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7.73k
Large Institutional Agribusiness Customers.
Total lending portfolio.
Appendix.
Assurance opinion.
ANZ 2023 Climate-related Financial Disclosures 54
10.0 8.0 9.0 4.0 5.0 3.0 6.0 7.0 2.0 1.0 0.
IEA Net Zero Emissions 2050 Pathway (2021) 2030 Target Pathway (-100%) Actual Performance Against our Target.
ANZ vs. pathway -94% 2050 2022 2024 2026 2028 2032 2034 2036 2038 2030 2042 2044 2046 2048 2040 2020 2021 2023 2025 2027 2029 2033 2035 2037 2039 2031 2043 2045 2047 2049 2041.
Absolute Emissions (MtCO2-e)
Graph 3.1: Thermal Coal.
Thermal Coal Metrics Summary.
Metric 2020 2023.
Absolute financed emissions Mt CO2-e 9.10 0.39.
Physical intensity kgCO2e/t produced 41.09 3.18.
Portfolio-wide Intensity kgCO2-e/$ lent 20.99 4.65.
Data Quality Score1 • Scope 1 & 2 • Scope 3 • 2.25 • 3.00 • 1.83 • 3.00.
Current EAD $bn (% of Group EAD) 0.08 (0.01%)
The key design choices we used to calculate our absolute financed emissions reduction target for our thermal coal financing activities are summarised in Table 3 below.
Table 3.1 – Key design choices in calculating 2030 thermal coal financed emissions target 2030 Target • 100% reduction in absolute financed emissions from 2020 baseline.
ANZ Customers Included • Australian and New Zealand Standard Industrial Classification (ANZSIC)2 code 1102, i.e. those customers for whom thermal coal mining is their predominant activity3 • Customers above are included where ANZ’s exposure is at least $1 million.
Emissions Included • Scope 1, 2 and 3 (category 11, product use) for all companies included in scope4.
Metric • Absolute emissions (in million tonnes CO₂-e) (Mt CO₂-e)
Financing Activities Included • Exposure at default. This represents the Group's exposure to each sector based on APRA’s calculation formula which includes total committed loans (drawn plus a proportion of off-balance sheet exposures as specified by APRA • Rehabilitation bonds and transaction banking are not included4....
Attribution Approach • ANZ financing to customers as a proportion of customer value.
• Customer values are based on the following definitions: – Private company: Book value of debt and equity – Public company: Enterprise value including cash (EVIC)
Benchmarking Scenario • International Energy Agency (IEA) Net Zero Emissions by 2050 World Scenario (2021)
Key External Data Sources • Customer disclosures • Wood Mackenzie • AME • International Energy Agency • 2006 IPCC Guidelines for National Greenhouse Gas Inventories 1. The data quality score was calculated in accordance with guidance made available by the Partnership for Carbon Accounting Financials (PCAF) in The Globa...
Thermal Coal.
The information in this section should be read together with our disclaimer and important notices available here and our Financed Emissions Methodology available here.
Overview.
Governance.
Strategy.
Risk Management.
Metrics and Targets.
Sectoral metrics and targets.
Sector exposures.
Our approach to sectoral pathways.
Pathways performance dashboard.
Energy sector.
Transport sector.
Manufacturing sector.
Buildings sector.
Large Institutional Agribusiness Customers.
Total lending portfolio.
Appendix.
Assurance opinion.
ANZ 2023 Climate-related Financial Disclosures 55
Performance against target.
Financed scope 1, 2 and 3 emissions included in this pathway have declined by 96% over the last three years. Since 2015, we have reduced lending provided directly to thermal coal mining by around 85% – it is now around 0.02% of our Group EAD.1 Our active portfolio management in line with our Extractives Industry Policy...
Target considerations.
The NZBA ‘Guidelines for Climate Target Setting for Banks’ states that any client with more than 5% of their revenues coming directly from thermal coal mining shall be included in the scope of targets and specifies that metallurgical coal is considered within the value chain of the iron and steel sector.2 ANZ’s thermal...
Analysis of this 5% revenue threshold found that diversified miners and metallurgical coal miners that produce thermal coal as a by-product, would fall in and out of the target boundary on any given year in line with commodity prices. This creates challenges in both reporting and setting a target for these customers at...
Given our active portfolio management in line with our Extractives Industry Policy outlined in our Climate Change Commitment, our thermal coal exposures are now primarily within our metallurgical coal miners that produce thermal coal as a byproduct and diversified mining customers’ portfolio’s (through corporate lendin...
Table 3.2 – 2023 Total thermal coal financed emissions by customer type (MT CO₂-e)
Customer Category 2023 Thermal Coal Target.
Mining companies whose predominant activity is thermal coal production (ANZSIC code 1102) 0.39 Included.
Metallurgical coal miners that produce thermal coal byproduct* 1.44 Not included.
Diversified miners that produce thermal coal* 1.44 Not included * Contributing 5% revenue or more.
Actions to achieve 2030 target.
Our lending provided directly to thermal coal is expected to continue to decline. In line with our policy measures on thermal coal outlined in our Climate Change Commitment and Extractive Industries Policy, our approach means that we will no longer onboard any new business customers with material thermal coal exposures...
In 2022, we implemented an enhanced due diligence process for energy sector customers. Under that process, new customers and transactions considered material under the screening criteria are referred to senior subject matter experts to review having regard to ANZ’s Climate Change Commitment prior to proceeding. For fur...
Opportunities for emissions reduction and challenges.
Scope 3 emissions derived from combustion of thermal coal typically accounts for more than 95% of emissions of the sector.
ANZ accounts for Scope 3 emissions included in our pathway using our customers’ equity-based production6 of thermal coal made available for sale in thermal coal mines. While this accounting approach helps to minimise the risk of double counting of emissions, we would note that some double counting of scope 3 emissions ...
Our choice of an absolute emissions target recognises that there are limited opportunities to fully reduce the carbon intensity of fossil fuel products in all 1.5°C aligned scenarios.
Efforts can be made to reduce scope 1 and 2 emissions of coal mining for example through: reducing coal mine methane emissions; use of biofuels and electric powered alternatives to replace diesel use in mining equipment; and renewable energy investments.
1. This exposure is to the ANZSIC code 1102, i.e. those customers for whom thermal coal mining is their predominant activity. It does not include other thermal coal mining exposure to diversified miners or metallurgical coal miners that produce thermal coal as a by-product (i.e. customers who are not classified as ANZS...
THERMAL COAL (CONTINUED)
Overview.
Governance.
Strategy.
Risk Management.
Metrics and Targets.
Sectoral metrics and targets.
Sector exposures.
Our approach to sectoral pathways.
Pathways performance dashboard.
Energy sector.
Transport sector.
Manufacturing sector.
Buildings sector.
Large Institutional Agribusiness Customers.
Total lending portfolio.
Appendix.
Assurance opinion.
ANZ 2023 Climate-related Financial Disclosures 56
0 2030 Target Pathway (-28%)
EU emissions standard IEA Net Zero Emissions 2050 Pathway (2021)
Actual Performance Against our Target 2022 2024 2025 2027 2023 2026 2028 2029 2030 2031 2033 2035 2032 2036 2037 2038 2039 2040 2041 2042 2043 2034 2046 2047 2048 2049 2050 2044 2045.
Emissions Intensity (gCO2-e/vkm) 160 100 140 120 60 80 40 20.
ANZ vs. pathway -5%
Graph 4a.1 – Auto manufacturing Graph 4a.2 – Automotive Powertrain Financing Mix.
Auto manufacturing Metrics Summary.
Metric 2022 2023.