Board Risk Committee oversees management of climate-related risks
Board Ethics, Environment, Social and Governance Committee approves climate-related objectives, goals and targets
Ethics and Responsible Business Committee (executive management) oversees our approach to sustainability and reviews climate-related risks
Focus areas – 2020/21
Align with regulatory guidance on climate-related risk governance, including stress testing of selected portfolios
Beyond 2020 vision
An enhanced risk management framework that is responsive
to climate change, and meets financial regulators’ requirements
Our progress to date
Strategy
ANZ’s Climate Change Statement (available on anz.com) reaffirms support for the Paris Agreement goals and
transition to a net-zero carbon economy
Managing the net-zero carbon transition focuses on an orderly and just transition that gives careful consideration to the impacts on communities
Participation in a United Nations Environment Program Finance Industry (UNEP FI) working group on TCFD scenario analysis that issued recommendations and methods to assess portfolio transition and physical risks
Low carbon products and services within our Institutional business focused on climate-related opportunities
Analysis of flood-related risks for our home loan portfolio in a major regional location of Australia
Test-pilot of socio-economic indicators showing financial resilience of home loan customers with respect to flood risk
Focus areas – 2020/21
Consider extending scenario analysis to incorporate bushfire, flood and other risks relating to retail customers
Possible extension of emerging environmental and climate-related risks to other segments of the home loan portfolio
Include climate risk reference in agriculture related lending guidance documents used by our front line bankers
Beyond 2020 vision
ANZ business strategy more closely aligned to a resilient and sustainable economy that supports the Paris Agreement goals and Sustainable Development Goals
Our progress to date
Risk management
Climate change risk added to Group and Institutional Risk Appetite Statements
Climate change identified as a Principal Risk and Uncertainty in our UK Disclosure and Transparency Rules (DTR) Submission
Guidelines and training provided to over 1,000 of our Institutional bankers on customers’ transition plan discussions
Enhanced financial analysis and stronger credit approval terms applied to agricultural property purchases in regions of low average rainfall or measured variability
New agribusiness customers assessed for financial resilience and understanding of rainfall and climate trends in their area, and water budgets considered if irrigating
Focus areas – 2020/21
Encouraging customers to develop and disclose their transition plans in key sectors energy, transport, buildings and food, beverage and agriculture
Customer engagement to identify customer or sector-specific transition or physical risks
Beyond 2020 vision
Integrate assessment
of climate-related risks into our Group risk management framework
Standard discussions with business customers include climate-related risks and opportunities
Assessment of customer transition plans part
of standard lending decisions and portfolio analysis
Our progress to date
Metrics and targets
Support 100 of our largest emitting customers1 to establish or strengthen low carbon transition plans by 2021, with metrics developed to track progress
Exceeded our 5-year $15 billion target to fund and facilitate low carbon and environmentally sustainable solutions
Power Purchase Agreement to increase renewable energy use in our Australian operations
Ongoing emissions reduction targets for ANZ energy use aligned with the Paris Agreement goals
Focus areas – 2020/21
Complete transition plan engagement with high emitting customers and consider how to integrate into customer assessments
New 6-year $50 billion target to fund and facilitate sustainable solutions
New metrics for measuring impact of our progress on environmental sustainability
New target to procure 100% renewable electricity for ANZ’s operations by 2025
Beyond 2020 vision
Monitor industry standards for lending aligned with the Paris Agreement goals
Reduce ANZ’s operational emissions in line with the decarbonisation trajectory of the Paris Agreement goals