming Systems Lisa Martin says farming sustainably is a core part of Pāmu’s business approach.

“We work hard to farm in a way that enhances and enriches the natural environment and land we farm, and both sustainability and innovation are key to ensuring ‘future fit’ farming systems,” Ms Martin says.

“This leading Sustainability-Linked Loan is another step on our journey of constant improvement in the stewardship across our farms. It provides a real incentive for the business to continue to build on the farm performance plans we already have in place across our farm network and provides stretch goals across the perspectives of sustainability, environmental, people and animal welfare.”

Pāmu’s Chief Executive Steven Carden says Pāmu has a leadership role to play in the sector.

“We are really pleased to be part of the most comprehensive Sustainability-Linked Loan in New Zealand to date. We see it as another way we can use our size, scale and diversity to lead an initiative like this for the agriculture sector.

“We anticipate that these sorts of sustainability metrics will become standard for most commercial lending in the future, so our partnership with Westpac is about building capability to regularly measure and report on the progress we make improving our sustainability performance.”

The loan’s incentive-based pricing is aimed at encouraging Pāmu’s farmers to improve all aspects of farm sustainability. It outlines annual milestones to reduce all scopes of greenhouse gas emissions across the entire value chain of the business.

By embedding Toitū Envirocare’s new Farm Certification program across the life of the loan, Pāmu farms will be able to credibly measure, manage, verify and reduce their greenhouse gas emissions.

The loan encourages Pāmu to roll out a comprehensive “Sustainable Farms Performance Program” across Pāmu farms. This will help inform integrated farm plan priorities and complement and support workstreams across key areas such as animal health, welfare and nutrition; environment, as well as people, culture and community, climate change adaptation & mitigation.

The deal also includes a commitment to year-on-year improvements in health, wellbeing and safety performance, and delivery of targeted mental health initiatives for Pāmu’s on-farm teams.

Westpac NZ Head of Sustainable Finance Joanna Silver says this loan sets an important benchmark for Sustainability-Linked Loans.

“By having an independently validated target aligning to the Paris Agreement and committing to reductions that cover all scopes of emissions, Pāmu is really raising the bar on climate ambition in the agricultural sector,” Ms Silver says.

“Kiwi farmers and growers have a big part to play in supporting Aotearoa’s transition to a resilient, net zero economy for the benefit of everyone. On-farm sustainability is key for New Zealand as we look to the future, and helping our rural communities look after their wellbeing is really important, so we’re pleased Pāmu have committed to broader sustainability targets and providing mental health training for all Pāmu farm managers.

“Sustainability-Linked Loans are a great example of like-minded organisations working together on projects that will deliver real benefits for their people, customers, our environment and our communities.

“As a major lender with a target of enabling $10bn of sustainable finance by 2025, we were delighted to work on this broad structure with Pāmu and we look forward to helping more organisations achieve their ambitious sustainability performance targets across their business.”

Westpac and Pāmu also thanked EY for providing assurance services over the targets in the loan to ensure it meets the international principles and standards.

Editor’s note
: Details of Pāmu’s Sustainability-Linked Loan goals:

Sustainability Ambition


Verification and achievement of a Science Based Target to reduce greenhouse gas emissions reductions in line with global goals



Pāmu will establish a science-based decarbonisation target aligned to the scale of reduction required to keep the global temperature increase to 1.5°C above pre-industrial temperatures.  The target will be validated by the Science-Based Targets initiative (SBTi*) (or a credible verifier confirming alignment to the SBTi methodology).

Pāmu will implement an Emission Reductions Plan to achieve the target and aim for interim annual emissions reduction targets out to June 2024 as set out in the Sustainability-Linked Loan.

Pāmu commits to reduce greenhouse gas emissions from all emissions scopes (being Scope 1, 2 & 3 emissions) in accordance with the Emissions Reduction Plan, and at a minimum of at least 4% per year.

Toitū Farm Certification Program across the farm portfolio


Pāmu is committed to its farms achieving the Toitū Farm Certification Program, staged across 3 years.  This is New Zealand's first carbon reduction certificate designed specifically for farms.  In addition, all Pāmu farms will have emission reduction targets and decarbonisation plans documented by 2024.

Improve on-farm sustainability performance


Pāmu will implement a staged assessment of its tailored ‘Sustainable Farms Performance Program’ across all Pāmu Farms by 2024.   This is a comprehensive sustainability improvement program designed by Pāmu to assess on-farm performance against material sustainability metrics and recommend sustainability improvements.

Improve employee wellbeing


Pāmu aims to deliver year-on-year improvements in health, wellbeing and safety through ongoing safety assessment, and leadership and delivery of targeted mental health initiatives.  By 2024, Pāmu is targeting at least a 26% reduction in injuries to reduce Pāmu’s Lost Time Injury Frequency Rate to 6.9. Pāmu is also committed to provide mental health training for 100% of all Farm Managers and for more than double the current amount of mental health training for farm staff.

About the SBTi

The Science Based Targets initiative is a global partnership that provides a clearly defined path to reduce emissions in line with the Paris Agreement goals. The SBTi independently assesses and approves companies’ emissions reductions targets in line with its strict criteria. 13 companies in New Zealand have set science-based emission reduction targets that have been validated by the SBTi.

About Pāmu

Pāmu is the brand name for Landcorp, a Stated Owned Enterprise, and one of New Zealand’s most innovative farmers and food businesses. It is also the name given to the quality products created by the company. Pāmu is the Māori word, “to farm”, and reflects the deep connection New Zealanders have with the land, born from respect, and a genuine desire to protect and enhance the environments in which the company works. It’s a proud provenance that stands behind every product bearing the Pāmu name.