Silver Fern Farms signs New Zealand’s largest contract linking working capital and sustainability goals
Provided
Silver Fern Farms chief executive Simon Limmer, pictured here launching the company’s carbon-free beef in New York, wants to create the most sustainable grass-fed red meat business in the world.
Silver Fern Farms, New Zealand’s largest meat processor and distributor, has signed the country’s largest contract linking working capital and sustainability goals.
The Dunedin-based company has signed a deal with a banking syndicate for $320 million in working capital that offers a lower interest rate in return for meeting sustainability targets.
Silver Fern Farms aims to be the most sustainable grass-fed red meat company in the world. Last month it received a huge grab from Prime Minister Jacinda Ardern touting its carbon-free beef in New York, and the launch of its new funding deal was opened in Wellington by Climate Change Minister James Shaw.
“Sustainability funding of this size is a significant milestone for Silver Fern Farms and underscores our commitment to responding to the rise of conscious consumers and creating new forms of value for farmers,” said Managing Director Simon Limmer. .
READ MORE:
* Silver Fern Farms posts record annual profit of $103.8 million
* Silver Fern Farms will join a handful of Kiwifruit companies offering carbon-free products
* Urgent action needed to limit the spread of carbon forestry and save sheep and cattle land, farmers say
“The targets associated with the facilities will hold us to account as we accelerate towards a nature-friendly business model that encourages low-emission, biodiverse and regenerative farming practices.”
Who provides the funding?
A syndicate of lenders, including ANZ, Bank of China, BNZ, Citibank and Rabobank. The transaction has been externally reviewed by EY and complies with the Principles for Sustainability Linked Lending (2022).
What are the benefits of Silver Fern Farms?
Silver Fern Farms chief financial officer Vicki McColl said the sustainability performance targets set out in the agreement give the company clarity on what it needs to invest in each year and clarify its responsibilities.
“Performing well against our targets saves us money, while underperformance costs us,” she said. “That means the incentives to operate more sustainably are very tangible from a business perspective.”
What are the targets?
As part of the agreement, Silver Fern Farms will receive financial incentives as it achieves pre-agreed and predefined sustainability goals, including:
- Full NZ Farm Assurance Program Plus adoption by Silver Fern Farms suppliers
- Reduced processing emissions in line with the Corporate Science Goals initiative of 42% reduction in Scope 1 and Scope 2 greenhouse gas emissions by 2030 from baseline 2020
- Reduction in total landfill waste, including organic waste, from treatment sites
- Reduction of water used in processing barns
- Improved environmental monitoring and reporting
