The comments come following Federated Farmers calls to the government to abandon its proposed framework for ‘green’ finance, saying it is ideologically driven, unworkable, and risks harming rural communities.

The Centre for Sustainable Finance is partnering with the government to create a Sustainable Finance Taxonomy to provide a consistent framework for defining what is ‘green’ or ‘sustainable’ in financial markets. Consultation on the framework closed earlier this week.

Federated Farmers said the initiative is a “total governance failure”.

“There are no hands-on farmers involved with the Technical Advisory Group. Instead, it’s full of shiny-shoed bankers, sustainability advisors, and forestry lobbyists,” they said.

Alan Renwick, professor of agricultural economics at Lincoln University, questioned Federated Farmers' framing of the taxonomy as a risk to the agriculture sector in terms of rural lending being cut off.

“I would put it another way – if we do not have a workable taxonomy there is a risk that the rural sector will not have access to a potential rich source of alternative funding. This will be to the long-term detriment to the sector and harm the transition to a more climate resilient sector.

“If the sector does not transition, there are far greater risks ranging from potential loss of key market access to the impacts of climate change,” he said.

Renwick said that, while there is genuine concern from within the farm sector about challenges in accessing capital, calling to scrapping the taxonomy is not the way to address these challenges.

“It risks New Zealand being left behind globally in the transition to more sustainable systems,” he said.

Renwick said we need to go back to the purpose of the taxonomy.

“Bell Gully sums it up as ‘the purpose of the NZ Taxonomy is to reduce uncertainty and complexity in assessing the sustainability credentials of investments in order to support the flow of private capital towards businesses actively transitioning to a low-emissions, climate-resilient economy’.

“[Lincoln University's May 2025 The Future Use of Land and How to Fund it] report highlights the absolute need for the transition and the key role for finance (including green finance – domestically and from overseas) to support the transition and also to help improve profitability of the sector, through diversification etc.”

He said for finance to flow in this way, the gains have to be ‘measurable reportable and verifiable’ and this is one of the big challenges which the taxonomy can help with.

“If we wish to attract ‘green’ capital into the sector we need to be in a position where the potential gains of investing here can be compared with other countries and these are wider than just return on capital. Investors also need to be able to make informed decisions about the risks associated with their investment.”

Farmers’ 25-year free ride?

Peter Fraser, agricultural economist, Ropere Consulting, said the call to stop the sustainable finance taxonomy was yet another example of the farming sector throwing its powerful weight around to lobby in its own economic self-interest.

He said that 'big ag' is New Zealand's answer to the National Rifle Association in the US in terms of lobbying.

“You can’t have a conversation in America about guns, in Australia about coal, or in New Zealand about cows. This is how the real politics works in New Zealand," he said.

"Five million cattle are more important than five million people.”

Fraser said the sector's absence from the Emissions Trading Scheme has given farming organisations a 25-year advantage in avoiding emissions charges.

He said it’s inevitable that the farming sector comes into the ETS. Agriculture is the only major polluting sector not covered by the scheme, despite contributing more than half of New Zealand's greenhouse gas emissions. 

“Farming organisations have essentially had a 25 year free-ride so far.”

He said New Zealand needs corrective taxes and corrective subsidies so there are incentives for good practices over bad practices.

“Big old polluting smokestack industries are just not acceptable any more. But farmers seem to think that because they have green pasture, somehow they’re different. But one cow uses the same amount of water as 14 people. It’s the same amount [of sewage] as three Tokyos but without a sewage system.” 

He also argued that claims New Zealand farmers are the most carbon efficient in the world or the most sustainable just aren't true. “We’ve just got the whingiest farmers in the world outside of the French.

“Their whole business model is based on socialising their costs and privatising their gains. It’s basically a bunch of farmers still wanting to have their special privileges. It wouldn’t be this way for any other sector. Farmers are super-citizens in New Zealand. But the whole dairy industry is only 3% of GDP.

“Farmers have gotten a free ride for coming up 30 years. But our markets are heading in a different direction. Farmers overseas are doing it, there’s no reason why we can’t.

“If farmers’ business model requires effectively a subsidy from the rest of society, that’s a terrible business model. They should be going broke.

"Farmers don’t want to see any environmental costs, be it water or carbon, because it would reduce their land values. This is how it’s been for the last 20 years. It’s nothing more than blatant self-interest."

'Bananas' – Greenpeace

Greenpeace spokesperson Amanda Larsson said Federated Farmers calling sustainable finance ‘ideological’ is “quite frankly bananas”.

“The climate crisis is here, and the farming sector is on the frontlines of it. That’s simply a fact. Several farms were under water last week after the Nelson-Tasman floods.

“Intensive dairying is the most polluting industry in the country but Federated Farmers want us to accept that they don’t have to pull their weight like everybody else.

“What’s worse, they want to keep reaping the economic rewards of being seen to be acting on climate change – like remaining in the Paris Agreement – but be exempt from actually contributing to cutting emissions.”

She criticised the level of influence Federated Farmers appears to have over the government.

“Federated Farmers have grown accustomed to telling this Government what they want and expecting immediate action. Whether it’s rolling back protections for rivers, lakes and drinking water or coming after banks that are trying to invest responsibly.

“It is deeply concerning that the lobbying group for the most climate-polluting sector in New Zealand has this much influence over Government policy.”

UK abandons sustainable finance taxonomy

Meanwhile, the UK government has announced it will not create its own framework for sustainable investments, abandoning years of work to focus on other green policies. British officials had not found sufficient evidence that a so-called taxonomy would help stop greenwashing and channel investments to more sustainable economic activities, the government said in a consultation document published on Tuesday. Instead, the UK said it would focus on sustainability reporting standards and corporate transition plans.

Bloomberg reports that such taxonomies, which classify what a government deems to be 'green', have spread across the globe, but have faced pushback from companies and investors due to their complexity.