New Zealand investigates banks' climate group for cartel breaches

New Zealand's competition regulator is looking into whether banks are breaking anti-cartel laws through their membership in the Net-Zero Banking Alliance. This group sets climate goals for banks globally. The Commerce Commission announced the investigation after concerns were raised about the impact of the banks' climate commitments. Federated Farmers, an organization that supports rural communities, filed a complaint in December. They argued that strategies for achieving net-zero emissions could lead to behavior similar to a cartel, restricting competition. Prime Minister Christopher Luxon has asked bank leaders to clarify their lending practices, especially towards fuel retailers. Some banks, like Macquarie Group from Australia and several major Japanese lenders, have already left the alliance, which is now assessing its policies. The commission is collecting information to see if these net-zero strategies violate competition laws. It has not provided a timeline for the inquiry's completion. New Zealand was among the first developed nations to set a legally binding net-zero target. However, since Luxon’s government took over in late 2023, there have been notable policy changes. The complaint mentioned banks like Bank of New Zealand, ANZ Group, and Westpac, all members of the alliance. ANZ expressed its commitment to helping customers deal with climate risks. Westpac encourages emission reductions but does not force clients to comply. Bank of New Zealand's CEO stated that exiting the Net-Zero Banking Alliance would not alter their climate responsibilities, as they still must report on their climate actions.