Leaders of a dozen state ag agencies are concerned about the role of some of America’s largest lenders in a United Nations coalition that aims to reduce the carbon footprint of loan portfolios around the world.
In a letter, the officials tell six U.S.-based banks they worry the Net-Zero Banking Alliance could have “a catastrophic impact on our farmers” and ask how they plan to meet the commitments.
“Implementing these commitments would have severe consequences for American farmers — including cutting America’s beef and livestock consumption in half, switching to inefficient electric farm equipment, and moving away from the nitrogen fertilizer necessary for American agriculture to thrive,” the letter says.
Originally launched in April 2021, the NZBA currently boasts the participation of 142 banks in 44 countries.
According to the United Nations, its participating members account for 41% of global banking assets. To join the NZBA, CEOs sign a three-page commitment statement outlining how the bank will align its business strategy with the UN’s Sustainable Development Goals, the 2015 Paris Climate Agreement and other “relevant national and regional frameworks.”
Will Hild, Consumers' ResearchSpecifically, the NZBA commitments include a pledge to “transition all operational and attributable GHG emissions from our lending and investment portfolios to align with pathways to net-zero by midcentury, or sooner.” Progress toward that and other NZBA goals is to be published annually by the banks and shared with the United Nations.
Will Hild, executive director of the advocacy group Consumers' Research, which targets "woke" corporate policies, argued membership in the NZBA is “basically an open conspiracy against the agriculture industry.”
“We need to know what this looks like in the real world, and then try and understand the effects that could have on the health and the output of the agriculture industry in each of these respective states,” he told Agri-Pulse.
The leaders ask several specific questions of the banks, including an explanation for “if and how you plan to achieve net zero in your agriculture lending portfolio,” whether or not emissions are considered in lending decisions for agriculture, and the role of U.N. entities in the crafting and review of the banks’ targets and progress toward achieving them.
It’s easy to be “in the know” about what’s happening in Washington, D.C. Sign up for a FREE month of Agri-Pulse news! Simply click here.
The letter was signed by Alabama’s Rick Pate, Florida’s Wilton Simpson, Georgia’s Tyler Harper, Iowa’s Mike Naig, Kentucky’s Jonathan Shell, Louisiana’s Mike Strain, Mississippi’s Andy Gipson, North Carolina’s Steve Troxler, North Dakota’s Doug Goehring, South Carolina’s Hugh Weathers, Sid Miller of Texas, and West Virginia’s Kent Leonhardt.
The letter was addressed to the top executives of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo.
When reached by Agri-Pulse for comment, four of those banks — Bank of America, Citigroup, Goldman Sachs and Morgan Stanley — and the American Bankers Association declined to comment. Neither Wells Fargo nor JP Morgan Chase responded to a request for comment.
Hild said the impact of the NZBA commitments could go beyond the lending portfolios of these major lenders, because many smaller banks often sell loan packages on the open market. Should larger lenders opt not to participate in that business in line with NZBA pledges, smaller banks that have not signed the pledge could be affected, he said.
U.S. agriculture interests are also taking net-zero actions. The dairy sector has pledged to be net zero by 2050 and the Biden administration has funded more than $3 billion in pilot projects through the Partnerships for Climate-Smart Commodities program — many of which would include the marketing of carbon credits earned through sequestration practices.
Hild argues those goals are “wildly different than the banking industry forming — effectively — a cartel and saying, ‘If you don't follow these net zero targets, we're going to cut you off from financing.”
The ag leaders request responses to their inquiries by Feb. 16.
For more news, go to Agri-Pulse.com.
