Commonwealth Bank has launched an Agri Green loan for farmers and agricultural businesses across the country that are reducing their greenhouse gas emissions.
The new offering will provide farmers access to funding at discounted rates for eligible purposes that reduce their greenhouse gas emissions, build resilience to climate variability, and enhance their natural capital.
The Agri Green loan joins other sustainability-linked financial products such as CBA’s Sustainability Linked Loans and Energy Efficient Equipment Finance.
It follows a successful pilot with businesses such as Queensland soil restoration innovator VRM Biologik, which joined the pilot to accelerate the implementation of its patented regenerative farming technology.
The company developed technology to restore and enrich soil, enabling farmers to enhance yields and optimise growing environments in challenging conditions.
VRM Biologik Founder and President Ken Bellamy said CBA’s Agri Green Loan pilot helped to align the company’s sustainability, strategic and financial goals, which had generated positive environmental outcomes for the business and its clients.
“Our goal is to reduce the risk of food scarcity and support agriculture’s productivity and drought resilience,” Bellamy said.
“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.”
VRM Biologik successfully used its regenerative farming practices to grow mustard from seed during frost this winter at a property near Miles in Western Queensland.
CBA Group Executive of Business Banking Mike Vacy-Lyle said agriculture was a core sector for the Australian economy, representing approximately 12% of goods and services exported.
“The drive towards greater sustainability is creating more opportunities for agribusinesses,” Vacy-Lyle said.
“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.”
The pilot, which was unveiled in November last year, covered projects that reduced emissions, sequestered more carbon, improved soil health, promoted biodiversity and vegetation cover, and protected waterways.