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ESG_Report

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Governance.
Strategy.
Our purpose and strategy.
Our climate ambition.
Supporting our customers to transition.
Financing sustainability $100b target performance.
Building capability.
Customer engagement.
Biodiversity.
Partnerships and initiatives.
Reducing our environmental footprint.
Risk Management.
Metrics and Targets.
Appendix.
Assurance opinion.
ANZ 2023 Climate-related Financial Disclosures 20
BUILDING CAPABILITY.
Mindset 2030.
We are putting programs in place to allow our employees to build their capabilities.
Launched in 2021, Mindset 2030 is offered as an optional program which provides employees access to a pathway and a central hub with learning opportunities. Its initial focus was on providing information on our Environmental Sustainability Strategy and ways in which we are helping our customers to shift to low carbon b...
In 2023 we re-designed and updated the learning program to: ‘ESG@ANZ – Mindset 2030’ to cover broader ESG topics. The updated program comprises 10 learning modules, with seven released this year. More than 4,300 people have commenced the learning program, with more than 8,800 modules completed.
HIGHLIGHT.
ESG@ANZ Mindset 2030 modules released this year: • ANZ’s Purpose, Strategy and Approach to ESG • The ‘E’ in ESG – What Environmental Sustainability means at ANZ • The ‘S’ in ESG – What Social means at ANZ • The ‘G’ in ESG – What Governance means at ANZ • Greenwashing • ESG Governance and Risk Management • Community and...
In addition to the formal learning program, 25 speaker events have been held throughout 2023, focusing on topics such as biodiversity, carbon markets and climate.
We also provide other opportunities for staff to learn about ESG issues. Our ESG@ANZ Mindset 2030 insights hub provides information on ANZ’s ESG approach, webinars, and links to our strategy and external resources. As part of ESG@ANZ, an ESG Executive Leadership Series is planned for early 2024 for our Executive Leader...
Supporting our bankers.
We are also seeking to equip certain of our employees with a deeper understanding of climate-related risks and opportunities, focusing on our bankers in key priority sectors such as resources, energy and those who support our large agribusiness customers.
This year: • We continued to seek to equip relevant staff with the skills and knowledge to undertake assessments of 100 of our largest emitting business customers' transition plans. The training outlines example case studies and provides guidance on how we engage with customers. See page 22 for further details on our e...
• We continued to educate relevant employees about our Social and Environmental Risk Policy (‘the Policy’) and accompanying Requirements for ‘sensitive sectors’. Educating relevant employees on our policies and standards and how they are applied in practice is important for the effective management of the social and en...
• Training sessions have been provided to bankers required to complete the newly digitised Climate Change Risk Assessment (CCRA). Training our bankers on the CCRA tool is critical to embedding it and driving effective customer engagement and analysis. Refer to page 39 for more information on our CCRA tool.
• Our Commercial agribusiness team developed a training module in conjunction with the Carbon Market Institute on carbon farming in Australia – which seeks to increase the understanding and awareness of the risks and opportunities involved with on-farm carbon projects. This training is available to all ANZ staff.
• We began building the capability of our Institutional frontline staff on nature including biodiversity which we consider critical to supporting their engagement with customers on managing biodiversity risks and opportunities. See page 27 for further details on how we are building the capabilities of our bankers on bi...
1. Transactions involving our Institutional and Corporate customers.
Overview.
Governance.
Strategy.
Our purpose and strategy.
Our climate ambition.
Supporting our customers to transition.
Financing sustainability $100b target performance.
Building capability.
Customer engagement.
Biodiversity.
Partnerships and initiatives.
Reducing our environmental footprint.
Risk Management.
Metrics and Targets.
Appendix.
Assurance opinion.
ANZ 2023 Climate-related Financial Disclosures 21
ENGAGING WITH OUR LARGEST EMITTING BUSINESS CUSTOMERS.
Customer engagement.
We will begin a new phase of engagement with our largest emitting business customers in 2024. Triggered in part by the Safeguard Mechanism1 reforms in Australia (SGM), this new phase means upgrading and expanding the scope of our existing work through a new Large Emitters Engagement Program (LEEP). LEEP will see us: • ...
• Upgrading our assessment of progress by applying a more challenging framework.
• Extending the use of our Climate Change Risk Assessment (CCRA) methodology to guide our bankers and assist their discussions with customers, so that by the end of 2024, it has been used to support our engagement with the 100 largest emitting business customers cohort.
Our engagement is focused on exploring ways in which our customers can improve their transition plans, which may be facilitated by our financing solutions, including via our $100 billion social and environmental sustainability target discussed on page 20.
Setting higher standards for our customers’ plans.
We are setting higher standards for our customers’ plans, by applying a more challenging assessment framework. Our upgraded framework includes: • increased focus on our customers’ progress delivering their transition plan targets, including whether customers are ‘on track’ (or ‘almost on track’)3 with their emissions t...
We continue to seek TCFD aligned disclosures from these customers.
See page 24 for more detail about our upgraded customer transition plan assessment framework.
Expanding our engagement over time.
In 2025, we intend to capture in our engagement program the remaining large emitters in sectors for which we have pathways (listed on page 43), focusing on the most material exposures4 and any remaining material corporate exposures 4 in higher emitting sectors such as large agribusiness, or chemical manufacturers.
We anticipate that by the end of 2025 we will have undertaken enhanced customer engagement with customers responsible for around 60% of our estimated Institutional credit customer portfolio emissions.5.
Continuing to manage our exposures to customers with less developed plans.
We will also continue to seek improved plans from ‘Category C’ and 'Category D’ customers by the end of 2025 or we will likely reduce our exposure to them. Any customers rated 'C' or 'D' in 2024 that are included for the first time as part of our new phase of engagement will need to improve their plans by the end of 20...
Upgraded climate risk tool.
We are also extending the use of our upgraded CCRA tool to a wider customer cohort as shown in the diagram below. The CCRA includes an assessment of our customers' exposure to potential physical risks and transition risks and the maturity of the customer in developing a transition plan. It also assists us in understand...
1. The Safeguard Mechanism. In Australia, the Federal Government has reformed the Safeguard Mechanism legislation so that for financial years commencing on or after 1 July 2023, designated “Safeguard facilities” (large carbon emitters) are required to reduce their emissions on a trajectory consistent with Australia’s c...
FY24 FY25.
Our 100 largest emitting business customers.
Safeguard Mechanism7.
Other large emitters9.
Large emitters in sectoral pathways8.
FY23 100 of our largest emitters.
CCRA SCOPE 6.
Overview.
Governance.
Strategy.
Our purpose and strategy.
Our climate ambition.
Supporting our customers to transition.
Financing sustainability $100b target performance.
Building capability.
Customer engagement.
Biodiversity.
Partnerships and initiatives.
Reducing our environmental footprint.
Risk Management.
Metrics and Targets.
Appendix.
Assurance opinion.
ANZ 2023 Climate-related Financial Disclosures 22
Our progress with 100 of our largest emitting business customers under our previous phase of engagement (2018 to 2023)
In 2021 we set a target to engage with 100 of our largest emitting business customers, to encourage them to strengthen their low carbon transition plans and enhance their efforts to protect biodiversity by the end of 2024. While we are now ‘closing off’ this phase of engagement, in 2023 we continued to group transition...