Back in the 80s and 90s when I was in banking, the primary objective of every financial institution was to run a profitable business in order to provide a solid return to shareholders and, on the other side of the equation, support customers to be successful.
More than simply a focus on customer service, it acknowledged that successful customers are profitable, loyal customers.
Now, fresh from a public scolding at the Banking Royal Commission – which laid bare a litany of schemes, scams, and swindles – the banking sector appears to be taking on a ‘born again’ moral rectitude that defies good business sense.
Back in April, AgForce went into bat for legitimate businesses like feedlots, live exporters, and gunshops who were denied lending by the NAB because they were considered ‘socially sensitive’.
And last week – under no compulsion by shareholders or regulators and without any consultation with customers or industry – ANZ announced that they would introduce emissions targets as a condition of loans to certain customers.
Primarily agriculture, mining, and transport – all industries on which regional Queensland rely.
As well as being, somewhat ironically, further proof of their moral failure, it also demonstrates a complete lack of understanding of the industries concerned and the significant steps they have already made, voluntarily, towards carbon neutrality.
But let’s be honest – it’s not about ethics, it’s about optics.
It’s another example of a growing trend of ‘secondary boycott creep’ being exhibited by all the banks as they try to position themselves as good corporate citizens.
Tragically, it’s counterproductive. The significant improvements to farming practices made over decades by producers at their own expense don’t come cheap. They need to be funded. Because, in reality, the significant investment made by producers to ‘do the right thing’ far, far outweigh any financial benefit.
If ANZ, NAB and others really want to do the right thing by the planet, they should proactively work with industry to develop viable long-term solutions.
Simply imposing financial disincentives on farmers to farm so that they can pander to extreme social and environmental groups whose views are completely out of step with those of the Australian community is bad business for everyone.