New Zealand Prime Minister Luxon Says Inquiry May Recall Banks Over Climate Policies

(Bloomberg) -- New Zealand Prime Minister Christopher Luxon said a parliament select committee inquiry may recall banks for further testimony to explain why they are limiting lending to some businesses due to climate concerns.

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The inquiry into banking competition heard from the chief executives of the largest lenders in the fourth quarter, at which some were grilled for their lending practices to farmers and other businesses that contribute to greenhouse gas emissions.

Last week, Resources Minister Shane Jones slammed banks who he said were de-banking mining companies because they were “in thrall to climate group-think.” He did not provide any examples.

“CEOs should be registering what we’re saying,” Luxon said on The Country radio show Wednesday in Wellington. “I’m giving them lots of good warning. There’s an ongoing select committee inquiry into the banking and frankly we’ll call them back” to explain, he said.

Banks have been under fire for their membership of the Net-Zero Banking Alliance, which requires members to align their policies with reducing global greenhouse emissions. That means lenders have scrutinized how farms and other businesses are acting to limit climate change as part of their customer relationships.

Bank of New Zealand for example told the inquiry it was reducing its exposure to some fuel outlets because the outlook for those businesses is becoming clouded as more drivers shift to electric vehicles.

“I just think if you want to serve New Zealanders and they’re your customers, they want a fair deal on banking,” Luxon said. “Our banks need to finance the enterprises that Kiwis actually need. When you’ve got banks not funding service stations in rural New Zealand, that is utterly unacceptable.”

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