Latest / Early Edition with Ryan Bridge / Claire Matthews: Massey University Banking Expert on NZ First's bill to stop banks withdrawing services on an environmental basis

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Claire Matthews: Massey University Banking Expert on NZ First's bill to stop banks withdrawing services on an environmental basis · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: New Zealand first want banks to lend to everyone, and
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  Speaker 1: they've introduced a bill to make that happen. Now, the
• 0:06
  Speaker 1: bill would stop banks and withdrawing their services for any
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  Speaker 1: reason other than a commercial basis. Withdrawal for so called
• 0:13
  Speaker 1: woke reasons such as environmental or social grounds would make
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  Speaker 1: banks liable of fines of up to half a million dollars.
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  Speaker 1: And this, of course follows concerns that banks won't lend
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  Speaker 1: to fossil fuel companies so that they can achieve a
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  Speaker 1: clean green image. So we have a banking expert with us.
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  Speaker 1: The Associate professor at Massi University Business School is Clare Matthews.
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  Speaker 1: Good morning to you, Claire, Good morning Ellen. What do
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  Speaker 1: you make of it?
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  Speaker 2: Well, given what's been said by Strange Jones and the
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  Speaker 2: recent pass, it's not surprising that they've chosen to do it,
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  Speaker 2: but I think it's fundamensonally under misunderstands why the banks
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  Speaker 2: are making the decisions that they are. The fundamentally, the
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  Speaker 2: decisions they make are a risk management decision and appear
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  Speaker 2: that under the legislation that they've introduced that would still
• 1:03
  Speaker 2: be possible. So it's unlikely to make the difference that
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  Speaker 2: they are looking for.
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  Speaker 1: Indeed, I mean, could the banks believe that damaging the
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  Speaker 1: environment is damaging the economy actually be a valid commercial
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  Speaker 1: reason for withdrawing their services.
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  Speaker 2: It could they, but it's actually more likely. The pure
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  Speaker 2: risk associated with lending to mining companies and similar companies
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  Speaker 2: is that there is a risk around whether these what
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  Speaker 2: the future of these businesses are, and whether lending to
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  Speaker 2: them is actually a good commercial decision, because there is
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  Speaker 2: a risk that it in the future that there's a
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  Speaker 2: different government that has different rules and therefore all of
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  Speaker 2: a sudden, these organizations become uncommercial and therefore there's a
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  Speaker 2: huge risk to the banks associated with that.
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  Speaker 1: Yes, well, I mean where do we draw the line
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  Speaker 1: between banks doing what they want and their social license
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  Speaker 1: Because let's be honest, our super funds already they're not
• 2:00
  Speaker 1: investing in defense companies, So this sort of thing is
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  Speaker 1: already happening.
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  Speaker 2: Absolutely, and the key we Saber companies are doing that
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  Speaker 2: because that's what the consumers have said they want. They
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  Speaker 2: want to be able to choose key we SAB funds
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  Speaker 2: that are investing in what's described as an ethical way.
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  Speaker 2: So people want to be able to choose their investments
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  Speaker 2: in a way that aligns with their ethical belief The
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  Speaker 2: reality is that we want to be able to do
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  Speaker 2: the same thing with our banks because we want to
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  Speaker 2: bank with a company that is aligned with our ethical
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  Speaker 2: beliefs as well. And as there's a company that is
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  Speaker 2: not lending to fossil fuel companies and that's what we
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  Speaker 2: want to see personally, then that's going to influence who
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  Speaker 2: we choose to bank with. And all of a sudden,
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  Speaker 2: it's removing that choice as the government is not going
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  Speaker 2: to allow banks to not do that.
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  Speaker 1: Well, wait to see what happens. Claire, thank you for
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  Speaker 1: getting up with it for us. That is Claire Matthews,
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  Speaker 1: the associate professor at the Massive University Business School. For
• 2:55
  Speaker 1: more from earlier edition with Ryan Bridge, listen live to
• 2:58
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• 3:01
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