Rebekah Cain: Why banks matter in the push to decarbonise the economy

<p>Like it or not banks are a cornerstone of our economy, meaning they'll need to be a key influence in the push to decarbonise.</p><p>One of the ways BNZ is trying to do this is through membership of the <a href="https://www.unepfi.org/net-zero-banking/" target="_blank"><strong>Net-Zero Banking Alliance</strong></a> (NZBA).</p><p>Speaking in interest.co.nz's <a href="https://www.interest.co.nz/of-interest-podcasts" target="_blank"><i><strong>Of Interest podcast</strong></i></a> Rebekah Cain, BNZ's Chief Sustainability Officer, describes the NZBA as "a group of banks committed to transition the finance sector to net-zero." Finance, she notes, is "a key lever to pull in order to shift the real economy."</p><p>"Part of the reason for this is because if something is funded it happens. And if it isn't funded it doesn't happen," Cain says.</p><p>The industry-led, United Nations convened NZBA has 133 bank members from 43 countries holding a combined US$74 trillion in total assets, which is estimated to be 41% of global banking assets. BNZ's the only New Zealand member, although the Aussie parents of all NZ's big four banks are members, as is the Dutch parent of rural lender Rabobank NZ.</p><p><a href="https://www.interest.co.nz/sites/default/files/2023-08/BNZ-Net-Zeron%20Banking%20Alliance%20targets%20disclosure.pdf" target="_blank"><strong>BNZ's NZBA targets disclosure</strong></a>initially features2030 targets for the coal mining, dairy farming, power generation and oil and gas sectors. For dairy, which contributes 23% of NZ's annual export earnings and 22% of its annual gross emissions, the target assumptions include reducing dairy cow numbers, lowering milk production, and less use of nitrogen fertiliser.</p><p>For BNZ Cain acknowledges there's both derisking going on and lending growth opportunities being eyed. In terms of the latter, in the power generation sector BNZ's assuming a 50% increase in electricity demand between 2020 and 2050.</p><p>"I think the focus needs to switch from what's being taken away to the