Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — ESG Presentation (June 2019)
47 slides from Anz's sustainability presentation, Jun 21, 2019
Slide 1: ANZ 2019 ESG Investor briefing
ANZ 2019 ESG Investor briefing — Presentat ion & Investor D isc u ssion Pac k 21 June 2019 AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED
Slide 2: Environment, Social and Governance: Our Approach – Agenda
ENVIRONMENT, SOCIAL AND GOVERNANCE OUR APPROACH AGENDA GOVERNANCE – SHAYNE • Purpose and priorities • Structure and responsibilities • ESG committees ROYAL COMMISSION: ‘SPIRIT’ AND THE ‘LETTER’ - ALEXIS • Governance • First response • APRA self-assessment Q&A 2
Slide 3: Bringing Our Purpose to Life
BRINGING OUR PURPOSE TO LIFE CHOICES ABOUT WHO WE SERVE CHOICES ABOUT HOW WE OPERATE • WHO we bank • HOW we organise ourselves • HOW we bank • HOW we behave • WHAT we care about • HOW we measure & communicate our progress WHAT WE CARE ABOUT Housing Environmental Sustainability Financial Wellbeing Ou
Slide 4: Five Priorities
FIVE PRIORITIES 1. Own up to our failures and fix them 2. Do a few things, and do them well 3. Do more with what we have 4. Get our people ready for a different future 5. Give customers the tools they need to enhance their financial wellbeing 4
Slide 5: Fundamental Principles
FUNDAMENTAL PRINCIPLES GUIDING THE WAY WE ARE TRANSFORMING THE BANK AS WELL AS HOW WE DEVELOP OUR PRODUCTS AND SERVICES Spend less Save regularly Borrow within your Build towards Share what than you earn towards your goals means, allowing your you can some room to move retirement 1 3 5 7 9 2 4 6 8 P
Slide 6: Sustainability Targets
SUSTAINABILITY TARGETS HALF YEAR PROGRESS SNAPSHOT FAIR AND RESPONSIBLE BANKING March 2019 March 2018 Increased specialist retail remediation team (people) 200 130 Implement new Dispute Resolution Principles in Australia Complete - Create best experience for our customers1 4th 3rd ENVIRONMENTAL SUST
Slide 7: Where We Are Focused
WHERE WE ARE FOCUSED • Resolving long standing and / or complex customer issues • Getting balance right between consequence management and motivating positive behaviours • Balancing our dual roles of responsible banking and providing economic opportunity 7
Slide 8: Governance
ANZ 2019 ESG Investor briefing — G OV E R NANCE
Slide 9: ESG – Governance Overview
ESG – GOVERNANCE OVERVIEW BOARD OF DIRECTORS Chaired by David Gonski, Chairman Audit Committee Risk Committee Ethics, Environment, Digital Business Human Resources Nomination and Social and Technology Committee Board Operations and Governance Committee Committee Committee Chair: Chair: Chair: Chair:
Slide 10: Board and Executive Committees Work Together
BOARD AND EXECUTIVE COMMITTEES WORK TOGETHER INDICATIVE RESPONSIBILITIES DEMONSTRATE HOW COMMITTEES MANAGE ESG Ethics, Environment, Social and Governance Ethics and Responsible Business Board committee Management committee Purpose: Establish ethical and ESG guidelines and Purpose: Operationalise Boa
Slide 11: Board Ethics, Environment, Social and Governance Committee (EESG)
BOARD ETHICS, ENVIRONMENT, SOCIAL AND GOVERNANCE COMMITTEE (EESG) COMMITTEE REMIT EXPANDED 2017, GENERALLY MEETS FOUR TIMES A YEAR INDICATIVE AGENDA AND TOPICS COVERED Who we bank Governance • Emerging social issues eg. animal welfare, data privacy • Committee remit and forward agenda 14% • Asian de
Slide 12: Ethics and Responsible Business Management Committee (ERBC)
ETHICS AND RESPONSIBLE BUSINESS MANAGEMENT COMMITTEE (ERBC) COMMITTEE ESTABLISHED 2017, GENERALLY MEETS FOUR TIMES A YEAR INDICATIVE AGENDA AND TOPICS COVERED Governance • Materiality Review • Social and Environmental Risk policy • Committee remit Who we bank 11% • Lessons from the Royal Commission
Slide 13: EESG and ERBC – Indicative Future Focus
EESG AND ERBC – INDICATIVE FUTURE FOCUS WHO WE BANK HOW WE BANK OUR PRIORITIES • Emerging social issues eg. Data • Ethical decision making framework • Customer transition plans toward a privacy • Banking Code implementation low carbon economy • Vulnerable customers • Fairness – serving and competing
Slide 14: The Committees in Action
THE COMMITTEES IN ACTION THE FOLLOWING SLIDES PROVIDE CASE STUDIES TO DEMONSTRATE THE COMMITTEES’ DISCUSSIONS WHO WE BANK HOW WE BANK OUR PRIORITIES 1• Asian developing nation customer on- 2• Credit card gambling controls •3 Purpose and our ethical decision- boarding due diligence making framework H
Slide 15: Case Study – Who We Bank
CASE STUDY – WHO WE BANK 1 ASIAN DEVELOPING NATION CUSTOMER ON-BOARDING ENHANCED DUE DILIGENCE DUE DILIGENCE CONTROLS FOR NEW CUSTOMER ON-BOARDING Context: Demonstration of enhanced due diligence controls for on-boarding. Steps undertaken to on-board a new customer in April 2019 included: • Standard
Slide 16: Case Study – How We Bank
CASE STUDY – HOW WE BANK 2 CREDIT CARD GAMBLING CONTROLS REDUCING HARM TO POTENTIALLY VULNERABLE CUSTOMERS Context: In December 2018 we introduced a restriction on the use of credit cards for gambling transactions where the customer’s card has been utilised beyond 85% of the account credit limit. Th
Slide 17: Case Study – Our Purpose and Priorities
CASE STUDY – OUR PURPOSE AND PRIORITIES 3 PURPOSE AND OUR ETHICAL DECISION-MAKING FRAMEWORK ETHICAL CONSIDERATIONS INFORM HOW WE MAKE DECISIONS Context: To support our aim to build a more purpose-driven and ethical bank we have developed a decision-making framework that considers: • Our purpose: why
Slide 18: Case Study – How We Measure and Communicate
CASE STUDY – HOW WE MEASURE AND COMMUNICATE 4 EXTERNAL REPORT CARD – REPUTATION INDICATORS TRACKING OF EXTERNAL ESG RATING PERFORMANCE Context: Our reputation indicators identify our key weakness, scrutinised in the Royal Commission, as our failure to always responsibly deliver products and services
Slide 19: Case Study – Governance
CASE STUDY - GOVERNANCE 5 MATERIALITY REVIEW – A FOCUS ON FAIR AND RESPONSIBLE BANKING INTERVIEWS WITH EXTERNAL STAKEHOLDERS TO INFORM & HELP GUIDE OUR WORK IN RESPONSE TO THE ROYAL COMMISSION Context: Interviews were held with external stakeholders including institutional investors, retail sharehol
Slide 20: Update on ANZ and the Royal Commission
ANZ 2019 ESG Investor briefing — U PDATE O N A N Z A N D TH E ROYA L CO M MI SS I ON
Slide 21: Royal Commission: Our Approach, Our Response
ROYAL COMMISSION OUR APPROACH, OUR RESPONSE WE ARE DETERMINED TO RESPOND TO THE ‘SPIRIT AND THE LETTER’ OF THE ROYAL COMMISSION. Initial response ANZ ACTIONS • Committed to sixteen actions that we can take now ANZ analysis of Royal Commission recommendations • Reviewed individual cases highlighted a
Slide 22: Royal Commission: Learnings from ANZ's Submissions
ROYAL COMMISSION LEARNINGS FROM ANZ’S SUBMISSIONS • Specific to the misconduct and failures to meet community standards and expectations (CSEs) that we submitted to the Royal Commission • Will be mapped against work and assigned success measures to assess when they have been addressed • Significant
Slide 23: APRA Self-Assessment
APRA SELF-ASSESSMENT RESPONDING TO IDENTIFIED THEMES SELF-ASSESSMENT AT APRA’S REQUEST ANZ submitted its self-assessment report to the Australian Prudential Regulation Authority in November 2018. The assessment identified a number of themes across the three assessment domains of culture, accountabil
Slide 24: Reporting on Executive Accountability
REPORTING ON EXECUTIVE ACCOUNTABILITY OUR GOVERNANCE FRAMEWORK AND ITS OUTCOMES INDICATIVE EXECUTIVE ACCOUNTABILITY DISCLOSURE MAY INCLUDE EXECUTIVE ACCOUNTABILITY Categories of matters • We will explain the governance Code of conduct [Number] framework under which we hold our senior executives to a
Slide 25: Sustainability
ANZ 2019 ESG Investor briefing — ES G I N V ESTOR D I S C U SS ION PAC K S U STA I N A BIL ITY
Slide 26: ESG – Governance Overview
ESG – GOVERNANCE OVERVIEW ETHICS, ENVIRONMENT, SOCIAL AND ETHICS AND RESPONSIBLE BUSINESS GOVERNANCE COMMITTEE (EESG)COMMITTEE MANAGEMENT COMMITTEE (ERBC) • The EESG Committee is one of 6 Board sub-committees (including: • The Ethics & Responsible Business Committee is a leadership and Audit Committ
Slide 27: Purpose: An Integral Part of Our Strategy
PURPOSE AN INTEGRAL PART OF OUR STRATEGY HELPED GUIDE OUR DECISION TO PROVIDE RELIEF TO FARMERS IMPACTED SUSTAINABILITY FRAMEWORK BY NATURAL DISASTERS INFORMED OUR APPROACH TO SUSTAINABLE AND AFFORDABLE HOUSING • Affordable, secure & sustainable homes • ‘Healthy Home’ Loan Package • Environmentally
Slide 28: Creating Value for Our Stakeholders – March 2019
CREATING VALUE FOR OUR STAKEHOLDERS – 31 MARCH 2019 CUSTOMERS EMPLOYEES COMMUNITY SHAREHOLDERS5 8.7m total retail, commercial 39,359 people employed $137m contributed in >500,000 Retail & Institutional and Institutional customers (FTE) community investment in FY183 shareholders ~150,000 net new cust
Slide 29: Sustainability Performance Trends
SUSTAINABILITY PERFORMANCE TRENDS COMMUNITY INVESTMENT1 MONEYMINDED & SAVER PLUS ENVIRONMENTAL FINANCING $15B TARGET Total community investment ($m) Estimated # of people reached Funded and facilitated ($b) 137 88,308 131 80,074 69,826 65,549 14.6 59,461 11.5 90 76 75 10 6.9 5 2.5 2014 2015 2016 201
Slide 30: External Reporting
EXTERNAL REPORTING RECOGNITION Highest ranked Australian We achieved a CDP Member of the 2018-19 leader in Platinum Status LGBTI bank on the Dow Jones climate disclosure score FTSE4Good Index workplace gender Employer of Choice for Sustainability Index, scoring of A- in 2018 equality longevity in hi
Slide 31: Remediation
ANZ 2019 ESG Investor briefing — ES G I N V ESTOR D I S C U SS ION PAC K R E M EDI ATION
Slide 32: Customer Remediation
CUSTOMER REMEDIATION TOTAL PRE-TAX IMPACT Financial impact $m -533 • $175m ($123m post tax) charge in 1H19 • $928m ($657m post tax) charges since 1H17 -175 • $698m provisions on balance sheet at 31 March 2019 -102 -67 -51 1H17 2H17 1H18 2H18 1H19 Progress to date CONTINUING OPERATIONS DISCONTINUED O
Slide 33: Royal Commission
ANZ 2019 ESG Investor briefing — ES G I N V ESTOR D I S C U SS ION PAC K ROYA L CO M M IS SI ON
Slide 34: Responding to the Royal Commission
RESPONDING TO THE ROYAL COMMISSION ‘IDENTIFIED SIXTEEN ACTIONS THAT WE CAN TAKE NOW’ COMMITMENT On 20 February 2019, ANZ announced it would take immediate steps to implement the first phase of its response to the recommendations from the Royal Commission into Misconduct in the Banking, Superannuatio
Slide 35: Royal Commission: Sixteen Actions – Update
ROYAL COMMISSION SIXTEEN ACTIONS – UPDATE ON 20 FEBRUARY COMMITMENTS Commitment Update on 20 February commitments Retail customers 1. Make our products fairer and better matched to our customers by: 1.1 Removing overdrawn and dishonour fees on our ANZ has removed the Overdrawn Fee and the Dishonou
Slide 36: Royal Commission: Sixteen Actions – Update
ROYAL COMMISSION SIXTEEN ACTIONS – UPDATE ON 20 FEBRUARY COMMITMENTS Commitment Update on 20 February commitments Retail customers 3. Helping customers by: In March 2019 we established an ongoing process to contact credit card customers who are carrying persistent debt. We provide these customers
Slide 37: Royal Commission: Sixteen Actions – Update
ROYAL COMMISSION SIXTEEN ACTIONS – UPDATE ON 20 FEBRUARY COMMITMENTS Commitment Update on 20 February commitments Remuneration 5. Redesign how we manage and reward our people to better focus on the interests of our customers, the ANZ is working to launch a new approach to reward, remuneration and
Slide 38: Royal Commission: Sixteen Actions – Update
ROYAL COMMISSION SIXTEEN ACTIONS – UPDATE ON 20 FEBRUARY COMMITMENTS Commitment Update on 20 February commitments Remediation 12. Publicly report on how we are fixing our significant failures, including the nature of the issues and our progress on paying customers back. This will include ANZ has r
Slide 39: Carbon
ANZ 2019 ESG Investor briefing — ES G I N V ESTOR D I S C U SS ION PAC K C A R B ON
Slide 40: Reviewing Our Carbon Commitments and Disclosure
REVIEWING OUR CARBON COMMITMENTS AND DISCLOSURE SUPPORTING OUR CUSTOMERS TO TRANSITION TO A LOW CARBON ECONOMY The Board EESG Committee was presented with options for how ANZ might best support its customers to transition to a low carbon economy, in line with goals of the Paris Agreement. Two princi
Slide 41: Low Carbon & Sustainable Finance Increasing; Carbon-Intensive Exposure Decreasing
LOW CARBON & SUSTAINABLE FINANCE IS INCREASING AND OUR EXPOSURE TO CARBON-INTENSIVE SECTORS IS DECREASING OUR EXPOSURE TO THE MOST CARBON-INTENSIVE ENERGY SOURCES ARE DECLINING Project Finance Power Generation Portfolio (Sept’ 18) • ANZ’s funding and facilitation of renewables and gas-fired power is
Slide 42: Resources Portfolio & Management
RESOURCES PORTFOLIO & MANAGEMENT RESOURCES EXPOSURE AT DEFAULT (EAD) BY SECTOR ($b) THERMAL COAL EXPOSURE within ‘coal mining’ sector ($b) 2.0 1.70 TOTAL EAD (Mar-19): $15.6b (Resources exposures as a % of Group EAD: 1.6%) 1.5 1.18 0.94 9.4 1.0 0.81 0.75 8.6 7.2 7.8 7.0 7.6 7.4 7.3 0.5 Sep-15 Sep-16
Slide 43: Sustainable Finance Case Study: Sydney Airport
SUSTAINABLE FINANCE CASE STUDY: SYDNEY AIRPORT AUD$1.4 BILLION SUSTAINABILITY LINKED LOAN FACILITY AUD$1,400,000,000 Transaction Highlights Background • Sydney Airport (SYD) sought to enhance their management of Environmental, Social and Governance (ESG) risks via a syndicated Sustainability Linked
Slide 44: Implementation of Customer Transition Plan Target
IMPLEMENTATION OF CUSTOMER TRANSITION PLAN TARGET Background • Our climate change policy, includes a commitment to “encourage and support 100 of our largest emitting customers in the energy, transport, buildings and food, beverage and agricultural sectors to establish or strengthen their low carbon
Slide 45: Example Customer Disclosure Towards Low Carbon Future: Dexus
EXAMPLE CUSTOMER DISCLOSURE TOWARDS LOW CARBON FUTURE DEXUS – BUILDING OWNERSHIP AND MANAGEMENT DEXUS HAS A RANGE OF TARGETS AND INITIATIVES AIMED AT HELPING THEM TRANSITION TO A LOW CARBON FUTURE 1. Tightening their cornerstone carbon intensity reduction target from 75% to 82% by 2050 (compared wit
Slide 46: Example Customer Disclosure Towards Low Carbon Future: BHP
EXAMPLE CUSTOMER DISCLOSURE TOWARDS LOW CARBON FUTURE BHP – DIVERSIFIED MINER BHP has an integrated strategy that focuses on: reducing operational GHG emissions; addressing value chain (scope 3) emissions; managing climate-related risk and opportunity; and working with others to enhance the industry
Slide 47: Further Information
FURTHER INFORMATION Our Shareholder information shareholder.anz.com Equity Investors Jill Campbell Cameron Davis Harsh Vardhan Group General Manager Executive Manager Manager Investor Relations Investor Relations Investor Relations +61 3 8654 7749 +61 3 8654 7716 +61 3 8655 0878 +61 412 047 448 +61
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