Green finance and emissions tracking coming to Kiwibank

Screenshot of Cogo carbon emissions tracking app. Photo / supplied by Kiwibank and Cogo

Kiwibank will soon start offering businesses that need finance for "sustainability initiatives" loans at discounted rates.

It will from September 26 join other lenders in offering a sustainable business loan product.

Kiwibank's head of sustainable finance Tom Williams told the Herald interest rates on sustainable loans may be around 50 to 100 basis points lower than rates on regular business loans, however they'd vary based on a customer's circumstances – i.e. their credit score, the type of loan they're after, whether it's secured, and how long the business has been in operation for.

The sorts of investments that would qualify for green loans could include those aimed at improving energy efficiency, generating or storing renewable energy, electrifying equipment, decarbonising process heat, or using low-emission charging infrastructure.

Investments in electric or hydrogen vehicles, buildings with high New Zealand Green Building Council or Homestar ratings, and sustainable packaging, waste infrastructure and carbon capture or storage could also quality for sustainable finance, as could businesses with B Corp certification.

Kiwibank chief executive Steve Jurkovich said, "Sustainable finance shouldn't be reserved for big business alone. We will be the first Kiwi bank to offer an off-the-shelf sustainable loan option for all businesses no matter size or industry type…

"We will help them fund and realise their sustainability credentials to earn investor and customer trust."

Kiwibank said it was committed to delivering $100 million in sustainable finance in 2023, and $2 billion by 2030. Williams said the goal was for around 10 per cent of Kiwibank's new business lending to be green every year.

Kiwibank will from September also start offering some its business customers the opportunity to estimate their carbon emissions based on their spending histories.

It is partnering with a financial technology firm, Cogo, to provide this service – for free, initially as a pilot to around a quarter of its business customers.

Cogo assigns estimated carbon emissions to different transactions (i.e. spending on fuel or energy) to give businesses a snapshot of the impact they're having on the environment.

The idea is to enable businesses to use the information to reduce their carbon footprints. Cogo's web-based app provides businesses with suggestions and guidance on how to reduce their emissions and improve efficiency.

A good report card from Cogo could also help businesses secure lower-cost finance.

Speaking to the Herald last month, Cogo founder and chief executive Ben Gleisner said around two million individuals around the world already use Cogo to track their personal carbon emissions via mobile banking. Hence, Cogo has quite a lot of data to draw from to estimate emissions.

Cogo has partnered with several other banks around the world, including Westpac and CommBank (owner of ASB) in Australia, NatWest in the United Kingdom, and ING in the Netherlands.

Asked whether Kiwibank was looking at enabling its personal banking customers to use Cogo to track their carbon emissions, as individuals can do overseas, Williams said Kiwibank is still talking about what the future holds.

Gleisner maintained, "In 18 months, if you're a New Zealand tier-one bank without a carbon foot-printing product in your consumer app, you'll be seen as a real laggard."