Commonwealth Bank (CBA) has announced a new loan product aimed at farmers who are willing to invest in environmental projects.
The bank had tested a pilot program for their Agri Green Loan but will now go full steam ahead with the product, announcing a national rollout on Tuesday.
The loan product aims to give more farmers access to funding if they can demonstrate they are able to reduce emissions, make properties more resilient to climate variability, and enhance natural capital.
CBA group executive of business banking Mike Vacy-Lyle said agriculture is a core sector and that it was integral to help transition to an environmentally friendly industry.
"The drive towards greater sustainability is creating more opportunities for agribusinesses," Mr 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."
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The National Australia Bank are still piloting their Agri Green Loan with select customers.
The CBA announcement comes off the back of a new partnership announced between Rabobank and salmon farming and seafood company Tassal Group.
Rabobank will act as a joint sustainability coordinator on a $497 million sustainability-linked loan (SLL) facility, which will link some interest charges to sustainability targets which is a first for any aquaculture company in Australia.
Rabobank Australia & New Zealand head of wholesale banking Lizette Sint said Rabobank had experience with companies based overseas in providing sustainable finance to the aquaculture sector.
"As part of our extensive global experience in the sustainable finance market, Rabobank has been involved in providing a range of sustainability-linked loans to aquaculture companies, in countries including Chile and Norway, but this is our first in the aquaculture sector in this part of the world," she said.
The SLL will provide accountability and external validation options to make sure Tassal's sustainability targets are being met.
Tassal Group managing director and chief executive Mark Ryan said the SLL boosted the company's responsible business strategy.
"While Tassal has been committed to sustainability for many years, this is still a significant step for Tassal and a first for aquaculture in Australia," he said.
"Integrating our sustainability performance with our financing framework is an important step in our responsible business strategy, accelerating our work towards our ambitious sustainability targets."