31 Mar 2022
Growing towards net-zero
Shayne Elliott |
A new collaborative project in Western Australia’s Wheatbelt region will be positive for the environment and local businesses.
8 Aug 2022
New ways to help business in the transition to net zero
As headlines globally continue to focus on addressing the need for immediate action on climate change, consumers are becoming increasingly interested in the sustainability credentials of small-to-medium businesses (SMEs).
The most recent EY Future Consumer Index survey showed one in seven Australians believe brands have a responsibility to make a positive change in the world.
“Australian businesses need access to finance, services and advice to invest in equipment which will help them shift to low-carbon business models and operations.”
The research also highlighted 31 per cent of Australians viewed sustainability as very or extremely important when making a purchase decision.
Given this growing consumer focus, Australia’s SMEs must consider ways to improve their sustainability credentials right across the value chain.
This can also help to manage another growing issue for businesses, rising costs, which 57 per cent of Australian businesses experienced over the three months to April 2022, according to recent ABS data.
For example, The Energy Efficiency Council has estimated improving energy efficiency has the potential to save households and businesses up to $7.7 billion each year on their energy bills.
Pleasingly we’re seeing many of our customers move towards a more sustainable future. This can take many forms including electric trucks, solar panels or new sustainable plant and equipment.
Huge opportunity
Australian businesses need access to finance, services and advice to invest in equipment which will help them shift to low-carbon business models and operations.
At ANZ we see a huge opportunity in supporting our customers and helping them with the transition to net zero emissions by 2050. According to the International Energy Agency’s World Energy Outlook 2021, investment related to the transition to zero emissions will need to reach $US4 trillion annually by 2030 from around $US1 trillion now.
As part of ANZ’s support for the transition to net zero, the bank recently extended its $200 million funding program with the Clean Energy Finance Corporation.
Under the partnership, ANZ and the CEFC will each contribute 0.25 per cent toward a 0.5 per cent discount to eligible SME customers for loans up to $5 million to invest in eligible energy efficient related assets and projects.
One business that has taken the opportunity to invest in emission-reducing infrastructure is Hill Family Farm in northwest Tasmania. The farm is a pasture dairy operation with about 500 cows, according to manager Brodie Hill.
Sustainable upgrade
When Brodie’s parents bought the farm, they quickly realised the farm’s water infrastructure was dilapidated and in need of an upgrade.
“We saw an opportunity to invest in sustainable and time-efficient infrastructure,” Brodie says. “ANZ and the Clean Energy Finance Corporation were able to offer an energy saving discount on our finance.
“This underpins the sustainability of the farm with two pillars: environmentally sustainable and financially sustainable. The environmental piece is using fewer megalitres of water and using less energy to grow the same amount of grass. And the financial sustainability piece is, in turn, less expense to grow the same amount of grass.
“We’ve seen an immediate benefit to our bottom line. It’s good to see there are organisations like (ANZ and CEFC) that can help farmers like us on the ground. To help our business and improve our sustainability going forward.”
The scale of the challenge to make the transition to net zero for SMEs like Hill Family Farm is enormous. But so are the opportunities.
Isaac Rankin is managing director of commercial and private banking at ANZ.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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