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Assurance opinion.
ANZ 2023 Climate-related Financial Disclosures 9
The ERBC is accountable to the Board EESG Committee in the effective discharge of its responsibilities. It operationalises Board objectives and makes decisions on issues and policies.
The ERBC meets at least four times annually, meeting five times in 2023.
Climate Advisory Forum.
Our Climate Advisory Forum (CAF), chaired by our Group Executive Institutional, includes our Group Chief Risk Officer, Group General Manager ESG and other executives.
The CAF oversees implementation of ANZ’s Climate Change Commitment – ensuring coordination between the various workstreams including our Environmental Sustainability (ES) Strategy and our sectoral pathways.
The CAF meets approximately monthly with the agenda structured to cover ES focus areas on a regular and timely basis. ES focus areas for the forum were established in October 2022. Some of the key ES focus areas discussed with the forum this year included: capturing and managing ES-related data, rolling out ES educatio...
Other management committees.
Other management committees play a role in the management of risks, including risks which are climate-related, such as the following: • Operational Risk Executive Committee (OREC) is the primary senior executive management forum responsible for overseeing Operational Risk and Compliance Risk, risk profile, and the rela...
OREC and CMRC have responsibility for the overview of ANZ’s management of new and emerging risks within their respective risk areas, which may include risks that are climate-related. This year, OREC and CMRC met eight and ten times respectively.
Activities undertaken by the ERBC will at times overlap, and inform, topics raised in OREC and CMRC as part of the executive oversight and risk management required to deliver on ANZ’s purpose and strategy.
Stakeholder engagement.
We run a regular program of CEO and Senior Executive meetings with civil society leaders including environmental non-governmental organisations, regulators and academics.
Further, our Group Chief Risk Officer and Group General Manager ESG visited Europe and the United Kingdom and met with around 20 financial institutions, regulators, corporate customers, and the Chair of the Taskforce for Nature-Related Financial Disclosures (TNFD) to obtain global insights into climate and biodiversity...
Areas of focus by the Board EESG Committee and management ERBC.
Both Committees discuss the areas of ‘how we bank’ and ‘who we bank’. Environmental Sustainability is one of ANZ’s three ESG focus areas that is fundamental to our business and strategy. Climate is a standing item on both the Board EESG Committee and ERBC's agenda.
The climate paper is usually presented to the Committees by the Group Chief Risk Officer, Group Executive Institutional and Group General Manager ESG.
Based on allocated agenda time, this year these Committees jointly dedicated approximately 25 per cent of their time to climate-related topics. This included reviewing and approving our approach to climate-related objectives and targets.
This year the Committees have considered topics such as biodiversity, ANZ’s carbon offsetting strategy and ANZ’s customer engagement program with our largest emitting business customers, including receiving briefings from internal and external subject matter experts. These briefings and meetings provide opportunities t...
Overview.
Governance.
Board and executive oversight.
Board and Board committees.
Management committees.
Enhanced due diligence.
Executive remuneration.
Strategy.
Risk Management.
Metrics and Targets.
Appendix.
Assurance opinion.
ANZ 2023 Climate-related Financial Disclosures 10
Climate-related sectoral pathways and ESG targets.
Climate-related targets, within our suite of ESG targets (disclosed on pages 81-84, with the full ESG target suite available in our ESG Supplement at anz.com/esgreport), are developed under the guidance of the CAF, informed by the ESG Governance and ESG Analytics and Advisory teams in close consultation with relevant b...
Our sectoral pathways (disclosed on pages 49-77) are developed by our ESG Analytics and Advisory team, working closely with the relevant business units and risk teams.
Proposed targets are reviewed by the Board EESG Committee and the ERBC and are ultimately approved by the Board EESG Committee. Progress of the ESG targets is monitored twice a year by the Board EESG Committee and quarterly by the ERBC, and an annual review is conducted to ensure targets remain relevant.
Our sectoral pathways are reviewed annually, in alignment with the frequency with which data (for example emissions data) is reported by our customers.
Biodiversity.
Biodiversity has been considered by the Board EESG Committee and management ERBC as part of their responsibility to provide leadership to advance ANZ’s purpose, involving consideration of certain social and environmental impacts. Recognising a need to build our understanding of, and capability in, emerging risks and op...
This year we have sought to draw on the TNFD framework in our disclosures. Refer to pages 25-29 for steps we are taking.
Enhanced due diligence for energy sector customers (including oil and gas)
We continue to apply an enhanced due diligence and decision-making process for relevant customers and transactions in the energy sector, including oil and gas companies.
Material energy transactions (material transactions) undergo additional screening. Material transactions in this context include those likely to have a significant impact on the size or carbon intensity of our energy sector portfolio or represent heightened reputational risk.
Material transactions are referred to senior subject matter experts for review having regard to ANZ’s Climate Change Commitment prior to proceeding. In this respect, the process involves an evaluation of customer transition plans using the criteria we apply in our engagement with our largest emitting business customers...
Where a customer or transaction does not meet our expectations (including those set out in our Climate Change Commitment), then we may decline lending.
In some instances, for example, where our initial assessment indicates the customer's transition plans are not yet well developed or if there are heightened reputation risks, senior subject matter experts escalate these transactions to three of our senior executives for decision on whether ANZ will support them. These ...
As part of this process our ethical decision-making principles are applied, including considering if the transaction will advance ANZ’s strategic and commercial interests.
In 2023, 22 transactions were escalated to the senior executives with three declined and 19 approved or conditionally approved.
The rationale for each decision relating to the escalated transactions is provided to the ERBC for oversight and information.
Refer to page 39 for further details on other polices and tools in place relevant to considering ANZ’s approach to doing business, having regard to ANZ’s Climate Change Commitment.
Executive remuneration.
ANZ’s Remuneration Report within our Annual Report, available at anz.com/annualreport, details how remuneration outcomes are determined for our most senior employees. In general, remuneration outcomes for the CEO and Disclosed Executives take into consideration performance against ANZ’s Group Performance Framework – wh...
Individual/Divisional performance scorecards also include sustainability measures as relevant to the particular business. It is important to note that Group/Division performance objectives are not designed to capture all of our ESG targets – however our senior leaders are accountable for ensuring we focus and achieve A...
Overview.
Governance.
Board and executive oversight.
Board and Board committees.
Management committees.
Enhanced due diligence.
Executive remuneration.
Strategy.
Risk Management.
Metrics and Targets.
Appendix.
Assurance opinion.
ANZ 2023 Climate-related Financial Disclosures 11
STRATEGY.
Through our purpose we have elevated three areas facing significant societal challenges aligned with our strategy and our reach:
Improving the financial wellbeing of our people, customers and communities by helping them make the most of their money throughout their lives;
Supporting household, business and financial practices that improve environmental sustainability; and.
Improving the availability of suitable and affordable housing options for all Australians and New Zealanders.
Integrating our ESG approach into our strategy has created an opportunity for us to better serve our customers and generate long-term shareholder value.
This report describes our progress towards implementing our Climate Change Commitment and Environmental Sustainability Strategy.
Our purpose.
Our strategy.
Who we serve.
We will achieve our strategy through.
ESG focus areas.
TO SHAPE A WORLD WHERE PEOPLE AND COMMUNITIES THRIVE.
To improve the financial wellbeing and sustainability of customers.
Help people save for, buy and own a sustainable, liveable and affordable home.
Financial wellbeing.
Environmental sustainability Housing Customer experience.
Information security.
Ethics, conduct and culture.
Help people start or buy and sustainably grow their business.
Help companies move capital and goods around the region and sustainably grow their business.
Propositions our customers love… with easy-to-use services that evolve to meet their changing needs.
Flexible and resilient banking platforms… powering our customers and made available for others to power the industry.
Partnerships that unlock new value… with ecosystems that help customers further improve their financial wellbeing and sustainability.
Purpose and values-led people… who drive value by caring about our customers and the outcomes we create.
Our purpose is to shape a world where people and communities thrive. It explains ‘why’ we exist and drives everything we do at ANZ, including the choices we make each day about those we serve and how we operate.
We bring our purpose to life through our strategy; to improve the financial wellbeing and sustainability of customers through excellent services, tools and insights that engage and retain them, and help positively change their behaviour.