2023

CLIMATE-RELATEDFINANCIAL DISCLOSURESSHAPING A WORLD
WHERE PEOPLE AND
COMMUNITIES THRIVE

More than ever, ANZ has shaped
itself as a bank that supports ourcustomers across 29 markets.
And today, from individuals tobusinesses, we continue to build
a bank that helps them achievesustainable financial wellbeing.
It’s an uncompromising purposethat helps our customers makethe most of their world, every day.

ANZ 2023 Climate-related Financial Disclosures

CONTENTS
About this report

42023 Climate snapshot

6

ANZ Climate approach

7

Governance

8Strategy

12

Risk Management

34

Metrics and Targets

43

Our approach to sectoral pathways

46

Energy51

Transport

57

Acknowledgement of Country and Traditional Owners

Manufacturing

63

Buildings

69

Large Institutional Agribusiness Customers

75

ANZ acknowledges the Traditional Custodians of Country
throughout Australia and recognises the continuing connection
to lands, skies and waterways. We pay our respects to Aboriginal
and Torres Strait Islander cultures, and to Elders past and present.

Total Lending Portfolio

76

Appendices78

Assurance opinion

88

IMPORTANT NOTICE
VersionDate issued

Brief outline of change

1.0

13 Nov 2023

Version for publication

1.1
19 Aug 2024
		
		
		
		
		

Change: RestatedTransport sub-sector
aviation pathway as
outlined in footnote
on pages 6, 43, 49, 59
and 80.

Whakatauākī, ANZ New Zealand’s Proverb
Tākiri-ā-Rangi The expansive universe above
Tākiri-ā-Nuku The beauty of the proceeding lands below
Tākiri Te Awatea A new dawn beckons
Kia Puawai Ki Te Ao A blossoming to the world
Te Kare A Roto E With ripples of compassion and hope for all.

4

ANZ 2023 Climate-related Financial Disclosures

ABOUT
THIS REPORT
Through our purpose to shape a world
where people and communities thrive –we have elevated three areas facing
significant societal challenges alignedwith our strategy and reach. This includes
supporting households, business andfinancial practices that improve
Environmental Sustainability.
On 3 January 2023, Australia and New Zealand
Banking Group Limited (ANZBGL) established by ascheme of arrangement, a non-operating holding
company, ANZ Group Holdings Limited (ANZGHL), as
the new listed parent holding company of the ANZGroup and implemented a restructure to separate
ANZ’s banking and certain non-banking businesses
into the ANZ Bank Group and ANZ Non-Bank Group

Supporting Sustainable Development

We are committed to the United Nations
Sustainable Development Goals (SDGs) andbelieve that business has an important roleto play in their achievement. Our current ESG
targets strive to support all of the 17 SDGs.

(Restructure). The ANZ Bank Group comprises the
majority of the businesses and subsidiaries thatwere held in ANZBGL prior to the Restructure. The
ANZ Non-Bank Group comprises banking-adjacentbusinesses developed or acquired by the ANZ Groupto focus on bringing new technology and bankingadjacent services to the ANZ Group’s customers,
and a separate service company.
This report describes ANZGHL and its subsidiaries(referred to as “ANZ” or “the Group” or "our")progress towards implementing our Climate
Change Commitment and Environmental
Sustainability Strategy.
The other two focus areas facing societal
challenge, Financial Wellbeing and Housing,are covered in detail in our ESG Supplement
available at anz.com/esgreport.

and Frameworks pack at anz.com/esgreport.
This year KPMG have also provided limited
assurance over our Self-assessment Index.

Frameworks
This report has been prepared in accordancewith the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations 2017.
We have sought to incorporate the additional
recommendations of the TCFD (2021 Annex). Our
TCFD Index can be found on page 78. Since 2017,
we have disclosed our progress according to TCFD
Recommendations with a summary in our Annual
Report and detail within a standalone report.
ANZ joined the Net-Zero Banking Alliance (NZBA)
in 2021 and the information within this reportsets out how we are taking action in line with thiscommitment. We have also considered aspectsof the Glasgow Financial Alliance for Net Zero
(GFANZ) requirements.
With the release of the Taskforce on Nature-related
Financial Disclosures (TNFD) framework in
September 2023, we are taking steps towards
the TNFD’s recommendations to help informour disclosures in this report. Our TNFD Index
can be found on page 79.
While most of the information on how we aretransitioning towards net zero is available throughout
this report, we intend to publish a more detailedtransition plan next year on how we plan to reachnet zero.

In 2019 we became a founding signatory to the
UN Principles for Responsible Banking. Under
the Principles we are required to set at least two
targets that address our most significant (potential)
positive and negative impacts, aligned with theSDGs and the Paris Climate Agreement.

Further detail about our approach to developing
metrics, pathways and targets for our priority
sectors, can be found in ANZ’s Financed Emissions
Methodology and in ANZ’s Social and Environmental
Sustainability Target Methodology available atanz.com/esgreport.

We have reported our progress towards
implementing the Principles using the Reporting
and Self-assessment Index, available in our ESG Data

Boundaries
The report covers all operations over which wehave control for the financial year commencing on
1 October 2022 and ending 30 September 2023,

referred to as "2023” throughout the report,
unless otherwise stated. Monetary amounts inthis document are reported in Australian dollars,
unless otherwise stated.

Overview
About this report
Disclaimer and important notices
2023 Climate snapshot

Assurance
KPMG has performed limited assurance overthe disclosures in this report, including the two
methodology documents referenced above. A copyof KPMG’s limited assurance report is on pages 88-89.
KPMG has also performed reasonable assurance overGlobal GHG Emissions (Scope 1 and 2).

ANZ Climate approach
Governance
Strategy
Risk Management
Metrics and Targets

2023 Reporting Suite
We produce a suite of reports to meet the needs
and requirements of a wide range of stakeholders
including shareholders, customers, employees,
regulators, non-government organisations (NGOs)
and the community.
This Climate-related Financial Disclosures reportcomplements our 2023 Annual Report available
at anz.com/annualreport.
Our 2023 ESG Supplement provides stakeholders
with detailed ESG disclosures, including
performance against our ESG targets. Available
at anz.com/esgreport.
Our 2023 Corporate Governance Statement
discloses how we have complied with the Australian
Securities Exchange (ASX) Corporate GovernanceCouncil’s ‘Corporate Governance Principles andRecommendations – 4th edition’ and is available
at anz.com/corporategovernance.
We are continually seeking to improve ourreporting suite and welcome feedback on thisreport. Please address any questions, comments
or suggestions in relation to this report tocorporate.sustainability@anz.com.

Appendix
Assurance opinion

5

ANZ 2023 Climate-related Financial Disclosures

Overview

DISCLAIMER & IMPORTANT NOTICES

About this report
The material in this report contains general backgroundinformation about the Group’s activities current as at
10 November 2023. It is information given in summary
form and does not purport to be complete. It has asustainability focus and does not reflect the totalityof the Group’s business activities. For a more complete
overview of the Group’s business, see the ANZ Annual
Report available at anz.com/shareholder/centre/.
It is not intended to be and should not be relied uponas advice to investors or potential investors, and does
not take into account the investment objectives, financial
situation or needs of any particular investor. Theseshould be considered, with or without professional
advice, when deciding if an investment is appropriate.

Forward-looking statements
This report may contain forward-looking statements or
opinions including statements regarding our intent, belief
or current expectations with respect to the Group’s business
operations, market conditions, results of operations andfinancial condition, capital adequacy, sustainability objectives
or targets, specific provisions and risk management practices.
When used in the report, the words ‘forecast’, ‘estimate’,'goal', 'target', 'indicator', 'plan', 'pathway', ‘ambition’,‘modelling’, ‘project’, ‘intend’, ‘anticipate’, ‘believe’, ‘expect’,‘may’, ‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’, ‘could’, ‘should’and similar expressions, as they relate to the Group and its
management, are intended to identify forward-looking
statements or opinions. Those statements are usually
predictive in character; or may be affected by inaccurate
assumptions or unknown risks and uncertainties or may
differ materially from results ultimately achieved. As such,these statements should not be relied upon when making
investment decisions. These statements only speak as at thedate of publication and no representation is made as to theircorrectness on or after this date. Forward-looking statements
constitute ‘forward-looking statements’ for the purposesof the United States Private Securities Litigation Reform Act of1995. The Group does not undertake any obligation to publicly
release the result of any revisions to these forward-looking
statements to reflect events or circumstances after the datehereof to reflect the occurrence of unanticipated events.

Climate-related information
This report may contain climate-related statements, including
in relation to climate-related risks and opportunities, climaterelated goals and ambitions, climate scenarios, emissions
reduction pathways and climate projections. While theGroup has prepared the statements in good faith, climaterelated statements are subject to significant uncertainty,
challenges and risks that may affect their usefulness,accuracy and completeness, including:
1. A vailability and reliability of data – emissions andclimate-related data may be incomplete, inconsistent,
unreliable or unavailable (including information fromthe Group’s clients), and it may be necessary to rely on
assumptions, estimates or proxies where that is the case.
2. Uncertain methodologies and modelling –methodologies, frameworks and standards used for
calculations of climate-related metrics, modelling andclimate data are not universally applied, are rapidly evolving
and subject to change. This may impact the data modelling,
approaches, and targets used in preparation of this report.
3. C omplexity of calculations and estimates – Estimating
financed emissions (including allocating emissions tofinancing activities) and emissions reduction is complex
and relies on assumptions and judgments, often made in
respect of long periods of time. For facilitated emissions,suitable standards to allow financial institutions to calculate
facilitated emissions are still under development as at
October 2023.
4. Changes to climate-related governing frameworks –changes to climate-related policy, laws, regulations
and market practices, standards and developments,
including those resulting from legal proceedings andregulatory investigations.
5. Lack of consistency in definitions and climate-scienceterminology subject to changes – definitions andstandards for climate-related data and assessment
frameworks used across industries and jurisdictions mayvary, and terminology and concepts relating to climate
science and decarbonisation pathways may evolve andchange over time. These inconsistencies and changes canalso make comparisons between different organisations’climate targets and achievements difficult or inappropriate.

6. R eliance on third parties for data or involvement –the Group may need to rely on assistance, data or otherinformation from external data and methodology providers
or other third parties, which may also be subject to change
and uncertainty. Additionally, action and continuing
participation of third parties, such as stakeholders,
may be required (including financial institutions andgovernmental and non-governmental organisations).

Disclaimer and important notices

Due to these uncertainties, challenges and risks, statements,
assumptions, judgments, calculations, estimates or proxies
made or used by the Group may turn out to be incorrect,
inaccurate or incomplete. Readers should conduct theirown independent analysis and not rely on the information
for investment decision-making.

Strategy

The information in this notice should be read with:

Appendix• The qualifications, limitations and guidance included
throughout this report

Assurance opinion• ANZ Financed Emissions Methodology available atanz.com/esgreport• ANZ Greenhouse Gas Reporting and Carbon Offset
Guidelines available at anz.com.au/about-us/esg/
environmental-sustainability/environmental-footprint/• ANZ Social and Environmental Sustainability Target
Methodology available at anz.com/esgreport

2023 Climate snapshot
ANZ Climate approach
GovernanceRisk Management
Metrics and Targets

6

ANZ 2023 Climate-related Financial Disclosures

2023
CLIMATE SNAPSHOT 1
Overview
Existing Sectoral Pathways
Power Generation

2030 Interim Target Reduction

Status50% (2020 baseline)

ON TRACKOil and Gas

26% (2020 baseline)

ON TRACK

Aluminium

30% (2021 baseline)

NOT ON TRACK

Cement20% (2021 baseline)64
of 100 of our largest emitting businesscustomers now have ‘well developed’or ‘advanced’ transition plans versus
42 in September 20212

28% (2021 baseline)

CLOSE TO ON TRACK

Large-scale Commercial Real Estate4

60% (2019 baseline)

ON TRACK

Thermal Coal

100% (2020 baseline)

ON TRACKTransport sub-sector: Aviation

20%5 (2019 baseline)

ON TRACKTransport sub-sector: Auto Manufacturing

28% (2022 baseline)

ON TRACK

1. Refer to page 43 for further detail on our sectoral pathways. 2. Refer to pages 23-24 for further detail. 3. Refer to page 20 for further detail. 4. Actual
Performance Against our Large-scale commercial real estate Target up to end 2022. 5. We have restated this target due to an error. We previously stated thatour 2030 emissions intensity target for aviation required a 30% reduction from our 2019 baseline whereas, in fact, it only requires a 20% reduction from our2019 baseline. The target remains unchanged.

GovernanceMetrics and Targets$8.8 B

Appendixfunded and facilitated in socialand environmental outcomes3
since 1 April 2023

of our project finance power generation
portfolio is from renewables projects

80%
reduction in combined Scope 1 and 2
greenhouse gas emissions against a2015 baseline

ON TRACK>10% above pathway

ANZ Climate approach

Approximately

97%

10% (2022 baseline)

2023 Climate snapshot

Risk Management

New Sectoral Pathways

Transport sub-sector: Shipping

Disclaimer and important notices

Strategy

ON TRACK

Steel

About this report<=10% above pathway

On or below pathway

Assurance opinion

7

ANZ 2023 Climate-related Financial Disclosures

ANZ CLIMATE APPROACH
PROGRESS TOWARDS NET ZERO
Overview

Set a target toencourage andsupport 100 of ourlargest emitting
business customers todevelop or strengthen
their transition plans
2018

First Australian bankto join the Net-Zero
Banking Alliance (NZBA)

Adopted Climate Change Risk Assessment
online tool to support bankers to engage
with customers on climate risk

Set sectoral pathways
targets for:Set sectoral pathway targets:

About this report
Disclaimer and important notices
2023 Climate snapshot
ANZ Climate approach• Large-scalecommercial realestate in Australia• Global power
generation• Thermal coal
• Transport (Aviation, Automanufacturing, Shipping)• Large Institutional Agribusiness
Customers data coverage target• Residential home loans baseline

Enhanced customer
engagement through
LEEP, including
additional sectoral
pathways customers

2021

2023

2025

Governance
Strategy
Risk Management
Metrics and Targets
Appendix
Assurance opinion

STARTING EARLYSCALING UP

ENHANCED CUSTOMER ENGAGEMENTFROM AMBITION TO ACTION

2015

2019

2022

2024

2030

Issued first Green Bond,certified by the Climate
Bonds Initiative

Committed to funding
and facilitating at least$50 billion by 2025
towards sustainable
solutions

Announced new $100 billion
social and environmental
sustainability target to improvesocial and environmental
outcomes for our customers

New phase of our Large
Emitters Engagement
Program (LEEP), including
focused engagement
and raised expectations
on our 100 largest emitting
business customers

Aim to achieve targets for key sectoral pathways:

Committed to funding
and facilitating at least$10 billion by 2020
in low carbon andsustainable solutions

Set sectoral pathway targets:• Oil and gas• Cement• Aluminium• SteelJoined the Taskforce on Nature-related
Financial Disclosures (TNFD) Forumto support its work

• Thermal coal
• Transport (Aviation, Auto
Manufacturing, Shipping)• Cement• Large-scale commercial real estate• Aluminium• Oil and gas• Power generation• Large Institutional Agribusiness
Customers data coverage target• Residential home loans baseline

8

ANZ 2023 Climate-related Financial Disclosures

GOVERNANCE
Board and Executive oversight

OUR GOVERNANCE FOR OVERSIGHT OF CLIMATE-RELATED RISKS AND OPPORTUNITIESThe ANZ Group Holdings Limited Board (Board)is responsible for oversight of the Group andits overall governance and performance, withspecific duties as set out in its charter available
at anz.com/corporategovernance.
The Board, with the support of the Board
Committees, is also responsible for oversightof ANZ’s governance framework. The framework
seeks to provide for effective and responsible
decision making, assisting ANZ in delivering
on its strategy and purpose.
There are six principal Board Committees: theEthics, Environment, Social and Governance(EESG) Committee; the Audit Committee; theRisk Committee; the Human Resources Committee;
the Digital Business and Technology Committee;
and the Nomination and Board Operations
Committee. Each Committee has its own
charter setting out its roles and responsibilities.
At management level, the Group Executive
Committee comprises ANZ’s most senior executives.
A delegations of authority framework outlines
matters delegated to our Chief Executive Officer(CEO) and other members of senior management.
In addition, a number of formally establishedmanagement committees deal with particularongoing issues.
Our ESG approach, including how we manage ourclimate-related risks and opportunities, is primarily
overseen by the Board and management throughour Board EESG Committee and management
Ethics and Responsible Business Committee (ERBC).
Governance and oversight of risk management
is the focus of committees and forums acrossthe bank. See chart for our governance structure
relevant to the oversight of climate-relatedrisks and opportunities.

Overview

ANZ GROUP HOLDINGS LIMITED BOARD

Governance
Board and executive oversightKEY BOARD COMMITTEES

Board and Board committees

Board Ethics, Environment, Socialand Governance Committee (EESG)

Board Risk
Committee

Board Human
Resources Committee

Management committees
Enhanced due diligence
Executive remuneration

KEY MANAGEMENT COMMITTEES AND FORUMSStrategy

Ethics and Responsible Business Committee (ERBC)

Risk Management

Climate Advisory Forum (CAF)

Metrics and Targets
Appendix

KEY MANAGEMENT ROLES

Assurance opinion

Group Executive, Institutional – drives executionof the Group's Environmental Sustainability Strategy,
including engagement and opportunities with
our largest customers.

Chief Risk Officer – responsible for the Group’s Risk
Management Framework, including the ownershipof risk strategies, policies and procedures supporting
the management of climate-related risks.

Group General Manager, ESG – leads theGroup ESG Team1 which guides and informs
the Group's response to ESG issues andrelated market disclosures.

KEY SUPPORT TEAMSESG Governance Team –supports effective
identification andmanagement of the Group's
ESG risks and opportunities
through our senior executive
and Board decision making
processes and structures.

ESG Disclosures andReporting Team –delivers the Group’s ESG
disclosures, reporting,market briefings andoversight of forthcoming
reporting standards,
practices and frameworks.

ESG Analytics and Advisory
Team – provides "subject
matter expertise" advice onsocial and environmental issues
affecting our business lending
decisions, such as public
policy, regulation, emerging
community standards andexpectations, and managing
the development of climaterelated metrics and targets.

Social and Environmental
Risk Management Team –provides risk oversight over
the Social and Environmental
Risk Policy and associatedrequirements and supports
the delivery of workstreams
to improve the Group's
management of social andenvironmental impacts,
including climate-relatedrisks and opportunities.

1. Group ESG Team includes key support teams: ESG Governance Team, ESG Disclosures and Reporting Team and ESG Analytics and Advisory Team.

Institutional Strategic
Planning and Execution
Team – supports ourcustomer engagement
program and the CAF.

9

ANZ 2023 Climate-related Financial Disclosures

Board and Board Committees
ANZ’s Board
The Board is responsible to shareholders for thegovernance of the Group and oversees its operations
and financial performance.
The role of the Board is to promote the long-term
interests of ANZ. To fulfil its role, the Board sets andmonitors the long-term implementation of ANZ’s
strategies and financial objectives. The Board has
a specific responsibility to oversee and assessmanagement’s performance in achieving strategies
and budgets approved by the Board and inmonitoring and managing risk across ANZ.
ANZ's strategy is to improve the financial wellbeing
and sustainability of our customers. We are focusedon integrating our purpose and ESG approach into
our business strategy.
Through our purpose – we have elevated threeareas facing significant societal challenges alignedwith our strategy and reach, including supporting
households, business and financial practices that
improve Environmental Sustainability. The other two
focus areas, Financial Wellbeing and Housing, arecovered in detail in our ESG Supplement available
at anz.com/esgreport.
Our purpose provides the context in which we
make decisions and consider our overall strategy.
Further, specific updates on our Environmental
Sustainability Strategy including the Group’s
environmental priorities and related targets
are presented periodically to the Board.

Board Ethics, Environment, Socialand Governance (EESG) Committee
The Board EESG Committee, chaired by ANZ’s
Chairman, is responsible for assisting the Board by
providing oversight of measures to advance ANZ’s
purpose, focusing on ethical and ESG matters.
In undertaking this role, the Board EESG Committee
is responsible for oversight, review and approval of
ANZ’s ESG approach, objectives and performance,
including climate-related targets.
The Board EESG Committee generally meets at least
four times annually, meeting five times in 2023.
Meetings typically open with an overview of the
ESG operating environment, covering current
and emerging issues, including regulatory andparliamentary inquiries, community sentiment,
relevant international developments and our
stakeholder engagement.
The Board EESG Committee also reviews ERBC
meeting minutes and discusses material mattersreferred to the Committee from that body. The
charter of the Board EESG Committee is available
at anz.com/corporategovernance.
Board Risk Committee
The Board Risk Committee (BRC) oversees theimplementation and operation of the Group’s
Risk Management Framework, including new
and emerging risks, such as risks which are climaterelated. Climate is covered from time to time at the
BRC, for example as part of the Chief Risk Officer’s
report, via sector reports and updates to ANZ’s Risk
Management Strategy.
The BRC meets at least four times annually,meeting eight times in 2023. The charter ofthe Board Risk Committee is available atanz.com/corporategovernance.

Board Human Resources Committee
The Human Resources (HR) Committee supports
the Board on remuneration and other HR matters.
It reviews the remuneration policies and practicesof the Group, and monitors market practice andregulatory and compliance requirements inAustralia and overseas.
The HR Committee has a strong focus on therelationship between business performance,risk management and remuneration, alignedwith our business strategy.
A concurrent meeting of the HR, Risk and Audit
Committees was held to review 2023 performanceand variable remuneration recommendations
at both the Group (i.e. assessment of the ANZGroup Performance Framework which included
sustainability-related objectives), CEO and
Disclosed Executive level. Refer to our Remuneration
Report within our Annual Report available atanz.com/annualreport.

Board skills
The ANZ Board Skills Matrix, as set out in the 2023
Corporate Governance Statement, which is available
at anz.com/corporategovernance, outlines the
key skills and experience the ANZ Board is looking
to achieve in its membership and the number of
Directors with each skill/experience. Included in
the skills matrix is Sustainability.
Our Directors collectively bring a broad rangeof skills, and current and prior experience which
includes having held roles across sectors suchas infrastructure, energy, mining, banking andagriculture. For further details on the experienceof our Directors refer to anz.com/annualreport.

In addition to having individuals on the Board
with a variety of technical skills and experiences,the Board seeks to ensure that the Directors operate
as a team. The Board is focused on the long-term
success of the Group. Each Director has an individual
perspective which facilitates respectful andconstructive challenge of management andeach other and allows for robust debate that
may be required when navigating complex issues.
The Skills Matrix is reviewed by the Nomination and
Board Operations Committee on a regular basis.

Management Committees and Forums
Ethics and Responsible BusinessCommittee (ERBC)The ERBC, chaired by the CEO, comprises Senior
Executives and members from business divisionsand Group functions.
The ERBC is a leadership and decision-making bodythat exists to advance ANZ’s purpose and seeks toensure that ANZ operates responsibly and achieves
fair, ethical and balanced stakeholder outcomes.
The ERBC approves relevant ANZ policies, such as
those policies identified in ANZ’s Climate Change
Commitment. The ERBC provides leadership on our
ESG risks and opportunities, monitoring progress(quarterly) against ANZ’s ESG targets which include
those related to climate change.
The ERBC considers the social and environmental
impacts of the industries, customers andcommunities ANZ serves. The ERBC is responsible
for overseeing the ERBC Sub-Committee forsensitive wholesale transactions.

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

10

ANZ 2023 Climate-related Financial Disclosures

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 ourGroup Executive Institutional, includes our Group
Chief Risk Officer, Group General Manager ESG andother executives.
The CAF oversees implementation of ANZ’s Climate
Change Commitment – ensuring coordination
between the various workstreams including ourEnvironmental Sustainability (ES) Strategy and our
sectoral pathways.
The CAF meets approximately monthly with theagenda structured to cover ES focus areas on a regularand 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:

Areas of focus by the Board EESG
Committee and management ERBC
Both Committees discuss the areasof ‘how we bank’ and ‘who we bank’.
Environmental Sustainability is one
of ANZ’s three ESG focus areas that isfundamental to our business and strategy.
Climate is a standing item on both theBoard EESG Committee and ERBC's agenda.

capturing and managing ES-related data, rolling out
ES education, considering nature and biodiversity, ourcustomer engagement program, sectoral pathways
progress and enhancing transparent reporting anddisclosures. Actions and decisions are captured andprogress of the ES focus areas are tracked. The CAF
met nine times in 2023.
Other management committees
Other management committees play a role inthe 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 related
Control Environment across the Group; and• Credit and Markets Risk Committee (CMRC)
is the senior executive management forum
responsible for the oversight and control ofcredit, market, insurance and other material
financial risks across the Group.

The climate paper is usually presented to theCommittees by the Group Chief Risk Officer,
Group Executive Institutional and Group General
Manager ESG.
Based on allocated agenda time, this year theseCommittees jointly dedicated approximately 25 percent of their time to climate-related topics. This
included reviewing and approving our approach
to climate-related objectives and targets.

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.

Overview

Activities undertaken by the ERBC will at times overlap,
and inform, topics raised in OREC and CMRC as part ofthe executive oversight and risk management required
to deliver on ANZ’s purpose and strategy.

Board and Board committees

Governance
Board and executive oversightManagement committees
Enhanced due diligence
Executive remuneration

Stakeholder engagement
We run a regular program of CEO and Senior
Executive meetings with civil society leaders
including environmental non-governmentalorganisations, regulators and academics.

Strategy

Further, our Group Chief Risk Officer and Group
General Manager ESG visited Europe and theUnited 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 challenges and opportunities.

Appendix

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 to support knowledge
building and capability in areas such as
climate and biodiversity.

Risk Management
Metrics and Targets

Assurance opinion

11

ANZ 2023 Climate-related Financial Disclosures

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 business units.
Our sectoral pathways (disclosed on pages 49-77)
are developed by our ESG Analytics and Advisoryteam, 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 approvedby 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 whichdata (for example emissions data) is reported byour customers.

Biodiversity
Biodiversity has been considered by the Board
EESG Committee and management ERBC as part oftheir responsibility to provide leadership to advance
ANZ’s purpose, involving consideration of certainsocial and environmental impacts. Recognising aneed to build our understanding of, and capability
in, emerging risks and opportunities to inform ourdirection – this year the Board EESG Committee andmanagement ERBC received updates on biodiversity,
including a progress update on the TNFD.
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 diligenceand 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 transactionsin this context include those likely to have asignificant 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 evaluationof customer transition plans using the criteria

we apply in our engagement with our largest
emitting business customers, outlined on
page 24 of this report.
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 initialassessment 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 senior executives are primarily the ones
responsible for monitoring our climate progress –they are our Group Executive Institutional, Group
Chief Risk Officer and Group General Manager ESG.
As part of this process our ethical decision-making
principles are applied, including considering if
the transaction will advance ANZ’s strategic andcommercial 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 theescalated transactions is provided to the ERBC
for oversight and information.

Refer to page 39 for further details on otherpolices 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 forour most senior employees. In general, remuneration
outcomes for the CEO and Disclosed Executives
take into consideration performance against ANZ’sGroup Performance Framework – which includes
sustainability objectives and measures. For example
the 2023 Group Performance Framework includes:• Making meaningful progress on environmental
sustainability strategies (e.g. fund and facilitate
at least $100 billion by end 2030).
Individual/Divisional performance scorecards also
include sustainability measures as relevant to theparticular business. It is important to note thatGroup/Division performance objectives are notdesigned to capture all of our ESG targets – however
our senior leaders are accountable for ensuring
we focus and achieve ANZ’s Climate Change
Commitment and policies, with regular review
and oversight by the ERBC.

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

12

ANZ 2023 Climate-related Financial Disclosures

STRATEGY

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 throughour strategy; to improve the financial
wellbeing and sustainability ofcustomers through excellent services,
tools and insights that engage andretain them, and help positively
change their behaviour.

Through our purpose we have elevated threeareas facing significant societal challengesaligned with our strategy and our reach:
Improving the financial wellbeing ofour people, customers and communities
by helping them make the most of theirmoney throughout their lives;
Supporting household, businessand financial practices that improve
environmental sustainability; andOverview

Our purpose

TO SHAPE A WORLD WHERE PEOPLE AND COMMUNITIES THRIVE

GovernanceOur strategy

To improve the financial wellbeing and sustainability of customers

Strategy
Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability

Who
we serve

Improving the availability of suitable
and affordable housing options for
all Australians and New Zealanders.

$100b target performance

Help people savefor, buy and own asustainable, liveable andaffordable home

Help people
start or buy andsustainably growtheir business

Help companies movecapital and goods aroundthe region and sustainably
grow their business

Building capability
Customer engagement
Biodiversity
Partnerships and initiatives
Reducing our environmental footprint

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.

We willachieve ourstrategy
through

ESG
focus areas

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

Financial
wellbeing

Environmental
sustainability

Housing

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 ourcustomers and the outcomes we create

Customerexperience

Information
security

Ethics, conductand culture

Risk Management
Metrics and Targets
Appendix
Assurance opinion

13

ANZ 2023 Climate-related Financial Disclosures

Our Climate Change Commitment

To meet the Paris Agreement goals,
significant greenhouse gas emission
reductions are required across all sectors of
the economy. Trillions of dollars are needed
to invest in new and existing technologies
for clean energy and transport, sustainable
food production and resilient infrastructure.1
Our Climate Change Commitment provides theframework to achieve our strategy of transitioning
our lending in line with the goals of the Paris
Agreement. We joined the Net-Zero Banking
Alliance (NZBA) in 2021, reflecting that commitment
and setting pathways2 to support customers’emissions reductions.

The following sections identify opportunities
and report on progress against our key focus
areas relating to our climate ambition.
Our full Climate Change
Commitment is available here.
1. The economic transformation: What would change in the netzero transition, McKinsey & Company, January 2022. 2. Our sectoral
pathways are how we are, over time, steering up to nine of our highest
emitting sectors in our lending portfolio towards the Paris Agreement
goals as part of our commitment to the NZBA.

Governance

To be the leading Australia- and New Zealand-based bank in supporting customers to transition to net zero by 2050

Strategy
Our purpose and strategy

The opportunity
The pathway to net zero emissions presents significant financing opportunities. ANZ has an opportunity toassist customers as they invest in new capabilities, technologies, and assets, provide lower emissions energy
and power, nature positive solutions, or adapt to a less carbon intensive economy.

Our climate ambition
Supporting our customers to transition
Financing sustainability$100b target performance
Building capability
Customer engagement

Our climate change commitment
Provides the framework to achieve our strategy of transitioning our lending in line with goals of the Paris Agreement.

Biodiversity
Partnerships and initiatives

Our Environmental Sustainability Strategy
identifies focus areas, technologies and financing
opportunities to help achieve our climate ambition.
The most important role we can play in the transition
to net zero is to support our customers reduce
emissions and enhance their resilience to a changing
climate. We support an orderly transition thatrecognises and responds to social impacts. This aligns
with our purpose to shape a world where people andcommunities thrive. Supporting household, businessand financial practices that improve environmental
sustainability is a key part of our purpose.

Overview

ANZ’S CLIMATE AMBITION

Reducing our environmental footprint

Our key focus areas to achieve our net zero ambition

Risk Management
Metrics and Targets

Support our customers
to transition

Transition our lending in line withthe goals of the Paris Agreement

Engage constructively andtransparently with stakeholders

Reduce emissions fromour operations

FACILITATED BY…

Our Environmental
Sustainability Strategy

Our riskmanagement approach

Our 'sensitive sector'
Requirements

Industry andproduct expertise

Progressively deepening our staff’s
understanding of climate risks and opportunities

Developing the right internal
culture and mindset

Targets and pathways

Customer engagement

Strategic partnerships

Appendix
Assurance opinion

14

ANZ 2023 Climate-related Financial Disclosures

SUPPORTING OUR
CUSTOMERS TO TRANSITIONANZ has chosen some key focus areas as part of ourEnvironmental Sustainability Strategy:

Banking thedecarbonisation andelectrification of thetransportation value chain

Increasing our
support for thetransition to low
carbonSupporting sustainability
in resource extraction,1
basic materials2 and newtechnologies3

Providing the products
and services required
for transition to a low
carbon economy

Offering solutions to,and partnering with,sustainability-focusedfinancial institutions

Enabling thetransition throughlower emissions
buildings

Assisting sustainable
food, beverage &agricultural practices
and supply chains

1. Supporting sustainable resource extraction in areas such as iron ore, lithium, nickel, cobalt, rare earths, copper and bauxite.
2. Supporting basic materials production including green steel and low-carbon aluminium production. 3. Supporting newtechnology projects focused on upstream hydrogen and carbon capture use and storage.

ANZ has an opportunity to assist
customers as they invest in new capabilities,
technologies and assets, provide lower
emissions energy and power, nature
positive solutions, or adapt to a less carbon
intensive economy. Examples of how weare directing our finance into key focus
areas this year include:

ANZ acted as a Mandated Lead Arranger in the
US$1 billion syndicated debt facilities for Talison
Lithium Pty Ltd’s Greenbushes lithium mine,
located in Western Australia, in October 2022.
Lithium is a critical ingredient for electric vehicle
batteries and other battery storage solutions.

ANZ acted as Joint Sustainability Coordinator,
Mandated Lead Arranger, Underwriter, Bookrunner,and Facility Agent for a $340 million and US$75 million
syndicated sustainability-linked loan in February
2023 for a subsidiary of Frasers Property Limited,a Singapore headquartered multinational real estatecompany across five asset classes: commercial &business parks, hospitality, industrial & logistics,
residential and retail. The sustainability-linked loan
incorporates absolute greenhouse gas emissions
reduction targets across Scopes 1, 2 and 3 emissions.

Van Lier Nurseries is a family-owned business inWest Auckland, growing flowers and indoor plants
in large glasshouses. In 2023 ANZ Bank New Zealand ,through the Business Green Loan and along withother external finance providers, supported Van Lier’s
investment in a low carbon alternative to heating by
replacing the gas heating system with an electric heatpump system. The customer expects that this will
reduce emissions and operating costs for their business.

Overview

In June 2023 ANZ supported the Western AustralianTreasury Corporation with the issuance of its firstgreen bond, a $1.9 billion ten-year transaction.
The terms provide that the proceeds of the green
bond will be used to fund eligible projects including:the expansion of the electrified public transport rail
network, an increase in renewable energy generation(as part of the Western Australian Government’s
commitment to cease State owned coal-fired electricity
generation by 2030), and delivery of a renewablepowered desalination plant.

Governance

Eligible projects are governed by the issuer’s
Sustainability Bond Framework which supports theWestern Australian Government’s commitment todelivering its environmental and social objectives.
ANZ acted as Joint Lead Manager and Joint
Sustainability Bond Coordinator.

Building capability

Strategy
Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability$100b target performance
Customer engagement
Biodiversity
Partnerships and initiatives
Reducing our environmental footprint
Risk Management

Tilt Renewables, one of Australia’s largest renewableenergy generator, refinanced and increased their
syndicated debt facility to $2.6 billion. The refinancing
included the accession of Coopers Gap Wind Farm into
the Tilt Renewables portfolio. Coopers Gap Wind Farmhas 123 turbines and is one of the largest operational
wind farms in Australia with a nameplate capacity of
453MW. ANZ acted as a Joint Mandated Lead Arranger.

ANZ provided a $40 million secured loan facility toa subsidiary of listed transport provider and tourism
operator, the Kelsian Group Limited in August 2023
for the procurement of zero emission electric buses.
The buses support Kelsian’s contribution to NSW’s zero
emissions bus commitment, which is expected to see thepublic bus network for Greater Sydney fully transitionedby 2035 and outer metropolitan regions by 2040.

Metrics and Targets
Appendix
Assurance opinion

15

ANZ 2023 Climate-related Financial Disclosures

SUPPORTING OUR CUSTOMERS TO SHIFT TO
LOW CARBON BUSINESS MODELS AND OPERATIONS
Overview
Governance

ANZ is supporting our customers’transition to net zero and nature
positive outcomes, including
through the following labelled
and other financing products
and services:$

Strategy¢

Our purpose and strategy

Our Institutional Sustainable Finance team is
helping our customers by encouraging them toidentify climate and nature-related risks (including
biodiversity loss) and opportunities. The teamis financing and facilitating the deploymentof capital into green, social and sustainability
initiatives, for example where borrowers are
required to use the proceeds of a loan toinvest in eligible green and/or social assets

Our climate ambition

We are supporting our Commercial customers
to invest in improvements in their energy
efficiency through our Energy Efficient Asset
Finance Program provided jointly with the
Clean Energy Finance Corporation (CEFC)
Refer to page 18

Supporting our customers to transition
Financing sustainability$100b target performance
Building capability
Customer engagement
Biodiversity
Partnerships and initiatives
Reducing our environmental footprint

Refer to page 16
Risk Management
Metrics and Targets
CO2$

Appendix
Assurance opinion

Our New Zealand business is supporting
smaller business and retail customers
to implement sustainable initiatives
Refer to page 19

We also support our customers’ sustainability
ambitions through unlabelled financing products
and services, such as relationship lending, projectand export finance, asset finance, loan syndication,
advisory and markets solutions

Our Environmental Markets team is building
capability to help customers by facilitating accessto the carbon credit ecosystem, connecting
demand, supply and trading of carbon credits
Refer to page 18

Refer to page 17

16

ANZ 2023 Climate-related Financial Disclosures

FINANCING
SUSTAINABILITY
Sustainable Finance

ANZ’s Sustainable Finance team in
Institutional is helping our customers by:encouraging them to identify climate
and nature-related risks (including
biodiversity loss) and opportunities,
and financing their transition plans
and sustainability strategies.
Customer demand for labelled sustainablefinance1 products and services remainedsound this year. Our customers continue toseek labelled sustainable finance which aligns
with their sustainability objectives as they shift
to low-carbon business models and direct
capital into measures aimed at responding toenvironmental and social issues. Nevertheless,sustainable finance has not been immune tothe slowing of the global economy as central
banks raised interest rates.
As the sustainable finance market evolves andthe market’s initial focus on climate broadens
to encompass other themes, there is further
development in financing formats. Following
the establishment of the Orange Bond Principles,
ANZ led the market’s inaugural, orange-labelledbond aimed to mobilise gender-lens investing,2evidencing the continued innovation in thesustainable finance market.

1. Labelled sustainable finance is existing banking products witha specific sustainability related label. 2. Refer to the Orange Bond
Principles for further information. 3. Of the 111 sustainable financedeals we participated in, $7.9 billion was attributed to ANZ via our
distribution capability, and $8.2 billion via on-balance sheet loans
and other credit lines. 4. Numbers do not add to $144 billion due
to rounding.

Overview
GovernanceDuring 2023

We participated in 111 sustainable financedeals with a total deal size of $144 billion,3compared to 127 deals with a total deal
size of $155 billion in 2022:

Sustainable finance total deal size
over time ($b)
Total deal size
$144 billion4

Supporting our customers to transition
155

$22 B
$10 B

(35 deals) from
Australia

140$30 billion (25 deals) fromDiversified Industries$29 billion (11 deals) from Food,
Beverages and Agriculture$39 billion (38 deals) from Financial
Institutions Group$7 billion (16 deals) from Property
and Health(23 deals) fromNew Zealand$38 billion (21 deals) from Resources,
Energy and Infrastructure

Our purpose and strategy
Our climate ambition

180
160

deals) from$112 B (53International

Strategy

144

119

120

60

$100b target performance
Building capability
Customer engagement

100
80

Financing sustainability

Biodiversity
Partnerships and initiatives

59

Reducing our environmental footprint

40
20

Risk Management

0
2020

2021

2022

2023

Metrics and Targets
Appendix
Assurance opinion

17

ANZ 2023 Climate-related Financial Disclosures

We are focused on continuing to identify
opportunities to support our customers’
path to net zero emissions and enhancetheir resilience to a changing climate.
Some examples of labelled products
we provide include:
Green, Social and Sustainability Loans
Lending to deploy capital into green, socialand sustainability initiatives, where borrowers
are required to use the proceeds of the loan toinvest in qualifying green and/or social assets.
HIGHLIGHT

SK Battery America Incorporated
In June 2023, ANZ participated in a US$280 million
syndicated green loan for SK Battery America Inc.
Proceeds of the loan will be used for refinancing
and capital expenditure for the borrower’s electricvehicle battery plant. The borrower is part ofSouth Korean group SK On, which is focused on
manufacturing electric vehicle batteries, energy
storage systems and battery-as-a-service capacity.
ANZ acted as Sole Mandated Lead Arranger andBookrunner, Green Structuring Advisor andAdministrative Agent.

Sustainability-Linked Loans

ESG-format bonds

Lending which incentivises the borrower’s
achievement of ambitious, predeterminedsustainability-related performance targets.
HIGHLIGHT

Distribution of capital into green, social andsustainability initiatives, e.g. green buildings,
renewable energy or where bond terms are linked
to improved performance against predeterminedsustainability performance targets.

Wellington International Airport Limited

HIGHLIGHT

Wellington International Airport Limited (“WIAL”)
announced the successful conversion of NZ$100
million of existing bank facilities into sustainabilitylinked loans in March 2023, creating direct financial
incentives by aligning lower interest rates withmeeting agreed sustainability targets. This is the firststep in WIAL’s sustainable finance journey, and oneof the first sustainability-linked loans for the airport
sector in New Zealand. ANZ acted as lender andSustainability Coordinator.
HIGHLIGHT

KMD Brands Limited
KMD Group refinanced its syndicated debt facilities
into NZ$310 million equivalent sustainability-linked
facilities, including guarantee lines in May 2023. The
facilities featured updated sustainability targets of
the KMD Group including reducing greenhousegas emissions, continued B Corp certification, andimproving transparency within its supply chain.
ANZ acted as Sole Sustainability Coordinator, Sole
Mandated Lead Arranger & Bookrunner, Facility
Agent, and Security Trustee.

Meridian
In March 2023, ANZ acted as Sole Green
Bond Coordinator, Joint Arranger and Joint
Lead Manager for Meridian’s inaugural NZ$200m
green bond issue. The proceeds of the bond willbe allocated to finance or refinance sustainableprojects and assets such as new or existing
renewable energy projects or assets.

Overview

Supporting customers’sustainability ambitions
We also support our customers’ sustainability
ambitions through unlabelled financing products
and services.

Recent examples of unlabelled transactions include:

Reducing our environmental footprint

Impact Investment Exchange IIX

CIMIC Group Limited

The Women’s Livelihood Bond Series leverages
innovative financial instruments to advance genderequality at scale. ANZ has been involved in all fivebond issuances totalling more than US$120 million.

Our purpose and strategy
Our climate ambition

HIGHLIGHT

The structure securitises a portfolio of loans toenterprises that are deemed to have a positive
impact on women’s livelihood and may nothave access to international capital markets.
The Bond’s proceeds are intended to support
approximately 280,000-300,000 women acrossAsia and Africa to transition to more sustainable,
climate-resilient livelihoods.

Strategy‘Unlabelled’ refers to our existing banking
products and services where no specificsustainability related label is applied. In our
Institutional business, some examples of ways
in which we support our customers are: providing
relationship or structured lending or other banking
solutions to customers to finance or facilitate things
like green buildings, renewable energy, energy
efficiency, or sustainable infrastructure.

HIGHLIGHT

In December 2022, ANZ led the inaugural
US$50 million four-year Women’s Livelihood Bondfor Impact Investment Exchange (IIX), the world’s
first sustainable debt issued under the Orange
Bond Principles which aims to mobilise gender-lensinvesting under an orange-labelled asset class.

Governance

In March 2023, ANZ acted as joint mandated
lead arranger in the construction financing for the
Glenrowan Solar Farm – the first renewables projectsponsored by Pacific Partnerships, a subsidiary of
CIMIC Group Limited.
The solar farm is located in the township ofGlenrowan in Victoria’s Central North Renewable
Energy Zone. The project has a long-term, 10-year
power purchase agreement with the Victorian
Government, which will assist the State in achieving
its legislated renewable energy targets of 40 per centby 2025 and 50 per cent by 2030.
Supporting transactions like this aligns with
our Environmental Sustainability Strategy andcontributes towards our $100 billion socialand environmental sustainability target.

Supporting our customers to transition
Financing sustainability$100b target performance
Building capability
Customer engagement
Biodiversity
Partnerships and initiatives

Risk Management
Metrics and Targets
Appendix
Assurance opinion

18

ANZ 2023 Climate-related Financial Disclosures

HIGHLIGHT

Schroders Greencoat LLP
ANZ acted as Sole Arranger and lender for Greencoat
UK Wind PLC, a renewable infrastructure fundinvested in UK wind farms, managed by Schroders
Greencoat LLP, with a structured financing solutionof GBP 150 million 3 and 5-year term facilities andassociated interest rate hedging.
As at August 2023 Greencoat UK Wind’s portfolio
comprises interests in approximately 48 operating
wind farms located across England, Scotland,
Northern Ireland and Wales. The company provides
investors with the opportunity to participate directlyin the UK’s energy transition across a diversified
operational portfolio.
HIGHLIGHT

Longroad Energy Holdings LLC
In December 2022, ANZ acted as Joint Lead
Arranger in a US$680 million Clubbed Financing
Package for the development of Longroad Energy’s,
215MW Solar PV and 215MW Battery Storage Project
located in Arizona, United States of America.
Longroad Energy is a U.S based renewable energy
company and majority owned by ANZ customers
Infratil and NZ Super. The group is focused on
development, ownership, and managementof wind, solar and storage projects throughout
North America, with over 4GW of renewablecapacity developed and acquired since inception.

HIGHLIGHT

Environmental Markets
There is increasing demand for carbon credits to
help mitigate hard-to-abate emissions. Concurrently,
there is an increasing demand from customers
for guidance navigating emerging issues, suchas nature, including biodiversity.
ANZ acknowledges the pivotal role banks can servein these markets. Responding to this, in mid 2022,
ANZ introduced the Environmental Markets line ofbusiness – a joint initiative between our Corporate
Finance and Markets businesses.
Presently, the Environmental Markets team isbuilding our capability to support customers,
with an emphasis on carbon markets.
The Environmental Markets team is working tohelp relevant stakeholders bring high quality
carbon credits to market and streamline carbon
trading. The team is also supporting customers
to devise innovative carbon credit acquisition
strategies. Drawing upon ANZ’s broad expertise,
the team is collaborating with conventional productsectors, such as Loans, Trade and Markets, as well as
Corporate Advisory, Digital Assets and ANZ's own
equity investment capabilities.
Our partner Pollination worked in close collaboration
with our Environmental Markets team in providing
advice and support on the end-to-end businessdevelopment opportunity across environmental
markets, carbon credits and nature-based projects.
The work also included delivering a series of internal
training sessions for Institutional staff on nature,environmental markets, and carbon credits.

GrolloThis year the Environmental Markets team partneredwith Grollo Carbon Ventures (GCV) to successfully
trade tokenised Australian Carbon Credit Units(ACCUs).1 The transaction was concluded incollaboration with ANZ's Digital Assets Services teamas part of the Central Bank Digital Currency pilot
run by the Reserve Bank of Australia and the Digital
Finance Cooperative Research Centre. As part of
the transaction, ANZ tokenised existing ACCUs
and issued its stablecoin, A$DC, enabling GCV
to purchase tokenised ACCUs with settlement
occurring in near real-time via ANZ smart
contracts on a public, permissionless blockchain.

ANZ/Clean Energy FinanceCorporation (CEFC) Energy Efficient
Asset Finance Program
For over five years ANZ has been working with the
CEFC to support Australian businesses to invest inemission reducing infrastructure that will be resilient
to a changing climate. Under the program, ANZ and
the CEFC each contribute 0.25 per cent towards a 0.5
per cent interest rate discount to eligible customers
for loans up to $5 million to invest in a broad rangeof activities or assets that meet the program criteria,
for example renewable energy to energy efficientand precision agricultural equipment, recycling
technologies and electric vehicles.
The program enables customers to use discounted
clean energy finance to reduce their costs at thesame time as meeting community expectations
around improving sustainability.

1. Australian Carbon Credit Units (ACCUs) are issued by the Australian Government’s Clean Energy Regulator to projects compliant with approved methodologies for emissions avoidance, reduction or removal.

Since its launch in 2017, this program has helped
finance more than $279 million of investment
in 1,240 clean energy technology deals for our
Commercial and Agribusiness customers.
2023: 216 deals, $35.7M volume

Overview
Governance

Strategy
Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability

Total deal size
$35.7 million$100b target performance
Building capability
Customer engagement
Biodiversity
Partnerships and initiatives$21.6 million
EV/PHEV deals$10.0 million
Energy efficiency deals

Reducing our environmental footprint$1.8 million
Solar deals$2.3 million
Recycling deals

Risk Management
Metrics and Targets

HIGHLIGHT

Appendix

Tandy Group

Assurance opinion

Tandy Group is a customer involved in adiverse range of operations including concrete
manufacturing, transport and the supply of potablewater in Queensland. The Group has benefitted froma loan under the ANZ/CEFC loan discount program,which enabled them to upgrade equipment at theiraggregate concrete crushing site to both improve
productivity and reduce fuel consumption from
2.5 litres to 0.7 litres per tonne.
“Sustainability can generate a profit by doing the rightthings with the environment and with your people.”
Tandy Group’s Chief Executive Officer Mitchell Florsaid. “Sustainability also drives innovation, andinnovation is one of the keys to sustainability.”

19

ANZ 2023 Climate-related Financial Disclosures

Overview

Smaller Business and Retail Products(New Zealand)
ANZ Bank New Zealand Limited (ANZ
Bank New Zealand) has seen growth in thenumber of New Zealand customers usingbusiness and retail lending products to
reduce their carbon footprint and improvetheir home’s health and energy efficiency:• Our Good Energy Home Loan top up isavailable to existing eligible1 home loancustomers to upgrade their homes withsolar panels, heating and insulation, double
glazing, ventilation systems or rainwatertanks. It can also be used for electric andhybrid vehicles, electric bikes, and electricvehicle chargers. It allows customers toborrow up to NZ$80,000 at a 3-year fixedinterest rate of 1 per cent per annum.
• Our Healthy Home Loan Package offersinterest rate discounts and fee savings for
eligible2 customers who are buying, building,renovating or already own a home with a
6 Homestar rating or higher.
Across the two products since October 2020,
8,091 households drew down the loans, foran aggregate amount of NZ$372.7 million.3• Our Business Green Loan is available for
eligible4 business customers to finance(or refinance) renewable energy initiatives,
green buildings, native planting or
sustainable land and water use to make apositive environmental impact. Launched inlate August 2022, eligible businesses are able
to borrow up to NZ$3 million at a discounted
rate. This year, we extended the Loan toinclude clean transportation and pollution
prevention and control. In 2023, 96 Businessand Agriculture customers accessed morethan NZ$30.3 million to reduce emissions
or improve sustainability.

Governance• In July this year we also launched a new
low-interest ANZ Business Regrowth Loanin New Zealand aimed at those in need offinance following extreme weather events.
Customers can use the loan for recovery costs
to help with repairing or replacing damaged
assets and property, or to improve theirbusiness' resilience to future events. An initial
NZ$250 million has been allocated and as
at 30 September 2023, NZ$18.8 million had
been lent to 98 eligible customers. Initiallyavailable for those impacted by the 2023
North Island weather events, the loan will be
extended to support existing ANZ businessand agriculture customers impacted by futureclimate-related events such as cyclones,
flooding and droughts.

Partnerships and initiatives

1. ANZ Good Energy Home Loan. 2. ANZ Healthy Home Loan Package. 3. Funds under management. 4. ANZ Business Green Loan.

Strategy
Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability$100b target performance
Building capability
Customer engagement
Biodiversity
Reducing our environmental footprint
Risk Management
Metrics and Targets
Appendix
Assurance opinion

20

ANZ 2023 Climate-related Financial Disclosures

New $100 billion social and environmental
sustainability target
On 31 March 2023 ANZ concluded its $50 billion
by 2025 sustainable solutions target. We had
funded and facilitated close to $47.0 billion1 across
387 transactions and were forecast to meet our$50 billion target well in advance of 2025. Refer
to Appendix 6 on page 85 for details.
Therefore, on 1 April 2023 ANZ commenced a newsocial and environmental sustainability target tofund and facilitate at least $100 billion by the end of2030 in social and environmental outcomes throughcustomer activities and direct investments by ANZ.
The target applies to the ANZ Group and includes
initiatives that help lower carbon emissions, protect
nature and biodiversity, increase access to affordable
housing and promote financial wellbeing.

Under this target, we have funded and facilitatedapproximately $8.8 billion across 54 transactions.
This includes green, social, sustainability andsustainability-linked loans and bonds, and energy
and affordable housing transactions. Of these,$4.1 billion of transactions are on-balance sheet loans
and other credit lines provided to borrowers by ANZ,
while close to $4.7 billion has been facilitated –almost entirely through ESG-format bonds.
The majority of transactions included in the newsocial and environmental sustainability target to datewere funding for sustainability-linked facilities, energy,
affordable housing and green buildings (66%, 13%,
10% and 5% of funded transactions respectively)
and facilitation of ESG-format bond issuances.
Since 2015, we have achieved $74.9 billion insustainable funding and facilitation over threesustainability targets. ANZ achieved $19.13 billion

on our $15 billion target, close to $47.0 billion on
our $50 billion target and approximately $8.8 billion
on our $100 billion target so far.
We include both customer transactions and direct
investments by ANZ towards the $100 billion socialand environmental sustainability target. Customertransactions can be either unlabelled social andenvironmental sustainability activities or labelledsustainable finance transactions that are alignedwith any of the 17 United Nations Sustainable
Development Goals (SDGs). This recognises theimportance of supporting sustainability andincreasing demand from customers across more
SDGs including those covering social issues,
nature and biodiversity. Our detailed Social andEnvironmental Sustainability Target Methodology
is available at anz.com/esgreport.

Progress towards our $100b social and environmental sustainability target
13% SOCIAL

Funded 2$4.1 billion

21% ENVIRONMENTAL$0.4 billion Affordable Housing$0.5 billion Energy$0.09 billion Other Social$0.2 billion Green Building

Facilitated3$4.7 billion$0.04 billion Transport$0.08 billion Waste

66% SUSTAINABILITY-LINKED

100% $4.6 billion

ESG-format Bonds

0%$2.7 billion Sustainability-Linked Facilities$0.005 billion
Affordable Housing

HIGHLIGHT

Overview
Governance

ANZ’s SDG bond program
ANZ Group Treasury’s capital and funding strategy
includes SDG bond issuance which support our
ambition to finance our customers' green, social andsustainability initiatives. ANZ’s SDG Bond Framework
sets out a wide range of eligible loans that support
specified use of proceeds in alignment to selected
United Nations’ SDGs. The ANZ SDG Bond
Framework is in line with the International CapitalMarket Association (ICMA) Green Bond Principles,
Social Bond Principles and Sustainability Bond
Guidelines, at the time the framework was released.

Strategy

An amount equal to the proceeds raised from theSDG bonds is used to finance or refinance a poolof ANZ loans and expenditures that promote theapplicable SDGs. Since inception, the eligible asset
pool has increased from $1.5 billion to $9.2 billion,4highlighting ANZ’s ongoing effort to fund andfacilitate lending aligned to the SDGs.

Partnerships and initiatives

Since ANZ’s inaugural SDG bond in February
2018, ANZ has issued five SDG Bonds totalling
approximately $6.8 billion equivalent.

Appendix

Consistent with our purpose, ANZ’s intent is to
issue SDG bonds as part of its capital and funding
strategy, subject to market conditions. This is tosatisfy investor demand and maintain access to adiverse investor base across global capital markets.
access to global capital markets.
	
Refer to ANZ’s SDG Bond Use of Proceeds
and Impact Reports for further details,
available on our Debt Investor website
anz.com/debtinvestors/centre/greensustainability-bonds/

1. This number is a restatement from our 2023 Half Year unaudited disclosures made on 5 May 2023 when the $50 billon target was closed after reaching $47.09 billion; the closing audited balance has since been confirmed as $46.99 billion. 2. For more information on funded categories see
ANZ's Social and Environmental Sustainability Target Methodology. Numbers do not add to $4.1 billion due to rounding. 3. For more information on facilitated categories see ANZ's Social and Environmental Sustainability Target Methodology. Numbers do not add to $4.7 billion due
to rounding. 4. Eligible asset pool as at 31 March 2023.

Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability$100b target performance
Building capability
Customer engagement
Biodiversity
Reducing our environmental footprint
Risk Management
Metrics and Targets

Assurance opinion

21

ANZ 2023 Climate-related Financial Disclosures

BUILDINGCAPABILITY
Mindset 2030
We are putting programs in place to allow ouremployees 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 ourcustomers to shift to low carbon business models
and operations. The information is supported byresearch and industry insights.
In 2023 we re-designed and updated the learning
program to: ‘ESG@ANZ – Mindset 2030’ to coverbroader ESG topics. The updated program comprises
10 learning modules, with seven released thisyear. More than 4,300 people have commenced
the learning program, with more than 8,800
modules completed.

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 tolearn 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 forearly 2024 for our Executive Leadership team.

Supporting our bankers
We are also seeking to equip certain of ouremployees with a deeper understandingof 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:

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 Customer Transition to Net Zero

1. Transactions involving our Institutional and Corporate customers.

• 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 engagementwith our largest emitting business customers.
• 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 areapplied in practice is important for the effective
management of the social and environmental

risks associated with lending to our large
business customers.1 Our training focuses on the
Policy, Requirements for sensitive sectors andour approach to human rights. This training is
mandatory for new employees authorised to makecredit decisions relating to large business customertransactions. See page 37 for further details
on our Social and Environmental Risk Policy.

Overview
Governance

Strategy
Our purpose and strategy
Our climate ambition• Training sessions have been provided to bankers
required to complete the newly digitised Climate
Change Risk Assessment (CCRA). Training ourbankers on the CCRA tool is critical to embedding
it and driving effective customer engagement andanalysis. Refer to page 39 for more information on
our CCRA tool.

Supporting our customers to transition• 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 andawareness of the risks and opportunities involved
with on-farm carbon projects. This training isavailable to all ANZ staff.

Partnerships and initiatives• We began building the capability of ourInstitutional frontline staff on nature including
biodiversity which we consider critical tosupporting 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 biodiversity.

Appendix

Financing sustainability$100b target performance
Building capability
Customer engagement
Biodiversity
Reducing our environmental footprint
Risk Management
Metrics and Targets

Assurance opinion

22

ANZ 2023 Climate-related Financial Disclosures

ENGAGING WITH OURLARGEST 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:• Focusing on our absolute 100 largest emitting
business customers.2 Our target is that by the endof 2025, compared with their starting point, morecustomers achieve a ‘well developed’ or ‘advanced’
rating for their low carbon transition plans.

Setting higher standards for ourcustomers’ plans

Continuing to manage our exposures
to customers with less developed plans

We are setting higher standards for our customers’plans, by applying a more challenging assessment
framework. Our upgraded framework includes:

We will also continue to seek improved plans from
‘Category C’ and 'Category D’ customers by the endof 2025 or we will likely reduce our exposure tothem. Any customers rated 'C' or 'D' in 2024 that areincluded for the first time as part of our new phaseof engagement will need to improve their plans by
the end of 2026. Refer to table on page 24 fortransition plan categories.

• increased focus on our customers’ progressdelivering their transition plan targets, including
whether customers are ‘on track’ (or ‘almost on
track’)3 with their emissions targets; and• encouraging customers to obtain at least limited
third-party assurance of emissions performanceand targets.

• Upgrading our assessment of progress byapplying a more challenging framework.

We continue to seek TCFD aligned disclosures fromthese customers.

• Extending the use of our Climate Change Risk
Assessment (CCRA) methodology to guideour bankers and assist their discussions withcustomers, so that by the end of 2024, it has beenused to support our engagement with the 100
largest emitting business customers cohort.

See page 24 for more detail about our upgradedcustomer transition plan assessment framework.

Our engagement is focused on exploring ways inwhich our customers can improve their transition
plans, which may be facilitated by our financing
solutions, including via our $100 billion social andenvironmental sustainability target discussed on
page 20.

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.

Upgraded climate risk tool

Overview

We are also extending the use of our upgraded
CCRA tool to a wider customer cohort as shownin the diagram below. The CCRA includes anassessment 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 understanding how our customers aremanaging and disclosing their nature-related risks,
including biodiversity loss, see page 39 for moredetail on the CCRA.

Governance

Strategy
Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability$100b target performance
Building capability

CCRA SCOPE

Customer engagement

6

Biodiversity
FY25

FY24

Partnerships and initiatives
Reducing our environmental footprint

Our 100 largest emitting business customers
FY23

Risk Management

Safeguard Mechanism7

Metrics and Targets

100 ofour largest
emitters

Large emitters in
sectoral pathways8
Other large emitters9

We anticipate that by the end of 2025 we will
have undertaken enhanced customer engagementwith customers responsible for around 60%
of our estimated Institutional credit customer
portfolio emissions.5

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 climate targets. 2. Our 100 largest emitting business customers were identified from: (a) a list of customers who were part of the previous phase of our engagement program, had operational control over or a major financial stake in any Safeguard Mechanism facility or were included inour sectoral pathway targets; plus (b) those customers that ANZ has otherwise identified as large emitters for the purpose of our customer engagement. We also assessed whether the customer met specific credit limit thresholds and had an ongoing relationship with ANZ. Subsequently, the customers
on this list were ranked by emissions from highest to lowest, encompassing Scope 1 and 2 emissions for all customers and Scope 3 emissions for Coal, Oil & Gas, and Mining Infrastructure customers. The top 100 customers with the highest emissions were identified as our 100 largest emitting businesscustomers for our new phase of engagement. Note the determination of our 100 largest emitting business customers was based on the data and information as at the time of the analysis in August 2023. ANZ expects that this group of customers will comprise the LEEP group for the target period, notingthat additional customers may be added if a customer in this group ceases its relationship with ANZ or if engagement for some other reason is not practical. 3. References CDP’s definitions for determining target tracking performance: On track: Actual emissions in the most recent reporting year are
below expected emissions under the stated target on a linear reduction path. Almost on track: Actual emissions in the most recent reporting year are at most one year behind the emissions reduction under a linear reduction path. 4. Determined primarily by assessing the size of Scope 1 and 2 emissions
for all customers and Scope 3 for Coal, Oil & Gas and Mining Infrastructure customers. Our assessment of which customers to include will also consider whether the customer meets specific credit limit thresholds and had an ongoing relationship with ANZ. 5. Includes Scope 1 and 2 (location based) of
ANZ’s Institutional credit customers who are ultimate group parents (where possible) with a material credit limit (either through group or subsidiary level). We excluded customers within Project Finance, Financial Institutions, Public Sector, and other customer segments such as services and education,
which typically have lower emissions. 6. Climate Change Risk Assessment (CCRA) is an online tool that is used to help guide customer engagement and assess and manage climate-related risks of certain customers in Institutional, including our 100 largest emitting business customers. 7. Additional
Safeguard Mechanism customers where ANZ is not currently engaging on their transition plans (excluding those to whom ANZ’s exposure is considered immaterial). 8. Remaining large emitters in sectors for which we have pathways, focusing on the most material exposures. 9. Any remaining material
corporate exposures in carbon-intensive sectors such as large agribusiness, or chemical manufacturers.

Appendix
Assurance opinion

23

ANZ 2023 Climate-related Financial Disclosures

Our progress with 100 of our largest
emitting business customers under our
previous phase of engagement (2018to 2023)

categories, we observed that many customers have
improved their governance, strategies and targets
or disclosures, which we consider is leading to an
improved level of transition planning.

In 2021 we set a target to engage with 100 of ourlargest emitting business customers, to encouragethem 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 plans for these customers into
four levels of maturity – advanced, well developed,
underdeveloped/starting out, and no public plans.
Low-carbon transition plans are typically re-assessedby ANZ annually, with engagement occurring
throughout the year.

This is a positive step change over the period
since 2021, as our customers continue to build
their transition capacity. For example, while manycustomers already had targets in place, based on
our assessment framework, we have observed a‘strengthening’ in approach, including a rise in theintention to develop ‘Paris-aligned’ or ‘science-based’
targets and in those intending to report under the
TCFD framework or taking steps towards improving
disclosure. However, in the past 12 months there
has been mostly incremental progress on company
ambition and long-term targets. From ANZ’s
perspective, this means that, based on our assessment
framework, no further customers have been
upgraded to an ‘A’ in 2023. We have also observed
companies in some cases making insufficient progresson short term targets, diversification strategies andcapital allocation. This is why we are focusing moreclosely on whether customers are ‘on track’ with theirtargets in 2024 and 2025.

Over the course of our engagement with 100 of
our largest emitters since the 2018 calendar year,
customers continued to value our engagement andperspectives on this topic. This included several
customers outside of the cohort who sought toengage with us, seeking clarity on our expectations,or requesting suggestions to improve their approach.
For those customers starting out, we provide insights
into enhanced customer practices we have observed
through our customer engagement.
Where customers are further advanced, we
encourage them to find ways to strengthen theirapproach and provide options for how we could
potentially assist. This included, where appropriate,setting ‘stretch’ targets linked to improved financing
terms in the form of sustainability-linked lending.
Within each industry, our customers have different
starting points. Since the initial maturity assessment
in 2021 when we started grouping plans into ‘A to D’

Our discussions in this context are typically led byour bankers and can include senior executives from
ANZ and our customers. Where a customer remains
in the ‘no public plan’ category, or in situations where
there is a continued misalignment in approachcompared with ANZ’s expectations, we will consider
the most appropriate actions on a customer-bycustomer basis. In 2023 there was an encouraging
response from several 'Category D' customers, withseven customers upgraded to a ‘C’ after taking steps
to improve elements of governance, targets oremissions reduction plans, or disclosure.

Over the course of our engagement with ourcustomers, there have been instances where we
declined finance or have reduced limits to customers
that have less developed plans or a misalignment
with our expectations. These decisions were madehaving regard to our Climate Change Commitment
and Social and Environmental Risk Policy.
Overall, our engagement with 100 of our largest
emitting business customers has progressed wellthis year – we have completed discussions with all
100 on their progress in enhancing their low carbon
transition plans and efforts to protect biodiversity.

64% of customers now have transition plans that
we consider to be well developed or advanced
versus 42% in September 2021. This means wewere on track to meet our public target for morecustomers to achieve this level of maturity in theirplans by the end of 2024 from our 2021 baseline. In
this context, along with rising investor expectations
and regulatory focus, in addition to the Safeguard
Mechanism reforms, it is timely to intensify our
focus on our absolute 100 largest emitters where
we consider we are likely to have our mostsignificant impact.

Overview
Governance

Strategy
Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability$100b target performance
Building capability
Customer engagement

100 of our largest emitting business customers – by transition plan category

Biodiversity

50

Partnerships and initiatives

38

40
30
20

23 23

Reducing our environmental footprint

41
36

32

Risk Management27

27

Metrics and Targets

22

Appendix

15

11

10

Assurance opinion

4

0

A
Sep 2021

B
Sep 2022

C

D

Sep 2023

Customer transition plan categories: A – Advanced

B – Well developed C – Underdeveloped/starting out D – No public plans

24

ANZ 2023 Climate-related Financial Disclosures

Customer ratings movements in 2023
In 2023 we upgraded our assessment of nine customers – seven from 'D' to 'C' and two from 'C' to 'B'.
We also replaced two customers in the cohort during the year, one replacing a ‘B’ rated customer andone at a ‘C’. When we completed our assessment of the ‘new’ customers’ plans in 2023 we rated themat the same level as the customer they replaced.

We have four transition plan categories under our upgraded assessment framework to be applied
from 2024:
A – Advanced B – Well developed C – Underdeveloped/starting out D – No public plans
Illustrative examples of characteristics of customers within these categories are shown below
Category A

Governance

1
38

2

1

1

7

Stronggovernance inplace to manage
climate risk

Category B
Public climatechangecommitment

Category C
Sustainability
and climate risk
discussed withsenior leaders

Category D
Acknowledges
the need todevelop atransition plan

Acknowledges
climate risk is amaterial risk andopportunity

24

23

Governance

Strategy
Our purpose and strategy

The chart below shows the number of customers in each category and the movements from 2022
to 2023.
1

Overview

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

4
A
Retained

B
Upgraded D to C

Upgraded C to B

C
Replaced inTargets

D
Replaced out

Disclosematerial Scope
3 emissions

We consider a robust low carbon transition plan has three key elements:1
GovernanceA framework outlining Board and senior management accountability
and oversight of management of climate change risks and opportunities.

Targets & Policies

Public greenhouse gas emission reduction targets which typically run up to 2030
that are “Paris-aligned” and cover the highest emitting parts of their business.
Company policies or statements setting out long-term goals, including
whether they support or commit to achieving net zero emissions by 2050.

Public Disclosures

Decarbonisation
trajectory is on
track for Scope 1
and 2 "Parisaligned" targets

Incorporates
climate change
performance
into executive
remuneration

Disclosures

TCFD-aligned
reporting“Paris-aligned”
2030 emissions
reductions
targets for
scope 1 & 2
Note: Energy customers
will need to achieve atleast a 'B' by end 2025
and also disclose:• Material scope 3
emissions and any
progress towards
reducing those emissions• How company strategy,
targets and planned
capital expenditureis aligned with theParis goals

TCFD-aligned
reportingPublic reporting aligned with the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations, or comparable framework(s).

1. The descriptions in the above table are illustrative only. For details about the type of information we expect to see in our customer transition plans in each category (A, B, C and D), please refer to the table to the right on this page.

Has targets
to reduce‘emissions
intensity’ acrosssome ofits operations

No public
targets or otherplans to reduce
emissions
Developing
sustainability
projects
Developing
sustainability
framework

Movingtowards
TCFD-aligned
reportingHas not
reportedagainst TCFD

In place/met

In progress

Risk Management
Metrics and Targets
Appendix
Assurance opinion

25

ANZ 2023 Climate-related Financial Disclosures

BIODIVERSITY
A key target of the Kunming-Montreal Global
Biodiversity Framework is the ‘30 by 30’ target,
which is to ensure the effective conservation andmanagement of at least 30 per cent of the world’s
lands, inland waters, coastal areas, and oceansby 2030.
The release of the Australian Government’s 5-yearly
State of the Environment report, released in 2021,
confirmed the general outlook for our environmentis deteriorating with biodiversity in decline and anincrease in Australia’s number of threatened species.
In this context, the introduction of the Nature Repair
Market Bill, under the Nature Positive Plan, is
designed to make it easier for companies andother businesses to invest in and drive nature
repair across Australia.

Biodiversity or Nature?
Currently ‘biodiversity’ and ‘nature’ terminology
is often used interchangeably by policy makers,
regulators and market participants. The TNFD,1
considers ‘nature’ as the natural world, with anemphasis on the diversity of living organisms(including people) and their interactions among
themselves and with their environment. The
TNFD defines ‘biodiversity’ as the variability
among living organisms from all sources,
including, inter alia, terrestrial, marine andother aquatic ecosystems and the ecologicalcomplexes of which they are part; thisincludes diversity within species, between
species and of ecosystems.

Further the Taskforce for Nature-related
Financial Disclosures (TNFD) released their final
recommendations in September this year – which
we are taking steps towards in this report – see page
79 for our TNFD Index which demonstrates this.

Our role
Historic levels of investment and lending will beneeded from business, governments and financial
institutions to deliver on the changes needed to halt
and reverse the loss of nature, including biodiversity.
This creates significant opportunities for ANZ tohelp support our customers to achieve naturepositive solutions.

ANZ considers biodiversity a key pillar of how
broader impacts on nature are managed. We
consider nature to cover living and non-living
aspects such as climate, air, water, soil, minerals,
plants, animals (including people), biodiversity
and the interaction between each of these
aspects. As the understanding of biodiversity
and nature matures externally and internally,
we will consider alignment with the TNFD
definitions of nature and biodiversity across
our policies and frameworks.

1. Taskforce on Nature-Related Financial Disclosures – Glossary, September 2023.

Understanding nature risks and opportunities,
including biodiversity loss, will enable the Groupover time to better understand, measure andmanage its exposure to nature risks and provide
support to customers wanting to adopt naturepositive solutions.
We acknowledge the need to protect andrestore biodiversity and mitigate biodiversity
loss including as a result of species extinction
or decline, ecosystem degradation and nature loss.
We seek to understand the impacts – positive andnegative – our large business customers can haveon biodiversity and the impacts that biodiversity
loss may have on the customer. We recognise thecontribution we can make by working with ourcustomers to understand risks and opportunities
posed by their business operations and how they
manage their impacts.
We recognise that we are at an early stage ofunderstanding nature-related risks, including
biodiversity loss, on the Group and our customers.
We have had certain sensitive sector policies in place
for some time such as Water (see page 37 of our Risk
section). However, we recognise that 'nature’ and its
associated risks, is complex and multi-faceted. For
example, no two ecosystems, areas of habitat or
species populations are alike. For this reason, there
is no single metric for measuring nature related risks.
It is a multi-disciplinary area, requiring a new typeof capability.

We have identified four key focus areas inrelation to nature risks including biodiversity
loss and opportunities at ANZ:
policies and processes;

Overview
Governance

Strategy
Our purpose and strategy

customer engagement;

Our climate ambition
Supporting our customers to transition
Financing sustainability

upskilling our staff; and$100b target performance
Building capability

portfolio analysis.

Customer engagement
Biodiversity
Partnerships and initiatives

Policies and processes

Reducing our environmental footprint

We acknowledge nature risks including
biodiversity are closely linked toclimate-related risks.

Risk Management

Nature risks are recognised in our Climate Change
Commitment and are considered an emerging risk
under our Risk Management Framework (RMF). ANZ
seeks to understand emerging risks as they evolveand assess potential impacts to the Group. This year
we are continuing to take steps to better understand
ANZ’s nature risks. Refer to page 37 for further detailon the policies and processes we have in place tounderstand nature risks.

Metrics and Targets
Appendix
Assurance opinion

ANZ 2023 Climate-related Financial Disclosures

Customer engagement

In October 2021, we broadened our
engagement with 100 of our largest emitting
business customers to include a focus on
biodiversity; encouraging them to identify
and manage their potential impacts anddependencies. We have engaged with eachof these customers with this in mind. We
encourage them to establish or strengthen
their approach to biodiversity througheffective Board governance, policies andstrategies, and disclosures using recognised
indicators or metrics.
Our engagement with 100 of our largest emitting
business customers on biodiversity has been
positive. We are continuing to see increased
customer awareness of biodiversity and anincreasing willingness to improve holistic
management approaches, for example by putting
in place related governance and strengthening how
they measure their impacts on nature. Currently,
80 of these customers have governance in placeon biodiversity, to support their compliance withexisting environmental laws and regulations. In our
experience, Australian resource sector customers
are generally well placed partly due to their focus
on related regulatory compliance for more than
two decades. In general, they have progressively
strengthened their commitments to what they
will not do, for example, restricting exploration
or extraction of resources to protect high value
biodiversity areas.
We look to understand both the impacts of acustomer on biodiversity, and the impacts thatbiodiversity-loss may have on the customer.

Currently these customers are less progressedin setting targets and disclosure around biodiversity
compared with their progress in developing low
carbon transition plans, though we expect progress
to continue following the release of the TNFD’s
recommendations. Currently, 54 of these customers
have targets, policies or strategies in place to protect
biodiversity, with 61 making disclosures of theirefforts to protect biodiversity using recognised
indicators or metrics.
Customer engagement to date indicates a groupof leaders – some with ‘no net loss’ and otherswith ‘positive impact’ commitments. One customer
in this cohort has identified biodiversity as a key
dependency within their sector, transport, and has
plans to build out their strategy to better focus on
the areas where they can have the highest impact.
Another customer acknowledges the importanceof biodiversity for their group and in response
has developed a technology solution drawing
on third party databases, to increase monitoring
and reporting of impacts and dependencies.
We seek to apply what we learn from thisengagement to help refine our screening,
improve our knowledge and enhance our capacity
to engage with other large business customers
that are likely to have significant impacts and/or
dependencies on biodiversity. Further information
about our relevant screening tools and processes
is available on page 39.
We are considering how we may apply what welearn from our customer engagement to identify
and engage with other large business customers
that are likely to have significant impacts and/or
dependencies on biodiversity. We will continue toengage on biodiversity as part of our new phaseof engagement with our largest emitting businesscustomers, discussed on page 22.

Overview

100 of our largest emitting businesscustomers biodiversity status

Governance

100
90
80

76

Strategy80

Our purpose and strategy

70
Customers

26

60

50

50

54

58

Our climate ambition

61

Supporting our customers to transition
Financing sustainability$100b target performance40

Building capability

30

Customer engagement

20

Biodiversity

10

Partnerships and initiatives

0

2022

Governance

2023

Targets, policies
or strategies

Reducing our environmental footprint

Disclosures

Risk Management

Customers engaged in 2023

We are also seeking to support our customers
to understand their biodiversity and natureopportunities. While connecting sustainable financedirectly to the protection and restoration of nature in
the financial market has not been common to date,
we are starting to work with customers who are
integrating biodiversity KPIs in sustainability-linked
loans. See page 16 for further information on how
we are financing sustainability. In addition, our newsocial and environmental sustainability target, tofund and facilitate at least $100 billion by end 2030
in social and environmental outcomes throughcustomer activities and direct investments by ANZ,
includes activities to protect nature and biodiversity.
See page 20 for further details and ANZ’s Social andEnvironmental Sustainability Target Methodology
available at anz.com/esgreport

Metrics and Targets

We are continuing tosee increased customer
awareness of biodiversity
and an increasing
willingness to improve
holistic management
approaches.

Appendix
Assurance opinion

ANZ 2023 Climate-related Financial Disclosures

Upskilling our staff

Building the capability of our frontline
staff on biodiversity is critical tosupporting their engagement withcustomers on managing biodiversity
risks and opportunities.
Recognising a multi-disciplinary approachis required to upskill our staff on nature, thisyear, we have worked with Pollination, ANZ’s
strategic partner in environmental sustainability,
to develop a ‘Nature for Business Playbook’.
The sector agnostic Playbook was designed
to build our Institutional bankers’ capability
and understanding of nature to support their
engagement with customers on nature-relatedrisks and opportunities. It includes an overview
of emerging nature-related regulatory andindustry trends, and outlines certain naturerelated risks and opportunities.
Sector-specific Playbooks have also beendeveloped for food, beverage and agribusiness,real estate, energy and metals and mining
sectors and are being progressively rolled
out across relevant parts of the business.

NATURE FOR BUSINESS PLAYBOOKA PLAYBOOK FOR ANZ TO UPSKILLAND ENGAGE WITH CUSTOMERS ON NATURE

Portfolio analysis: assessing our impacts
and dependencies on biodiversity

highlighting food, beverage and agribusinessas a sector highly dependent on nature.2

Biodiversity risks and opportunities are inherently
sector and location specific. As a result, risks andopportunities are difficult to identify, making it notconducive to a single portfolio wide metric or target.

This analysis has helped inform our approach andconfirmed the sectors we have been focused on forour customer engagement program with 100 of ourlargest emitting business customers. To some extent,
this focus aligns with the sectors we have identified
with higher biodiversity impacts or dependencies,
confirming our understanding that biodiversity risks
are closely linked to climate-related risks. However,
we also acknowledge that there is not completealignment between our engagement program andanalysis via the ENCORE tool. We are considering ourapproach to prioritising customers for engagement,
including having regard to the September 2023
release of the Nature Action 100 companies.3

This year we utilised the Exploring Natural Capital
Opportunities Risks and Exposure (ENCORE)1 tool
to take initial steps to identify priority sectors andassess our potential sector level biodiversity impacts
and dependencies.

FOR INTERNAL USE ONLY

The portfolio level analysis demonstrated theimpacts and dependencies on nature by sector,
highlighting energy, and materials and buildings,
as sectors with higher impacts on nature, whilst

AUGUST 2023

IINTERNAL USE ONLY
Insert Classification

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

ENCORE impact and dependencies by sector 4
2.4

Risk Management

2.2

Metrics and Targets

1

Appendix2

See page 21 for details on how we’rebuilding the capabilities of our staff.

Impacts

27

Assurance opinion

1.8
1.6
1.4
1.2
1
1

1.5

2

2.5

3

3.5

4

Dependencies
1. The ENCORE tool consolidates international and national data from public databases. It is widely used by other banking institutions andrecognised as a robust tool. The ENCORE tool was developed by the Natural Capital Finance Alliance (the NCFA) and the World Conservation
Monitoring Centre (the UNEP-WCMC). 2. Mapping the high and very high impacts and dependencies of each sector. 3. Nature Action 100– Companies. 4. Impacts and dependency ratings were sourced from ENCORE. A score was applied in order to convert ENCORE's qualitative
assessment to a quantitative analysis and scores were aggregated.

Materials & Buildings

EnergyTransport

The size of the bubble represents exposure at default (EAD) as at September 2023.

Food, Beverage and Agribusiness

28

ANZ 2023 Climate-related Financial Disclosures

IMPACTS

Impacts on nature by sector1
Within the sectors assessed, water
use and terrestrial ecosystem use arecategorised as having the most material
potential nature-related impacts that
our customers have. Identifying sectorlevel impacts and dependencies enables
us to engage in more meaningfulconversations with these customers tobetter understand how we can support
them as they seek to manage, mitigate
and set targets in line with their impacts
and dependencies.
The analysis identified that the metals andmining sector has ‘very high’ impact acrosswater use, and terrestrial ecosystem use.
While there are varying levels of progress,
compliance with regulatory obligations has
seen biodiversity outcomes as a focus for themining sector for more than two decades. In
general, some customers have progressively
strengthened their commitments to what
they will not do (e.g. restricting exploration
or extraction of resources to protect highvalue biodiversity areas) and we have seen
an increase in the transparency of disclosuresaround key impacts such as water use.

1. Impact and Dependency rating data sourced from ENCORE.
Impact rating from very high to very low has been assigned toeach sub sector across each nature related issue. Exposure atdefault (EAD) represents the Group's exposure to each sector
based on APRA’s calculation formula which includes totalcommitted loans (drawn plus a proportion of off-balance sheet
exposures as specified by APRA). 2. EAD for sectors identified
by the TCFD to be most exposed to climate-related risks.
3. Numbers do not add to 100 due to rounding. 4. Greenhousegas emissions.

EAD as at
September
2023 ($bn)2

EAD
as a
%3

GHG
Emissions4Agriculture

31.5

16%

H

H

VH

Beverages

4.0

2%

H

H

H

1.0

1%

H

H

VH

7.6

4%

H

M

H

Coal

0.9

0%

H

H

VH

Electric Utilities

13.5

7%

H

H

Oil and Gas

15.5

8%

H

H

Air Freight

3.1

2%

H

L

Automobiles

4.4

2%

H

H

Maritime
Transportation

1.4

1%

H

H

Passenger Air

0.3

0%

H

H

Rail Transportation

1.8

1%

H

L

Trucking Services

4.9

3%

H

H

H

Capital Goods

21.2

11%

H

H

VH

Chemicals

3.5

2%

H

H

Construction
Materials

1.3

1%

H

Metals and Mining

8.0

4%

Real EstateManagement andDevelopment

69.9

36%

Food,
Paper andBeverage
Forest Products
andAgribusiness Packaged Foods
and Meats

EnergyTransport

Materials
andBuildings

Water
pollutants

Water Use

Overview

DEPENDENCIES
Terrestrial
ecosystemuse

Soil
Pollutants

VH

H

Climateregulation

VH

H
VH

Flood andstorm
protection

Groundwater

H

GovernanceMassstabilisationand erosion
controlSurface
water

VH

VH

VH

M

VH

L

VH

Strategy
Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability

H

VH

VH

VH

VH

VH

M

VH

VH

VH

VH

VH

VH

H

H

H

M

H

VH

VH

H

VH

VH

M

H

VH

VH

VH

H

M

H

VH

H

H

L

H

M

H

VL

M

H

L

H

Risk Management

H

H

M

M

M

M

Metrics and Targets

H

M

H

M

M

M

Appendix

L

H

H

M

H

M

Assurance opinion

H

VL

M

M

VL

M

VH

H

M

L

M

M

M

VH

H

H

L

M

H

L

H

M

H

VH

VL

M

VH

H

H

VH

VH

H

H

H

M

VH

M

H

$100b target performance

H

H

M

VL – Very low

L – Low

M – Medium

Customer engagement
Biodiversity
Partnerships and initiatives
Reducing our environmental footprint

M

VH

H

M

H

VH

M

VH

193.8
No impact or dependency

Building capability

H – High

VH – Very high29

ANZ 2023 Climate-related Financial Disclosures

Participation with industry groups
to build our understanding
This year we participated in a pilot study of the TNFD
framework’s application – focused on a particularsector – and provided feedback on the learnings
and existing barriers to adopting and implementing
the TNFD Framework in the Australian context.1
This work supported the Australian Government
in providing feedback to the TNFD that was
relevant for Australia. Our New Zealand businesshas also participated in a TNFD pilot to explore theframework. Collectively, piloting the Locate, Evaluate,
Assess and Prepare (LEAP) approach enabled ANZ
to develop an understanding of how nature-relatedrisks and opportunities are expected to be identified,assessed and disclosed in line with TNFD. It has also
assisted us to better understand the uplift that will
be required regarding data, tools, systems andcapabilities. Participation has helped us to mature
our approach to customer conversations and we areconsidering the extent to which the pilot approachis ‘scalable’ to other sectors.
‘LEAP’ provides an approach for organisations to:locate interface with nature

HIGHLIGHT

Overview
Governance

We have also joined the United Nations Principles for
Responsible Banking (PRB) – Nature Target Setting
Working Group – which is developing guidelines onnature target setting and considering how banks cancontribute to the Global Biodiversity Framework. The
aim is to create clear methodologies and approaches
to assist PRB signatories in setting science-based
biodiversity and nature targets, starting with pilotingof interim targets in 2024. We hope the guidance
will be useful for ANZ and other banks to use indeveloping their first targets following the releaseof the TNFD’s recommendations.
We welcome the establishment of the TNFD andhave joined the TNFD Forum to support its work. We
recognise their important role in driving widespreadand improved disclosures of biodiversity impacts
and dependencies. The TNFD’s recommendations
were released in September 2023, including
additional guidance for financial institutions, suchas proposed metrics that we are considering. We aretaking steps towards the TNFD’s recommendations
to help inform our disclosures in this report and plan
to continue to build on this in future years. See page
79 for our TNFD Index.

evaluate dependencies and impacts
assess risks and opportunities
prepare to respond

1. We acknowledge the Department of Climate Change, Energy, the Environment and Water for sponsoring the pilot study, which was facilitated by EY.

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

30

ANZ 2023 Climate-related Financial Disclosures

PARTNERSHIPSAND INITIATIVES
We play a role in sharing researchand insights, enabling cross-industry
collaboration and supporting development
and implementation of sustainable financeindustry standards.
Australian Sustainable Finance Institute
ANZ is a founding member of the Australian
Sustainable Finance Institute (ASFI), whichdeveloped a roadmap to re-align Australia’s financial
system to enable the transition to a more resilientand sustainable economy. The roadmap sets out
37 recommendations tackling a broad suite ofchallenges including climate change, biodiversity
loss and economic inequality.
During 2023 the Australian Government committed
to co-funding ASFI’s development of an Australian
Sustainable Finance Taxonomy. The taxonomy will
provide a common standard for green and transition
finance in Australia, aimed at providing credibility
and transparency to support capital flows into
activities contributing to Australia’s transition.
ASFI will provide strategic direction over, input
into and endorsement of a taxonomy forconsideration by the Australian government.

Toitū Tahua – Centre for
Sustainable Finance
ANZ Bank New Zealand is a founding member of
Toitū Tahua – the Centre for Sustainable Finance,
established in July 2021 as an independently
governed charitable trust to advance progress
towards the Sustainable Finance Forum’s
2030 Roadmap for an equitable, inclusive andsustainable financial system. Throughout 2023,

1. The EEC is the peak body for Australia’s energy management sector.

ANZ Bank New Zealand has continued to engage
with key government, regulatory and industry
stakeholders as part of our Toitū Tahua partnership,including through key roundtables and working
groups on: the Sustainable Agriculture FinanceInitiative (SAFI); financing climate and adaptationand long-term resilience; sustainable financetaxonomies; Emissions Trading Scheme; climatetransition planning; informing inter-Governmental
dialogues; and mobilising institutional investment
into private assets.
In June 2023, the inaugural Australia–New Zealand
Climate & Finance Summit was held to support
Trans-Tasman collaboration on sustainable financeand enable both countries to transition to lowemissions, climate-resilient economies. Toitū Tahua is
working closely with the New Zealand government,
the ASFI along with other partners including
Responsible Investment Association Australasia(RIAA) and the Investor Group on Climate Change(IGCC) in taking this forward.

The Aotearoa Circle
ANZ Bank New Zealand is also a leading partner of
The Aotearoa Circle, a voluntary initiative bringing
together leaders from the public and private sectors
to investigate the state of Aotearoa New Zealand’snatural resources, and to commit to priority
actions that will restore Aotearoa’s natural capitalfor future generations.
In 2023, ANZ Bank New Zealand took part ina cross-sector ‘bootcamp’ run by The Aotearoa
Circle to explore the TNFD framework. A young
ANZ leader also joined The Aotearoa Circle’s
Rangatahi Advisory Panel (the RAP).

The RAP has three main objectives:to hold to account The Aotearoa Circle's
Guardians and the Leadership Groups
of its workstreams,
to provide learning and development for
rangatahi (youth) employees of leading
partners, andto advise leading partners on a key pieceof their work each year.

Pollination
In 2022, ANZ and climate and nature advisory andinvestment firm Pollination announced a strategic
partnership. ANZ and Pollination intend to deliver
innovative solutions and opportunities for customers
in their efforts to transition to net zero and to
improve nature outcomes. The partnership brings
together ANZ’s capabilities across Institutional
Banking with Pollination’s expertise in climate
and nature to deliver financing solutions forour customers.
Amongst initiatives delivered this year, Pollination
and ANZ developed a program to build Institutional
banker capacity in nature and natural capital. This
included growing their understanding of naturerelated risks and opportunities and developing tools
to support bankers in engaging with customers onnature. See page 27 for more information.

Thought leadership

Overview

Putting energy efficiency to work

GovernanceThis year ANZ and the Energy Efficiency Council(EEC)1 released Putting energy efficiency to work,a report highlighting the significant contributionenergy efficiency and electrification can make tocutting energy bills and decarbonising the Australianeconomy. The report modelled how energy
efficiency could deliver up to 18.5 per cent ofAustralia’s 2030 emissions reduction targets. The
modelling also suggests that energy efficiency
and electrification, combined, could deliver almost
40 per cent of Australia’s 2050 net zero target.

Strategy
Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability$100b target performance
Building capability
Customer engagement

Energy efficiency and electrification are importantto support improved social and environmental
outcomes, and can also improve the financial
wellbeing of Australians through reduced energy
bills for households and businesses.

Biodiversity

The longstanding partnership between ANZ and the
EEC aims to support customers and the community
through the energy transition.

Risk Management“When you consider the bank’s purpose and what
we care about most, it’s financial wellbeing andhelping households and businesses move towards
more sustainable practices. Energy efficiency ticks
all of these boxes,” said Christina Tonkin, Corporate
Finance Managing Director.
Climate insights for businessThis year ANZ Bank New Zealand extended its suite ofsustainability insights papers, with two reports for the
food and beverage sector. These explored trends inconsumer preferences, and guidance for businesses
in publicising their sustainability journey. ANZ BankNew Zealand also held three webinars for businesscustomers on topics including reducing emissions,green buildings, and options for agriculture
customers to reduce emissions.

Partnerships and initiatives
Reducing our environmental footprint

Metrics and Targets
Appendix
Assurance opinion

31

ANZ 2023 Climate-related Financial Disclosures

REDUCING OURENVIRONMENTAL FOOTPRINTANZ has set ambitious targets for 2025
and 2030 to reduce our environmental
footprint and increase our sustainability
ambition in line with our purpose. Ouroperational reduction targets for greenhousegas emissions, water, waste and paper
take into account future remote working
arrangements, proposed efficiency projects,
property portfolio footprint efficiencies andan increase in renewable electricity usage.
In 2023, our operational emissions began
to normalise towards pre-pandemic levels
due to staff returning to our workplaces
and an increase in business travel. Our
focus remains on continuing to investigate
opportunities to counterbalance theseincreases in emissions through best practiceoffice and retail design, using renewableelectricity, green leasing, staff educationand supplier engagement.

Managing our residual emissions
Our aim is to reduce emissions where possible,
however, remaining operational emissions areoffset using carbon credits to achieve our net
zero carbon commitments.1

In 2023, our Australian operations
will apply to maintain our
carbon-neutral certification
under the Climate Action
Carbon Neutral Standard

Our New Zealand operations
have been certified under a net
Carbonzero certification throughToitū Envirocare for the first time.

Improving our data collection ofoperational scope 3 emissions
New Scope 3 Emissions sources
In 2023, we undertook a Scope 3 operationalemissions assessment and peer review to evaluate
best practice greenhouse gas (GHG) reporting andgain a deeper understanding of emerging trends
in disclosures. Suppliers were then engaged tounderstand the availability of emissions data forservices supplied to ANZ. The outcomes include theaddition of seven new Scope 3 emissions sources toour operational GHG inventory this year, including
expanding our working from home emissions
reporting to include New Zealand staff, adding to
the 21 Scope 3 emissions sources already reported
on in our GHG inventory:• Cloud Data Storage (Global)• Embodied Carbon – Retail Branch fit-outs (Australia)• Embodied Carbon – IT Equipment (New Zealand)• Freight (Global)• Postage and Mailing (Australia and New Zealand)• Refrigerants (Australia)• Working from home (New Zealand)

See page 42 for the physical risk assessment
analysis we conducted on our own operations.
Sustainable Staff Initiatives.

Green Ambassador Program

Overview

Our Green Ambassador program, launched in2018, empowers our people to live sustainably
by providing education and pathways to act.

GovernanceOver the month of August, we hosted the third
Green Ambassador Summit, focusing on theintersection between creating a sustainable andcost-efficient lifestyle. Employees were invited toconsider issues such as their consumption habits
and how to create a more energy efficient home.
More than 320 participants attended a seriesof virtual panels and workshops featuringindustry experts.

Our purpose and strategy
Our climate ambition
Supporting our customers to transition
Financing sustainability$100b target performance
Building capability
Customer engagement

Additional Green Ambassador initiatives include:

Biodiversity• Green Ambassadors in Manila launched theBrown Bag initiative, encouraging employees
to bring their used paper bags into an officecollection point. Since April, more than 144kgs
of brown bags have been diverted from landfill
and collected by the team, donated to the Silent
Beads Paper Bag Movement, Project Propel andother local vendors for re-use.

Partnerships and initiatives• Australian Green Ambassadors extended theirvolunteering partnership with the Australian
Microplastic Assessment Project/Earthwatch foranother three years, after a successful pilot trained
more than 300 ANZ employees across the country
as ‘citizen scientists’. Volunteers removed morethan 3,700 pieces of micro and macro plastic
waste from our waterways in the first year andcontributed to microplastic research being led
by Macquarie University.

Assurance opinion• ANZ Vietnam employees, along with theirfamily and friends, planted 500 trees in the
Vin Cuu district.

1. Further details regarding our boundary inclusions and exclusions for Scope 1, 2 and selected Scope 3 emissions can be found on the Climate Active and Toitū websites.

Strategy

Reducing our environmental footprint
Risk Management
Metrics and Targets
Appendix

32

ANZ 2023 Climate-related Financial Disclosures

PERFORMANCE AGAINST OURENVIRONMENTAL FOOTPRINT TARGETS 1
The below provides an overview of how we are performing against these targets.
OUR OPERATIONAL
FOOTPRINT TARGETS

Reduce the direct impactof our business activities
on the environment by:

GHG EMISSIONSRENEWABLE ENERGY

WATER

WASTE

PAPER

Combined scope 1 and 2
emissions have decreased by 80%
against a 2015 baseline, on track tomeet our 2025 and 2030 targets.

In 2023, 49% of our electricity
consumption came fromrenewable sources.

Our global water consumption
has decreased by 61% against a2017 baseline, on track to meetour 2025 target.

Waste to landfill generated
by global operations has
reduced by 71% since 2017, on
track to meet our 2025 target.

Paper consumption has
reduced by 71% since 2015, on
track to meet our 2025 target.

Our global emissions footprint
decreased due to:Increasing renewableelectricity to 100% by 2025;

49% of electricity consumed
being from renewable sources.

Reducing water consumption
by 40% by 2025 (against
2017 baseline);

Flexible working arrangements.

Reducing paper consumption(both office and ANZ
originated customer paperuse) by 70% by 2025
(against 2015 baseline).

Governance

Strategy
Our purpose and strategy
Our climate ambition

Reducing combined scope 1
and 2 emissions2 85% by2025 and 90% by 2030
(against 2015 baseline);

Reducing waste to landfill
by 40% by 2025 (against
2017 baseline);

Overview

Supporting our customers to transition

Commercial Property Footprint
Efficiencies Project.
Energy efficiency projects including:• Ongoing data centre server
optimisation project.
• LED lighting upgrades incommercial buildings acrossthe jurisdictions we operate in.
• Relocation of Vietnam office
to an energy efficient A grade,
LEED-certified building.

CO242,500 megawatt hours (MWh) ofrenewable energy was supplied toAustralian operations through the
ANZ Murra Warra wind farm and577 MWh of rooftop solar at our
global headquarters in Melbourne,
Victorian data centres and as aresult of the Retail Solar PPA Trial.

Although we are currently exceedingour 2025 target, this year wehave seen normalisation of ourwater consumption towards
pre-pandemic levels. We expect
water consumption to increase in
the coming year, due to an increasein staff returning to our workplaces.

8,631 MWh of renewable energy
was sourced for our global
operations via a Renewable
Energy Contract in New Zealand,solar leasing agreement in Fiji,and a Power Purchase Agreement(PPA) in India.

To mitigate this increase we
continue to undertake watersaving projects such as:• Installation of low flow shower
heads in End of Trip facilities.
• Installation of handwashingsensors in Bengaluru, withexpected savings of 30,000
litres of water annually.

Although we are currently
exceeding our 2025 target, waste tolandfill generation increased by 4%
since last year. This change was due
to an increase in staff returning to
our workplaces, which we expect
to continue over the coming year.

Although we are currently exceedingour 2025 target and have seen a 2%
reduction in our paper consumption
year on year, we do expect paper
consumption to increase in the
coming year, due to an increase instaff returning to our workplaces.

ReturnR Reusable container
program developed at our global
headquarters in Melbourne
has reduced single use coffee
cup usage by by 41% since
implementation.

Continued digital communicationtransformation project resulting
in 88% of customers electing toreceive statements and notices
electronically only during 2023.

Donation of excess furniturefrom the Optimisation programto Habitat for Humanity.

Electronic Document Signature(eSign) transactions increased by
59% in 2023, saving an estimated
4,400,000 sheets of paper.
In NZ, Project Whakamamati
is continuing and focuses on
proactively reducing the numberof paper statements that wesend to our customers.

LED

1. Environmental reporting year is 1 July to 30 June, in line with the National Greenhouse and Reporting Act (NGERs) administered by the Australian Clean Energy Regulator. 2. Scope 1 emissions include natural gas used to fuel boilers, a trigeneration plant and cooking in commercial buildings,
refrigerants from our commercial chillers, diesel used in back-up generators, a waste water treatment plant in our global headquarters in Melbourne, and fuels used for ANZ’s fleet and rental vehicles. Scope 2 emissions include electricity used to operate facilities and services including lighting,IT, heating, ventilation and air conditioning (HVAC) equipment and appliances (such as ATM’s, kitchen appliances) across our commercial, data centre and retail buildings.

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

33

ANZ 2023 Climate-related Financial Disclosures

Overview

Case studies

Retail Solar Power Purchase
Agreement (PPA) Program

GovernanceThe key benefits were:• Increased onsite renewable energy into the
network;

In 2023, we developed a program to installsolar to selected leased retail branches.
ANZ executed PPAs with Upstream Energy,
which installed and will maintain the solar
arrays with no direct up-front cost to ANZ
or our landlords.

• Progress on our renewable energy
commitment;

ANZ purchased the renewable electricity fromthe solar array for the term of the lease, whilelandlords execute a 10-year roof licenceagreement, after which time the solar arrayownership is transferred to the landlord.

• No ongoing operations and maintenance costs.

• No direct upfront cost of solar installations;• Improved short-term cash flow;• Fixed inflation protected electricity costs(under the PPA) for the term of the lease; andThe trial concluded in July, resulting in 11
landlords signing up to the program, and 247KW
of solar power installed on our selected retailbranches. The recommendation is to expand theprogram across other suitable sites within ourAustralian retail branch network in future years.

ReturnR reusable
container program

Climate Resilient
Retail Branch Concept

Aligned with our waste to landfill reduction
target and following the announcement ofa ban on single-use plastics in Victoria, wedeveloped a Reusable Container Program inpartnership with ReturnR at our head officein Docklands, Australia in June 2022.

Our Lismore branch has been significantly
impacted by floods in recent years, requiring
two refurbishments. Partnering with JLL
and Lendlease, we developed a strategy
to improve the resilience of the branch toflooding by increasing the use of waterresistant materials.

We engaged with our retailers, cleaners, facility
managers and staff to provide reusable products(coffee cups and food containers) for staff at the
point of sale. We set up a central retailer storage
hub for retailers to collect the products eachmorning and educated staff on how the program
worked. Engagement of our cleaners to support
cleaning and transportation of the products fromkitchens back to the central storage hub, was key
to the program’s success.
Since the program began in June 2022, we haveseen a 41%1 reduction in single use coffee cups
used by staff.

1. Calculation based on average single use coffee cup recycled through the Simply Cups program vs average FTE in ANZ Centre between 1 July 2022 and 30 June 2023.

Innovations developed include:• The use of flood damage resistant materials
such as marine ply joinery and modular
panels, epoxy flooring, powder coated metal
planter boxes, painted masonry, and raised
steel grille doors.
• Reduced usage of flood-vulnerable
materials such as carpet and plasterboard.
• Electrical Services, including switchboards
and IT servers, positioned above 2 metres tominimise electrical works required following
a flood.
• Revised furniture selection to utilise powder
coated steel and solid timber.

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

34

ANZ 2023 Climate-related Financial Disclosures

RISK
MANAGEMENT
How is ANZ exposed to climate-related risk?

Our understanding of climate-related
and nature-related risks, including
biodiversity loss, continues to evolveand mature.
On 9 November 2023 our Board Risk
Committee approved that ‘climate risk’
will be elevated to a Key Material Risk.
This means going forward that we arefurther strengthening our enterprisewide approach to managing climate
risk. We are working to embed thischange and expect to disclose ourprogress in our 2024 reporting. Thissection of the report discloses how
climate-related risk has been managed
and monitored during our 2023
financial year.

The Group’s most material climate-related risks arise
from lending to business and retail customers, which
contributes to credit risk. Customers may be affected
directly by physical and transition climate-relatedrisks such as: the effect of extreme weather eventson a customer’s business or property, including
impacts to the cost and availability of insurance andinsurance exclusions; changes to the regulatory andpolicy environment in which the customer operates;
disruption from new technology; and changes indemand towards low carbon products and services.
Climate-related risks may also indirectly affecta customer through impacts to its supply chain
and customer base.
If realised, these risks may affect the ability ofcustomers to repay debt; result in an increased
probability of default; result in ‘stranded assets’and impact the amount the Group is able torecover due to the value or liquidity of collateral
held as security being impaired. The Group may
also face legal proceedings and suffer reputational
damage, for example, if it acts or is perceived to act
inconsistently with public commitments in relation
to climate change. Failure to manage these risks
may adversely affect the Group’s position.
Refer to pages 44-45 for our credit metrics andclimate exposed sub-industry sector exposures atdefault and page 80 for our portfolio financed
emissions pathways and targets.1

Climate-related transition and physical risks thatmay potentially impact our performance include:
Transition Risk

Physical Risks

Policy Risk

Acute(eg. customer exposure
to heatwaves, floods,
bushfires and cyclones)

Maket Risk
Legal Risk

Chronic(eg. customer exposure
to rising sea levels,
rising averagetemperatures andocean acidification)

Technology Risk
Reputational Risk

Policy risk
Policy uncertainty or future government policychanges may affect the operating costs of customers
in a range of sectors, particularly those in higheremitting sectors. For example, through moreaggressive emissions reductions targets, a mandated
shift to lower carbon processes or policies to allocate
or levy costs associated with carbon emissions.
A potential risk also exists, for example, should
prudential regulators implement measures such as
capital overlays on exposures to higher-emitting
sectors in recognition of their increased transition risk.
Such developments may increase the cost of funding
which could in turn reduce our ability to provide
finance to certain customers in higher-emitting
sectors, typically in the Institutional customer
portfolio, which aims to help them transition.
Timeframe:2 S

M

Legal risk

Overview

Increased regulation will require financial institutions
to dedicate additional and ongoing resources to
identify, assess, manage and disclose climate risks andopportunities, leading to increased operational costs.

Governance‘Greenwashing’ is the practice of misrepresenting
the extent to which an entity, product or strategy
is environmentally friendly, sustainable or ethical.
For example, greenwashing risk may arise wherean entity is alleged to have misrepresented its
climate-related risks, business credentials or
strategies. If ANZ is found to have engaged in‘greenwashing’, this may lead to penalties andreputational impacts, which could lead to a decline
in ANZ’s future earnings. We seek to manage
this risk through transparent disclosure of ourclimate-related financial risks and through ourrisk management policies and processes. We also
monitor both our own legal risks (to the extent
that they arise) and claims brought against otherorganisations to better understand emerging trends.

Risk Management

We also monitor our Institutional and Corporate
customers’ exposure to legal risk, which may manifest
as potential credit and reputational risks to ANZ,
through our Social & Environmental Risk Screening
process and credit process, for Institutional andCorporate customers identified by ANZ to be subject
to heightened climate-related scrutiny.
Timeframe:

L

S

M

M

MediumL

1. Set in alignment with our Net-Zero Banking Alliance commitment. 2. ANZ classifies risk timeframes/horizons (i.e. short, medium and long-term), aligning with our classification of limits. Short-term: 0 to 1 (years),
Medium-term: 1 to 5 (years) and Long-term: 5 to 30 (years).

S

Short

L

Long term

Strategy

Climate-related risk
Risk management framework
Policies and processes
Integrating climate risk
Physical risk
Metrics and Targets
Appendix
Assurance opinion

35

ANZ 2023 Climate-related Financial Disclosures

Technology risk
New technologies may disrupt the economics of
certain products and services. For example, we areseeing emerging technologies being applied torenewable energy projects (both generation andstorage), which may reduce demand for coal andgas fired electricity generation faster than expected
and result in assets becoming stranded, bringing
forward decommissioning costs. The adoption of
new technologies and processes may also increase
operating costs for customers.
This risk may result in credit losses to ANZ, which
can occur when a customer becomes unable orunwilling to repay debt. We seek to minimise therisk of losses through customer selection, working
actively with customers facing difficulties andmanaging our exposure to customers that we
identify may be impacted by technologicaldevelopments, working with relevant customers,
typically those in the Institutional customer portfolio.
Timeframe:

S

M

L

Market risk
The market risk category of transition risks arise
from lending to companies with large exposures
to higher-emitting assets. If these companies
experience a decline in demand for their products
or services, this may affect their ability to repay loans.
The impact may also extend to companies who areexposed to higher-emitting assets through their
supply chain, which could lead to an increase inoperating costs.
Market demand, supply and prices for climate
exposed sectors, such as energy generation,
can be subject to a number of influences andmay change unexpectedly.
1. Transactions involving our Institutional and Corporate customers.

We seek to manage this risk through a combinationof engagement, with relevant customers, typicallythose in the Institutional customer portfolio and byassessing relevant publicly available information,
recognising that the levels of risk exposure andpotential impacts vary across industry sectors
and individual businesses.
Timeframe:

S

M

L

Reputational risk
Failure or perceived failure to apply appropriate
standards to our decisions and respond effectively
to stakeholder concerns about our involvementin particular transactions can result in public
criticism and activism, potentially damaging
our brand and reputation.
We seek to manage this risk through our Socialand Environmental Risk Policy, which sets out the
principles and standards to be taken into accountby our bankers when considering large business
transactions.1 We also continue to apply an enhanced
due diligence and decision-making process forrelevant customers and transactions in the energy
sector, including companies with operations in theoil and gas sector, see page 11 for further details.
Where customer practices may not be consistent
with ANZ’s policies and processes, we aim to workwith them to understand their circumstances and,
where necessary, encourage them to identify
specific and time-bound improvement plans. If
prospective or existing customers are unwilling toadapt their practices in an appropriate timeframe,
we may decline financing or exit the relationship.

We also engage in public policy discussion on climatechange, where appropriate, and seek to increase thetransparency of our approach to climate change bydisclosing our membership of key industry bodies.
Timeframe:

S

M

L

Acute physical risk
Customers’ exposure to acute climate-related events
may adversely affect collateral we hold to secure credit
facilities extended to those customers. To manage thisrisk, for example, ANZ requires property over which
it holds a residential home loan to be appropriately
insured for the period of that home loan.
Timeframe:

S

M

L

Chronic physical risk
We support a range of agribusinesses across Australia
and New Zealand. Agriculture requires specificweather and soil conditions, and farmers congregate
in locations that have historically provided theright environment. As the climate changes, somecustomers might find that with the magnitude or
frequency of the climatic events such as droughtor flood, they may experience reduced income,
impacted asset values and issues regarding the costand availability of insurance, potentially affecting
their ability to repay loans. The economic impactof these events may also extend beyond primary
producers to other customers, including suppliers to
the agricultural sector, and to those who reside in,and operate businesses within, affected communities.

Overview

How is ANZ exposed to nature-related risk,
including biodiversity loss?

Governance

Nature-related risk, including biodiversity loss, forexample as a result of species extinction or decline,
or ecosystem degradation and nature loss, is an
emerging risk that the Group is seeking tounderstand further.

Risk Management

Biodiversity risks are closely linked to climate-relatedrisks and for ANZ are likely to arise primarily throughour exposure to customers that have material
dependencies and/or whose actions may havenegative impacts on nature, including biodiversity.
In addition to physical risks associated withbiodiversity loss, risks can also arise from changing
societal preferences and regulatory or policy changes,
including potential reforms to halt and reverse forest
loss, species extinction and land degradation.
These changes may affect the Group directly, but thegreater impact is likely to be through the impact ofthese changes on some of the Group’s customers.
We are seeking to understand how our customers
are managing and disclosing their impacts anddependencies on nature, for example, through ourcustomer engagement program (see pages 22-24).

We recognise the need to understand how customers
manage their land and natural environment,
including our customers’ plans for a changing climate.
Timeframe:

M

L

S

Short

M

MediumL

Long term

Strategy

Climate-related risk
Risk management framework
Policies and processes
Integrating climate risk
Physical risk
Metrics and Targets
Appendix
Assurance opinion

36

ANZ 2023 Climate-related Financial Disclosures

Our approach to climate-related
and biodiversity risks
ANZ’s approach to identifying, measuring,evaluating, monitoring and reporting risk, including
climate-related risk and biodiversity, is set out in
our Risk Management Framework (RMF), which
describes how the Group manages all risk types.
Further detail on our risk types is available in the Risk
Management section of our 2023 Annual Reportavailable at anz.com/annualreport.
Climate change risk is managed and monitored
as part of ANZ’s business, strategic and capitalmanagement processes.
While for ANZ climate change risk primarily
manifests as a financial risk, especially credit risk,
it may also result in additional market, operationalor other risks. Our key material risk category ofCredit Risk considers the risks associated withlending to customers that could be impacted byclimate change, including by physical and transition
risks. We continue to seek to manage climate-related
impacts in accordance with the risk management
strategies associated with the applicable key
material risks.

Our approach to nature-related risk
including biodiversity loss
Biodiversity risk is considered an emerging
risk under our RMF compared with other areasof risk and is recognised in our Climate Change
Commitment. ANZ seeks to understand emerging
risks as they evolve and assess potential impacts
on the Group.

Our risk management framework
The following provides an overview of the role that
our RMF plays in ANZ’s overall risk management
approach and includes detail on how climate-related
risk is being integrated into this approach.
The Board is ultimately responsible for establishingand overseeing the Group’s RMF which is supportedby the Group’s underlying systems, structures,
policies, procedures, processes and people.
The Board has delegated authority to the Board
Risk Committee (BRC) to develop and monitor
compliance with the Group’s risk management
policies.

The Committee reports regularly to the Board on its
activities. The key pillars of the Group RMF include:• The Risk Management Strategy (RMS), which
describes the approach for managing risk arisingfrom the Group’s purpose and strategy. The RMS
is reviewed and reset annually at a minimum. The
RMS includes:– an explanation as to how the risk function is
structured to support the Group’s purpose andstrategy, and the execution of the Group Chief
Risk Officer’s prescribed responsibilities as an
Accountable Person for the Group under the
Banking Executive Accountability Regime;– the values, attitudes and behaviours required of
employees in delivering on strategic priorities;– a description of each of the key material risks;and– an overview of how the RMF addresses eachrisk, with reference to the relevant policies,
standards and procedures.
It also includes information on how the Groupidentifies, measures, evaluates, monitors, reports
and then either controls or mitigates material
risks and the oversight mechanism and/or
committees in place.

• The Risk Appetite Statement (RAS), sets out
the Board’s expectations regarding, for eachmaterial risk, the maximum level of risk that theGroup is willing to accept in pursuing its strategic
objectives and its operating plans considering its
shareholders’, depositors’ and customers’ interests.
The RAS is reviewed annually at a minimum. The
RAS acknowledges that climate-relatedrisks primarily manifest through credit risk.
• The Risk Culture principles are a subset of theGroup’s organisational culture and an intrinsic
part of the Group’s RMF.
The Group operates a Three Lines-of-Defence
Model in regard to risk management, helping toembed a culture where risk is considered everyone’s
responsibility. See our 2023 Annual Report for further
details available at anz.com/annualreport.
The governance and oversight of risk management,
while embedded in day-to-day activities, is also thefocus of committees and regular forums across theGroup. The committees and forums discuss andmonitor known and emerging risks, review
management plans and monitor progress to address
known issues. See our Annual Report for further details
available at anz.com/annualreport. For governancestructure relevant to the oversight of climate-relatedrisks and opportunities, refer to page 8.

Overview
Governance
Strategy

Risk Management
Climate-related risk
Risk management framework
Policies and processes
Integrating climate risk
Physical risk
Metrics and Targets
Appendix
Assurance opinion

37

ANZ 2023 Climate-related Financial Disclosures

Overview of how Social and Environmental
Risks (including climate and nature-relatedrisks) are incorporated into our policies
and procedures

We seek to assess and manage the impacts of ourlending decisions through the application of ourSocial and Environmental Risk Policy (the Policy)
and accompanying requirements including for‘sensitive sectors’:

PolicyWe regularly review our lending practices andpolicies, in light of current and emerging socialand environmental issues.
These potential social and environmental issues
associated with lending to customers are also
typically considered by our management Ethics
and Responsible Business Committee (ERBC) and
Board Ethics, Environment, Social and Governance(EESG) Committee. See page 8 for further details
on our governance structures.

ENERGYEXTRACTIVE INDUSTRIESFORESTRY AND FORESTSHYDROELECTRIC POWER

MILITARY EQUIPMENTWATER

The Policy outlines the social and environmental
factors to be taken into account by our bankers
when considering large business1 transactions.
It incorporates our approach to human rights,
including our ‘zero tolerance’ for land acquisition
and involuntary resettlement that we consider
improper, as well as labour rights issues such as
modern slavery.
We review the Policy at least every three years,
with oversight from our ERBC to ensure it remains
fit-for-purpose. The review takes into accountchanges to customer practices, international
standards, emerging social and environmental
issues, and stakeholder feedback.
1. Transactions involving our Institutional and Corporate customers.

In 2023, we improved our credit risk assessment
process via our Online Customer Profile platformby integrating our Social and Environmental Risk
screening tool for large business customers. This
allows us to improve our identification of financial
and non-financial risks (including reputational risk)
we may face through our customer activities, both at
an individual customer level and across our portfolio.
This year we have expanded our Climate Change
Risk Assessment – see highlight box on page 39
for further details.
Due diligence
Prior to entering into a relationship with a large
business customer or entering into any new materialtransaction, bankers are expected to consider thecustomer's management of its material social andenvironmental issues and any associated potential
impacts. Bankers must also consider the customer’s
history of, and approach to dealing with, any
potential (or historical) impacts.
Under our credit policy we review our large
business customers at least annually. This includes
the consideration of issues specified in our Socialand Environmental Risk Policy and, where relevant,sensitive sector requirements. We expect ourcustomers in all sectors to implement appropriate
stakeholder engagement strategies and plans,
and we have included this consideration in theSocial and Environmental Risk screening tool.
The ERBC considers the social and environmental
impacts of the industries, customers andcommunities ANZ serves. The ERBC is responsible
for overseeing the ERBC Sub-Committee for sensitive
wholesale transactions. The rationale for eachdecision relating to any escalated transactions isprovided to the ERBC for oversight and information.

Further, we seek to apply enhanced due diligenceand decision-making processes to customers andtransactions in the energy sector via our Energy
Transactions Escalation Process, see page 11 forfurther detail.

Overview
Governance
Strategy

Risk Management
In line with our Social and Environmental Risk Policy
we expect large business customers to use, or
migrate towards, internationally accepted industry
practices to manage social and environmental
impacts, including potential impacts on natureincluding biodiversity. The Policy has accompanying
requirements, including our Forestry and Forests
and Water policies.
Through the application of our Forestry and Forests
and Water policies, we seek to support customers
who are improving their forestry and water
management practices.
Our Land Acquisition Statement states that wewill not knowingly support customer activities thatsignificantly impact on culturally or environmentallysensitive areas, including: World Heritage Areas,
wetlands on the Ramsar list, designated nationalparks and conservation areas, activities that threaten
species listed in Conservation of International Tradein Endangered Species of Wild Fauna and Flora(CITES), the International Union for Conservationof Nature (ICUN) Red List of Threatened Species or
relevant national legislation, activities that result inthe broad-scale conversion of intact native forests
and High Conservation Value Areas, or activities
which are in breach of agreed international treaties
and agreements.

Climate-related risk
Risk management framework
Policies and processes
Integrating climate risk
Physical risk
Metrics and Targets
Appendix
Assurance opinion

38

ANZ 2023 Climate-related Financial Disclosures

Overview

Our Approach to the Energy sector,
including Oil and Gas customers in
extractive industries
We expect our existing business customers
in higher-emitting sectors such as energy –which plays a key role in the transition, witharound 75% of global emissions attributed
to energy use1 – to integrate climate change
risk into their company strategies.
Specifically, for the energy sector (including
integrated oil and gas companies involved in
exploration, development and refining as well
as low carbon energy solutions, thermal coalmining, and integrated power utility companies
such as renewable energy and coal):• We expect new customers or projects todisclose Paris-aligned business plans. This
includes the extent to which their company
strategy, emissions reduction targets andplanned capital expenditure are alignedwith the Paris goals.
• For existing customers or projects, by end
2025 we expect our energy customers to:– Establish specific, time bound, public
transition plans and diversification
strategies that are Paris-aligned.
– Report transparently on climate risks
and opportunities outlining how theirbusiness will be resilient in a range ofclimate scenarios, including scenarios alignedwith the Paris temperature goals preferablyusing the Task Force on Climate-related
Financial Disclosures (TCFD) framework.

of the broader energy market, public
policy developments and stakeholder
and shareholder expectations.

– Measure and disclose the Scope 3 emissions
from use of their products and any progressin reducing those emissions.

Our exposure to thermal coal will continue todecline in line with our new target to reduce
absolute financed emissions from our lending
directly to thermal coal by 100% by 2030,
and our existing commitments, which includes
no longer onboarding any new businesscustomers with material thermal coal exposures,or directly financing new thermal coal minesor power plants.3– Measure and disclose their progress in
reducing emissions in their value chains –for example, by reducing emissions fromshipping and distribution.

2030 oil and gas target absolute
financed emissions reduction target
and policy for oil and gas extraction

We may decline lending to projects andcustomers – new or existing – that do notmeet our expectations for energy customers.

We have set a 2030 target to reduce theabsolute financed emissions from our oil andgas portfolio by 26% from a 2020 baseline.

We are changing the mix of our energy financing
portfolio, as we support our customers’ expansion
into low- or zero-emission technologies.

See page 53 for an update on our 2023
performance against the target and further
details on key design choices we used to
calculate our absolute financed emission
reduction target, including actions to achieve it.

– Participate in industry initiatives thatwill contribute to reducing emissions,for example, in the oil and gas sector,
capturing and storing methane in linewith the Methane Guiding Principles2.

We acknowledge oil and gas are still needed as wetransition, especially gas as ‘firming’ for renewableenergy and in industrial use – considering theintermittent generation of renewables, gas willcontinue to play a balancing role. We continue toassess the role of oil and gas within the context

From 2024 we are enhancing our oil and gas
policy for relevant customers in the extractive
industries. Please see our Extractive Industries
Policy on anz.com for further details.

1. Energy use includes transport in addition to the power generation sector. The percentage of global emissions from energy use is sourced from the International Energy Agency (IEA), Net Zero by 2050: A Roadmap for the
Global Energy Sector, October 2021. 2. Methane Guiding Principles. 3. We will continue to provide rehabilitation bonds for those existing customers with some thermal coal exposure to ensure their responsibilities withexiting mine sites are fulfilled.

Governance
Strategy

Risk Management
Climate-related risk
Risk management framework
Policies and processes
Integrating climate risk
Physical risk
Metrics and Targets
Appendix
Assurance opinion

39

ANZ 2023 Climate-related Financial Disclosures

Tools and Processes

Overview

The Social and Environmental Risk Policy (referred to on page 37) is supported by the application of tools and processes which apply to large business customers and transactions1(unless otherwise noted)

GovernanceSocial andEnvironmental
Screening Tool

Risk Management

Facilitates qualitative risk assessment of potential reputational, social andenvironmental issues (including climate), considers stakeholder concerns
and assesses the adequacy of management mitigation strategies for large
business customers and transactions.
Our policy requires the screening process is applied to all:• new customers;• material new transactions of existing customers; and• annual reviews.

Review andassessment of ourLarge Emitters
Engagement
ProgramFacilitates engagement with our customers who are part of our Large
Emitters Engagement Program. This involves an assessment of customers’transition planning.

Equator Principles

A risk management framework for determining, assessing and managing
social and environmental risks in major projects such as mines, windfarms
and pipelines for which we provide project finance. Refer to our ESG
Supplement and ESG Data and Frameworks pack for further detail available
at anz.com/esgreport

It should also be applied in the event of any serious credible allegations
on social or environmental issues that involve our large business customers
and transactions.
Reputation
Risk Radar

Climate Change
Risk Assessment

Enhanced Due
diligence for energy
sector customers(including Oil
and Gas)A service which monitors certain reports of social and environmental,
and significant governance incidents and allegations against existingand prospective ANZ customers. Notable incidents and allegations arereferred, where appropriate, to our risk management forums in whichsocial, environmental and credit risks are considered.

Refer page 22 for further detail.

Climate-related risk
Risk management framework
Policies and processes
Integrating climate risk
Physical risk
Metrics and Targets
Appendix
Assurance opinion

HIGHLIGHT

Climate Change Risk Assessment (CCRA)

Facilitates qualitative risk assessment of customers’ exposure to potential
physical and transition risks, the maturity of a customer’s transition plan andunderstanding how our customers are managing and disclosing nature-relatedrisks, including biodiversity loss. It also seeks to understand and quantify
potential financial impacts of climate risks. Refer highlight box for further detailabout how we are expanding the CCRA and the customer groups it applies to.

The CCRA is an internal risk management tool used
to help guide our engagement with customers.
The CCRA includes an assessment of customers'
exposure to potential physical risks and transition
risks and the maturity of the customer in developinga transition plan. It also assists us in understanding
how our customers are managing and disclosing
their nature-related risks, including biodiversity loss.

Facilitates identification of relevant transactions to be referred to senior subject
matter experts to review alignment with ANZ’s Climate Change Commitment.
Where required, this includes escalation to senior executives for consideration.
Refer page 11 for further detail.

It is acknowledged that customers’ nature-relatedrisks, including biodiversity loss, are increasing andit is expected that this element of ANZ’s CCRA
will continue to expand and evolve over time.

1. Transactions involving our Institutional and Corporate customers.

StrategyThis year, the CCRA has been digitised andintegrated into our credit risk assessment process via
our Online Customer Profile platform, alongside
our Social & Environmental Risk screening tool.
Outcomes of the assessment are included in thecredit process and help inform credit decisions.
The CCRA is being expanded beyond our Project
Finance business starting with Institutional energy
sector customers subject to the enhanced due
diligence process and customers in our Large
Emitters Engagement Program – refer to pages
81-84 for the 2023 ESG target update.

40

ANZ 2023 Climate-related Financial Disclosures

Monitoring climate regulation
ANZ operates in 29 markets, and one of our priorities
is to ensure that we comply with climate regulationin the jurisdictions in which we operate.
This year we engaged an external provider toundertake an assessment comparing regulatory
expectations across seven jurisdictions in which we
operate: Australia, New Zealand, Singapore, Hong
Kong, the United Kingdom, Europe and the USA.
The assessment will help inform the integrationof climate risk standards and obligations into our
Non-Financial Risk Framework (NFRF) commencing
from 2024. See the Risk section of our 2023 Annual
Report for further details on the NFRF available atanz.com/annualreport.
The Australian Treasury has been consulting on
the Federal Government’s proposed mandatory
climate-related financial disclosure regime. The
regime is due to commence from 1 July 2024
and, under the current proposal, ANZGHL's firstmandatory reporting period would be the financial
year commencing 1 October 2024. ANZ is reviewing
current processes, capabilities and structures to map
and execute a roadmap for compliance with theregime across the Group.
In New Zealand, ANZ’s Climate and Environmental
Sustainability Programme continued this year
to prepare for compliance with New Zealand’s
mandatory climate-related disclosure regime.

Both ANZ Bank New Zealand Limited and ANZ
New Zealand Investments Limited are climate
reporting entities (CRE) under the Financial Markets
Conduct Act 2013 (FMCA).1 Each entity has climaterelated disclosure obligations under Part 7A of
the FMCA and the Aotearoa New Zealand Climate
Standards (NZ CS). ANZ Bank New Zealand Limited’s
first mandatory reporting period is the financial year
ending 30 September 2024, and it intends to publish
a voluntary climate report for the financial year
ending 30 September 2023. ANZ New ZealandInvestments Limited will publish climate statementscommencing in 2024 in relation to its registered
managed investment schemes.
Policy engagement
We play a role in sharing research and insights,
enabling cross-industry collaboration and support,
to help the economy to transition to net zero.
We contribute to the dialogue via the Treasurer’s
Investor Roundtable established in October 2022,
which brings together some of Australia’s largest
superannuation funds, the major banks and global
asset managers, to identify and overcome barriers toinvestment. The most recent Roundtable focused onaligning efforts to deliver cleaner, cheaper energy.

Refer to page 30 for detail of ANZ’s involvement withthe following organisations: Australian Sustainable
Finance Institute, Toitū Tahua – Centre for Sustainable
Finance, The Aotearoa Circle; and the partnership
between ANZ and the Energy Efficiency Council.
ANZ Group is a member of a number of industry
associations. We seek to contribute constructively
to public policy formation and understandthe perspectives of our community’s elected
representatives, policy makers and regulators.
We contribute to policy on business, economic,
social and environmental issues.
ANZ participates in working groups for example
via the Australian Banking Association on climate,nature and climate scenario analysis and via ANZ
UK we participate in the UK Financial Conduct
Authority’s Climate Financial Risk Forum, Climate
Resilience working group. We have also madesubmissions to the Australian Treasury consultationon the Federal Government’s proposed regime
for mandatory climate disclosure.
We understand our stakeholders are interested in
the position we take on issues such as climate andwe periodically review our membership of industry
associations that develop policies and undertake
advocacy on these and other issues. Refer to our
ESG Supplement at anz.com/annualreport fordisclosure of our membership of key industry
associations.

Integrating Climate Risk into Risk
Appetite Statements
Risk appetite is informed by the requirementsof our Social and Environmental Risk Policy2
and ANZ’s ERBC Sub-Committee for sensitive
wholesale transactions, which provides oversightin relation to customer selection and lending
decisions having regard to ANZ’s purpose andClimate Change Commitment.
ANZ’s Climate Change Commitment informs risk
appetite for certain priority sectors in Institutional,
which is reflected in sector-level lending criteria,
including for resources, energy and large-scalecommercial real estate sectors. New technologies
and markets required to support the transition
to net zero emissions may result in a change to
our risk appetite across the Group, which we willcontinue to review and refine as appropriate.
Building on steps taken in previous years to refine
our Risk Appetite Statements across the Group,
we aim to introduce certain targeted metrics in
2024 which we expect will enhance monitoringof key areas of climate-related risk.

1. ANZBGL is considered a CRE in respect of its New Zealand business under Part 7A of the FMCA and is almost entirely covered by ANZ Bank New Zealand’s climate statements. ANZBGL climate statements will include considerations for other assets not covered by ANZ Bank New Zealand’s climate
statements. ANZGHL is also considered a CRE, however the Financial Markets Authority (FMA) has agreed in principle to grant a class exemption for five years which applies to ANZGHL; this partial relief means ANZGHL will need to comply with reporting, assurance and record keeping obligations
in respect of its New Zealand business operations or investments only, and only to the extent that it is not otherwise reported on by ANZBGL or ANZ Bank New Zealand. 2. Institutional, including Corporate customers and see page 37 for further details.

Overview
Governance
Strategy

Risk Management
Climate-related risk
Risk management framework
Policies and processes
Integrating climate risk
Physical risk
Metrics and Targets
Appendix
Assurance opinion

41

ANZ 2023 Climate-related Financial Disclosures

Data and Analytics – to support
integration of climate-related risk
ANZ is participating in regulatory scenario
assessments and stress tests, analysing the impactof certain climate risks to specific portfolios within
the bank. ANZ is also engaging with industry bodies,consultants and third-party vendors to better
understand data that could be used to assess andunderstand ANZ’s and our customers’ potential
exposure to physical and transition risks.
The quality and availability of climate and naturerelated data remains a challenge. This year ANZ
developed an Environmental Sustainability (ES)data strategy to inform our approach to sourcing
and integrating climate data in priority use cases.
We expect that the data strategy will help us to:• develop a more coordinated, centralised approach
to climate data that can be shared across divisions
and jurisdictions in which we operate;• understand our current data requirements, gaps
and inter-dependencies across priority use cases;• start to identify and build our ES data capability
including climate-related risk capability;

Informing our risk assessments
ANZ recognises that scenario analysis is a strategic
tool that can help us to further identify, understand,assess, and manage potential climate-related risks,
impacts and opportunities of physical and transition
risk to the Group and our customers. Scenario
analysis can also help us to understand sector andportfolio- vulnerabilities and inform risk assessments,
strategic planning and decision making.
Our focus has been on participating in regulatory
led scenario assessments and stress tests to build
capability and to develop our understanding of thedata requirements we need.
In 2021-2022 ANZ participated in the APRA Climate
Vulnerability Assessment (CVA),2 which assessed thepotential impact of physical and transition risks toparts of our Australian mortgages, agriculture andbusiness lending portfolios. The three key objectivesof the CVA were to:• assess potential financial exposure to climate risk;• understand how banks may adjust businessmodels and implement management actions
in response to different scenarios; and• start to build and uplift ES capability in our
processes and systems; and• foster improvement in climate risk
management capabilities.

• support informed decision making in relation
to the assessment of certain customers’1 ES risks,such as climate-related risks.

Data was provided by APRA to support thecompletion of the CVA. The approach included
physical and transition risk impacts arising fromtwo climate scenarios and included both portfolio
and counterparty assessments.

A data forum has been established to identify
and prioritise ES data use cases across the Group.
See pages 81-84 for further detail regarding our 2023
ESG Target update.

The CVA used two future climate scenarios as thefoundation for assessing potential physical andtransition risk impacts, which were aligned to theinternationally recognised scenarios developedby the Network for Greening the Financial System(NGFS): a Current Policies Scenario and Delayed
Transition Scenario. The Current Policies Scenario
assumed that only currently implemented policies
are preserved, leading to global warming of morethan 3°C with emissions continuing to be elevatedbeyond 2050. The Delayed Transition Scenario
assumed delayed policy action on climate change,
followed by a rapid reduction in emissions after
2030, consistent with limiting global warming to
below 2°C.
APRA published the results of the CVA in November
2022. The CVA Information Paper which reports theresults in more detail states that climate-related
lending “… would be impacted under the climate
scenarios that were evaluated. However, in theabsence of a severe deterioration in macroeconomic
conditions, these losses are unlikely to rise to a levelthat would result in severe stress for the banks.”3
The CVA Information Paper notes that the results“indicate that the impacts would be different foreach of the two climate scenarios. In addition, theresults also varied by bank, by region and sector, andover time. The results provided by the banks for thecounterparty assessments suggest that counterparty
credit ratings can be negatively impacted undereach of the climate scenarios.”4 This was “moreprominent” under the Delayed Transition Scenario
for counterparties in emissions intensive sectors (e.g.
fossil fuel extraction and related businesses, mining
and certain utilities).5

Across 2022 and 2023, ANZ Bank New Zealandparticipated in the Reserve Bank of New Zealand’s
first climate sensitivity analysis, identifying areasof vulnerability exposed to physical and transition
climate risks, specifically for the residential andagriculture credit portfolios.
This year, ANZ Bank New Zealand was also one offive banks that participated in the Reserve Bank of
New Zealand’s 2023 Climate Stress Test. ANZ BankNew Zealand will seek to integrate learnings andinsights from these programs into their risk
management processes.
We are participating in the 2023-2024 Hong Kong
Climate Risk Stress Test developed by the regulator,
Hong Kong Monetary Authority. Our focus in thisstress test is on a short-term scenario, which features
both climate-related shocks and a macroeconomic
downturn.
Given ANZ operates across 29 markets, we expect
the number of stress test exercises we participate
in will increase over time. ANZ considers thatparticipation in these stress tests will help to inform
an approach to scenario analysis that can be appliedby the Group and adjusted at a country-level.
ANZ is also prioritising scenario analysis within
our ES data strategy.

1. Institutional, including Corporate customers. 2. The CVA was carried out by Australia's five largest banks. 3. APRA – Information Paper – Climate Vulnerability Assessment Results, November 2022, page 8. 4. APRA – Information Paper – Climate Vulnerability Assessment Results, November 2022,
page 8. 5. APRA – Information Paper – Climate Vulnerability Assessment Results, November 2022, page 33.

Overview
Governance
Strategy

Risk Management
Climate-related risk
Risk management framework
Policies and processes
Integrating climate risk
Physical risk
Metrics and Targets
Appendix
Assurance opinion

42

ANZ 2023 Climate-related Financial Disclosures

Overview

Initial steps we are taking toconsider physical risk to residential
and agricultural sectors
Residential home loans – Australia
During this financial year, some customers inAustralia were affected by floods and severe
storms. While homes were unfortunately lost,
most customers were protected by an insurance
policy (in accordance with their home loan
contract) which limited losses to the Group.
As at 30 September 2023, these events had
not resulted in material credit related impacts
in our retail home loans portfolio.
ANZ is engaging with external vendors tocontinue to explore climate-related physicalrisk data, tools and solutions to help identify,
assess and manage potential physical risks
to the residential home loans portfolio andto develop geospatial assessment capability.
Residential home loans – New Zealand
Climate can be expected to have varying levelsof impact on our customers’ properties andfinancial resilience. This year ANZ Bank New
Zealand assessed the risk to New Zealandresidential properties secured with an
ANZ home loan from two different typesof flooding – coastal and inland.
The ANZ Bank New Zealand assessment used
third-party data from New Zealand’s National
Institute of Water and Atmospheric Research

1. A global provider of climate hazard data and insurance risk modelling.

and Moody’s RMS1 to understand the potential risk
across different climate scenarios and flooding
severities.
Having completed this analysis in 2023, ANZ BankNew Zealand is now seeking to better understandwhere financial vulnerabilities may exist, and how it
can respond to these risks and support customers.
Results from this assessment will be reported by
ANZ Bank New Zealand in its 2023 climate-related
disclosure.
Agricultural sector – Australia
Agriculture is an important part of our business.
We expect some customers have faced and willcontinue to face challenges attributable to the impactsof climate change. For example during extended
drought, farmers may have a reduced ability to
repay their loans due to disruptions to business andeconomic activity and/or impacts on income andasset values and thus represent a credit risk to ANZ.
Climate variability assessments are part of agriculture
credit writing procedures for new customers, existingcustomers buying additional property, and any
customer in a region identified by ANZ as affectedby drought. We work with our Agriculture customers
to seek to limit the occurrence of financial stresscaused by climate variability (acknowledging thatclimate-related risk is likely to change over time). In
Australia, we use Australian Bureau of Meteorology(BoM) data to determine the short-term (under 12months) weather outlook. We examine variability
in average annual rainfall in recent decades to see

how climate change may affect the suitability andvolatility of farming in given regions. This process
helps inform ANZ’s strategic decision making, as
well as credit risk appetite.
Customers identified by ANZ as potentially being
less resilient to climate change may be subject toenhanced underwriting standards – for example,
loan approval may be dependent on a lower loan
to valuation ratio, higher repayments or evidenceof savings.
We recognise the need to understand how
customers manage their land and naturalenvironment, including our customers’ plans
for a changing climate.
Refer to the Metrics and Targets section of thereport at page 75 where we have this year set adata coverage target for our Large Institutional
Agribusiness Customers to encourage and support
the provision of high quality and comparable
emissions data across the sector.

Physical risk to ANZ’s operations
ANZ operates across Australia, New Zealand, Asia
Pacific, Europe and America. Countries in theseregions are vulnerable to extreme weather events,
such as those that occurred in 2022-23 resulting inflooding along the eastern seaboard of Australia andCyclone Gabrielle in New Zealand. While on occasion
these events can cause damage to ANZ property andinfrastructure, our Business Continuity and Disaster
Recovery Plans are in place to support alternativebanking arrangements for the communities affected.

Physical risks associated with climate change,such as damage to ANZ’s physical assets orbusiness disruption due to the occurrence of
natural disasters, are identified, assessed, andmanaged through ongoing application of our
Operational Risk Management Framework.
This year, ANZ conducted a climate risk
assessment, with a primary focus on evaluating
the climate physical risks associated with ourGroup-wide property network. Our goal was togain a deeper understanding of the potential
risks and challenges posed by the physicalimpacts of climate change on our data centres,
retail branches and commercial centres.
To guide our assessment, we used climate
projections from the latest Intergovernmental
Panel on Climate Change (IPCC) assessment
report. These projections helped us to identify
how climate variables are changing and thepotential impact on our business operations
by the years 2030 and 2050.
Having gained valuable insights, such as a better
understanding of the potential physical climate
risks and impacts to our property portfolio, we
have commenced a process to evaluate theeffectiveness of the existing controls for how wemanage physical climate risks within our network.
By undertaking this initiative, our objective is tosafeguard the ongoing resilience of our property
network into the future.

Governance
Strategy

Risk Management
Climate-related risk
Risk management framework
Policies and processes
Integrating climate risk
Physical risk
Metrics and Targets
Appendix
Assurance opinion

43

ANZ 2023 Climate-related Financial Disclosures

METRICS
AND TARGETS
ANZ’s Sectoral Metrics and Targets1

We are committed to transition
all operational and financed
carbon emissions from ourlending portfolio to net zeroby 2050.

For ESG targets, including operational
footprint, see page 81-84.

EnergyOverview
Governance

Sectors2030 Interim Target Reduction

StatusPage

1. Power generation

50% (2020 baseline)

ON TRACK

51

Risk Management

2. Oil and gas

26% (2020 baseline)

ON TRACK53

Metrics and Targets

3. Thermal coal (new)

100% (2020 baseline)

ON TRACK

55

Strategy

Sectoral metrics and targets

Transport (new)Sector exposures
Our approach to sectoral pathways

4a. Auto manufacturing

28% (2022 baseline)

ON TRACK57

Pathways performance dashboard
Energy sector

Manufacturing

4b. Aviation

20%3 (2019 baseline)

ON TRACK

59

4c. Shipping

10% (2022 baseline)

ON TRACK

61

5. Aluminium

30% (2021 baseline)

NOT ON TRACK

63

6. Cement

20% (2021 baseline)

ON TRACK

65

Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

Buildings

7. Steel

28% (2021 baseline)

CLOSE TO ON TRACK

67

8a. L arge-scale commercial real estate2

60% (2019 baseline)

ON TRACK69

N/A: BASELINE71

N/A: NEWLY INCLUDED

75

N/A: COMPLEMENTARY METRIC

76>10% above pathway<=10% above pathway

8b. R esidential home loans (new)On or below pathway
1. See sectoral pathways (pages 49 to 77) and page 80 for
further information. 2. Actual Performance Against ourLarge-scale commercial real estate Target up to end
2022. 3. We have restated this target due to an error. We
previously stated that our 2030 emissions intensity target
for aviation required a 30% reduction from our 2019baseline whereas, in fact, it only requires a 20% reduction
from our 2019 baseline. The target remains unchanged.

Other

9. L arge Institutional Agribusiness Customers (new)Total portfolio (new)

100% of LIAC customers

44

ANZ 2023 Climate-related Financial Disclosures

TCFD-RELATED METRICS
AND INDUSTRY EXPOSURES
We continue to disclose our credit metrics
and exposure to various sub-industries infour key sectors identified by the TCFD tobe most exposed to climate-related risks:• Energy;• Transportation;• Materials and Buildings; and• Agriculture, Food and Forest Products.
This is in response to the TCFD recommendations
that "banks should describe significant
concentrations of credit exposure to carbon
related assets" and provide a breakdown of thisdata by industry, geography, credit quality andaverage tenor.
Our overall exposure to these four sectors isaround 17% of the Group exposure at default(EAD)1, down from approximately 18% in 2022
(approximately 16% in 2021). The remaining
Group EAD is financing sectors outside thefour identified by the TCFD.
EAD breakdown for carbon exposed sectors –2023 ($bn/%)
9%
Materials
and buildings
4%
Agriculture,
food and forest
products
3%
Energy1%
Transportation
83%
Other sector EAD

17%
Carbon-exposed
sector EAD

The decrease in exposure was driven by the
Energy and Materials and Buildings sectors, whichwere partially offset by an increased exposure toAgriculture. The decrease in Energy sector this year
was due to lower exposures to the electricity and oil
and gas sectors. A small uptick in exposure to coal
was driven partly by the APRA capital reforms during
the year, and was not a result of any new lending
to thermal coal. Since 2015, we have reduced our
direct lending to thermal coal mining by around
85% – it is now around 0.02% of our Group EAD– while our direct lending to renewables projects
has increased by around 49% during the year. See
sectoral pathways on pages 49-77 for details aroundthe key drivers impacting our exposures. Decreases
in Materials and Buildings and Energy was driven
in large part by APRA capital reforms; see page 47
for an explanation of the impact of APRA’s capitalreforms. The movement in Agriculture is largely
driven by an increase in lending to our customers
in this sector; compounded by changes in foreignexchange rates to our NZ portfolio.

EAD trends for climate exposed sectors ($bn)

Overview$120

GovernanceIn terms of credit metrics, there was a small decreasein the percentage of exposures rated as investment
grade with 57% of our exposures across the four
sectors achieving this benchmark in 2023 comparedto 58% in 2022 (52% in 2021). Our non-performing
loans across the four sectors was the same as lastyear with 0.5% of sector EAD overall. The overall
trend of low and decreasing rates of non-performing
loans remains evident across the four sectors. The
consistently low levels of non-performing loans
across the four sectors identified by the TCFD
indicate that transition and physical risks of climatechange have not yet manifested as material credit
losses for ANZ.

Industry groups
and credit quality2

Strategy$100

Risk Management$80

Metrics and Targets$60

Sectoral metrics and targets$40

Sector exposures
Our approach to sectoral pathways$20

Pathways performance dashboard
Energy sector

0
Materials and Buildings
2023

2022

Agriculture, Food andForest Products

EnergyTransport sector

Transportation

Manufacturing sector

2021

Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio

Exposure at
Default ($bn)

Non-performing Loans(% of sector EAD)3

Investment Grade(% of sector EAD)

Sector

2023

2022

2021

2023

2022

2021

2023

2022

2021

Agriculture, Foodand Forest Products

44.1

42.9

41.7

0.9

1.1

1.4

44.1

43.8

36.5

Energy

29.9

31.7

27.9

0.1

0.1

0.1

90.3

89.3

85.1

Transportation

15.9

16.1

15.5

0.3

0.4

1.7

72.8

66.7

67.2

Materials and Buildings

103.9

104.7

92.3

0.5

0.4

0.5

50.0

52.5

47.2

Total

193.8

195.4

177.4

0.5

0.5

0.7

56.7

57.8

52.4

1. EAD excludes amounts for ‘Securitisation’, and for ‘Other assets’ prior to March 2023 (included from March 2023 due to the implementation of APRA’s new capital framework), whereas CRWA is inclusive of these asset classes,
as per APS 330. EAD data provided is on a Post CRM basis, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. 2. Values may not add to totals due to rounding. 3. Non-performing
loans have been restated to align with APS 220.

Appendix
Assurance opinion

45

ANZ 2023 Climate-related Financial Disclosures

This year, we continue to disclose a more detailed
industry and sub-industry breakdown of our
exposures to the four sectors identified by the TCFD.

Exposure at default ($bn)

Overview

Climate exposed sub-industry

2023

2022

2021

Subsector trends in EAD – Energy ($bn)

Agriculture, Food and Forest Products

$44.1

$42.9

$41.7

$20

Agriculture

$31.5

$30.2

$30.6

$18

Beverages

$4.0

$3.5

$3.3

$16

Paper and Forest Products

$1.0

$0.8

$0.8

Packaged Foods and Meats

$7.6

$8.4

$7.0

$10

Energy

$29.9

$31.7

$27.9

$8

Coal1

$0.9

$0.7

$1.1

Electric Utilities2

$13.5

$14.9

$12.3

Oil and Gas3

$15.5

$16.1

$14.6

Transportation

$15.9

$16.1

$15.5

Air Freight

$3.1

$3.0

$3.0

Automobiles

$4.4

$5.4

$4.5

Maritime Transportation

$1.4

$1.6

$1.5

Passenger Air

$0.3

$0.1

$0.2

Rail Transportation

$1.8

$1.7

$1.8

Trucking Services

$4.9

$4.3

$4.5

Materials and Buildings$103.9$104.7$92.3

Capital Goods

$21.2

$21.4

$17.3

Chemicals

$3.5

$2.8

$2.1

Construction Materials

$1.3

$1.3

$1.3

Metals and Mining

$8.0

$8.6

$7.2

Real Estate Management and Development

$69.9

$70.6

$64.4

Grand Total$193.8$195.4$177.4

$14
$12

$6
$4
$2
0
Coal
2023

2022

Electric Utilities

Oil and Gas

2021

1. Coal mining includes exposures to metallurgical (coking) coalused for steel making $0.65bn and thermal coal used for energy
generation $0.26bn. Rehabilitation bonds will continue to beprovided to existing customers with some thermal coal exposure
to ensure their responsibilities with exiting mine sites are fulfilled.
The purpose of a rehabilitation bond is related to environmental
remediation and not financing of the coal mining activity itself. As at
30 September 2023, rehabilitation bonds were $169m, which equates
to 64.7% of our exposure to thermal coal mining under ANZSIC code
1102. Australian and New Zealand Standard Industrial Classification(ANZSIC) has been developed for use in the compilation and analysis
of industry statistics in Australia and New Zealand. The Australian
Bureau of Statistics and Statistics New Zealand jointly developed
this classification to improve the comparability of industry statistics
between the two countries and with the rest of the world. 2. Electricutilities includes exposures to electricity generators that own or
operate a mix of thermal and renewable generation assets as wellas transmission and distribution infrastructure. 3. Exposure to oiland gas includes all of the oil and gas value chain such as exploration,
extraction, transport, refining and retail. ANZ's Full Year Results
Investor Discussion Pack includes exposure to "upstream" explorationand extraction only as the focus is on resources (mining) exposurein line with ANZSIC industry groupings.

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

46

ANZ 2023 Climate-related Financial Disclosures

OUR APPROACH TO
SECTORAL PATHWAYS
Financed portfolio emissions

Actions to achieve our targets

This section explains how our financing1 is responding
to the impacts of climate change. It includes ourprogress towards transitioning nine of our highest
emitting sectors in line with the goals of the Paris
Agreement, how we engage with customers to help
them in their transition towards net zero, and ourwork to assess and manage climate risks.

We discuss our sectoral pathways customers’
progress as part of our large emitters engagement
program, outlined on pages 22-24 of this report. The
achievement of our targets will partly depend on
our success in engaging with these customers toseek improved transition plans, including seeking“Paris-aligned” targets and whether they are on track
to meet these targets.

This year, we are disclosing our progress against
our existing pathways in six key sectors and setting
four new pathways and targets in two more sectors:
the thermal coal sector and for the transport sector,
within three sub-sectors: auto manufacturing,
aviation and shipping.
We aim to progressively expand our coverageof key sectors up to end 2024, in line with our
NZBA commitment and the evolution of globally
recognised standards and methodologies. We
expect that by end 2024 we will have establishedpathways and targets for up to nine sectors
representing at least 75% of our financed emissions.

We acknowledge that in some cases, supporting
customers’ transition plans may mean the emissions
intensity of our portfolio goes up for a period. We
consider this is the appropriate step for us to take tosupport real-world reductions in emissions over the
longer term, provided those customers have, or arein the process of developing, robust and credible
transition plans which we aim to progressively assess
for customers within those pathways.
As our customers gradually electrify, retrofit or bring
online lower emissions production assets, and switch
to alternate fuels, we expect to see the emissions
intensity of our portfolios (for relevant targets)decline towards our 2030 targets. In Australia, theGovernment’s Safeguard Mechanism is intended
to assist in the decarbonisation of higher emitting

sectors, however for some of our sectors such as steel,our customers' facilities are geographically distributedin Asia as well as Australia. Further, we note concerns
in some industries, such as cement that the Safeguard
Mechanism may incentivise emissions leakage tooccur via a shift to imported materials.
Finally, each sector will have different challenges
and opportunities, which we have outlined in moredetail in the ‘actions to achieve targets’ of each of
the sectors below.

Key elements of our approachto sectoral pathways
In building our approach to our portfolio
financed emissions, and their associated targets
and pathways, we considered the following
important key elements:
Science-based targets
Decision useful metrics
Best available data

Science-based targets

Overview

In setting our sectoral pathways and targets, wehave referenced the International Energy Agency’s(IEA) Net Zero Emissions by 2050 World Scenario(NZE 2050) for power generation, oil and gas, steel
and cement, along with other relevant sectorspecific, science-based scenarios in other sectors(details provided in the discussion of individual
sectoral targets and pathways on the following
pages). While we have used the IEA’s 2021 data
as a benchmark, we are aware the NZE 2050 was
updated in late September 2023. Given we intend
to review each pathway at least every five years
in line with NZBA guidance, we will consider any
updates to the NZE 2050 or other industry scenarios
as part of that review, which we anticipate would becompleted by end 2025 given we set our first targets
in 2021.

Governance

We are also guided by the Global GHG Accounting
and Reporting Standard for the Financial Industry
published by the Partnership for Carbon Accounting
Financials (PCAF) to assess data quality, and for
calculation methods. The use of science-based
scenarios and methodologies ensures our targets
are, at a minimum, aligned with the goals of theParis Agreement.

Large Institutional
Agribusiness Customers

1. Our pathways are based on our lending portfolio, which does not include facilitated emissions eg. debt capital markets facilitation. As at October 2023, suitable standards to allow financial institutions to calculate facilitated emissions are still under development.

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

Total lending portfolio
Appendix
Assurance opinion

47

ANZ 2023 Climate-related Financial Disclosures

Decision useful metrics
For each sector, we have defined a relevant metricand set specific targets and pathways, disclosed
below. These targets and pathways will help
provide guidance for our business teams who makedecisions on how we finance customers in these
sectors. These pathways are providing an important
input to our decision making as we seek to meet
our interim 2030 targets.
Our choice of an emissions intensity target
recognises that for relevant sectors, such asaluminium, cement and steel they are likely to
be key materials that will be used in technologies
essential for the transition to net zero emissions.
For some sectors, we have disclosed additional,
or complementary metrics, that we consider
useful to inform our decision making.

Best available data
Developing and reporting metrics is a new andevolving practice, which depends on good quality
data. We aim to source the highest quality data
available, recognising that data limitations exist
even in sectors with well-established reporting
protocols. To maximise the quality of the data weused to calculate our financed emissions, we are
guided by the Global GHG Accounting andReporting Standard for the Financial Industry

published by the PCAF, and have provided data
quality scores for absolute emissions of relevant
sectors, including steel, aluminium, cement, and oil
and gas. We continue to develop our methodologies
to improve data quality where required, as better
quality data becomes available.

Use of Exposure at Default (EAD)
ANZ has taken a conservative approach incalculating our financed emissions by using EAD
instead of the outstanding amount of loans andinvestments. EAD represents the Group's exposure
to each sector based on APRA’s calculation formulawhich includes total committed loans (drawn plus
a proportion of off-balance sheet exposures as
specified by APRA).
This is a departure from the PCAF recommended
approach, which recommends including theoutstanding amount of loans and investments
ie. excluding undrawn amounts.
While this approach means that we are attributing
a higher proportion of our customers’ emissions,
we consider this provides a more accurate
representation of our support to our customers andthe transition risks that we are potentially exposed
to. The choice of the committed loan amount, rather
than the outstanding amount, also helps minimise
the risk of volatility in customer drawdowns that
may impact the achievement of our targets.

APRA’s capital reforms

Overview

In January 2023, ANZ implemented theAustralian Prudential Regulatory Authority’s (APRA)
Basel IV rules for the calculation of capital. The
implementation of these rule changes the way EAD
is calculated. The actual impact will vary from sector
to sector depending on product mix. For example,
for the power generation portfolio the impact has
been a decrease in EAD. The actual impact on the
power generation emissions intensity metric is
however negligible, given it is derived from a
portfolio-weighted average, and not an absoluteemissions measure. This means even though
our portfolio EAD has decreased, the relativity of
exposures across generation assets / companies
with different emissions intensities has notchanged materially.

GovernanceIn general the explanation above about themateriality of the rule changes on EAD is applicableto the sectors in respect of which we have set
emissions intensity metrics. For our oil and gas
sector there are specific impacts from APRA’s capitalreforms, which are explained in more detail on
page 54.

Buildings sector

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
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

48

ANZ 2023 Climate-related Financial Disclosures

Sectoral value chain activity coverage

Overview

Our sectoral pathways and targets cover eight sectors, including three sub sectors, in the chart below, which also highlights the part of each sector's value chain on which we focus.

Governance
Strategy

Power Generation

Generation

Distribution

Electric Off-takers

Oil and Gas

Upstream

Mid and Downstream(integrated companies only)

Trading

Risk Management

Metrics and Targets
Sectoral metrics and targets
Sector exposures

Thermal Coal

MiningTransport

Our approach to sectoral pathways

Power generation

Pathways performance dashboard
Energy sector

Transport –Auto Manufacturing

Suppliers

Auto manufacturers

Auto services

Transport sector
Manufacturing sector

Transport –Aviation

Suppliers

Transport –Shipping

Airplane manufacturers

Suppliers

Ship manufacturers

Buildings sector

Airline services

Shipping operator / owners

Large Institutional
Agribusiness Customers

Recycling

Total lending portfolio
Appendix

Aluminium

Bauxite mining

CementSuppliers

Steel

Mining iron andmetallurgical coal

Large-scale Commercial
Real Estate

Suppliers

Part of value chain within target scope

Alumina refining

Not in scope

Processing, rollingand extrusion

Aluminium smelting

Concrete bagging,ready mix and precast

Production

Transport

Construction

Production

OwnersManufactureof products

RecyclingEnd-users

Tenants

Recycling

Maintenance

Recycling

Recycling

Assurance opinion

49

ANZ 2023 Climate-related Financial Disclosures

PORTFOLIO EMISSIONS PATHWAYSPERFORMANCE DASHBOARD
Oil and gas

1. We have restated this target due to an error. We previously
stated that our 2030 emissions intensity target for aviation
required a 30% reduction from our 2019 baseline whereas, infact, it only requires a 20% reduction from our 2019 baseline.
The target remains unchanged.

400
200

2030 Target
Pathway (-28%)

Actual Performance
Against our Target

IEA Net Zero Emissions
2050 Pathway (2021)

EU emissions standard

IEA Net Zero Emissions
2050 Pathway (2021)

2030 Target
Pathway (-20%)1

2050

2045

2040

2035

2030

2025

2019

Actual Performance
Against our Target

Appendix

2050

2045

2040

2035

2030

Assurance opinion

0.40
0.30
0.20
0.10
0

0
2040

0.50

Actual Performance
Against our Target
IEA Net Zero Emissions
2050 Pathway (2021)

2030 Target
Pathway (-10%)

2050

0

600

ANZ vs. pathway
-12%

2045

20

Manufacturing sector

Total lending portfolio

2040

40

800

Transport sector

Large Institutional
Agribusiness Customers

0.60

ANZ vs. pathway-9%

Energy sector

Buildings sector

2035

60

2030 Target
Pathway (-100%)IEA Net Zero Emissions
2050 Pathway (2021)

Absolute Emissions (Mt CO2-e)

80

Pathways performance dashboard

Shipping

1,200
Emissions Intensity (gCO2-e/RPK)100

Our approach to sectoral pathways

Actual Performance
Against our Target

Estimated Performance(post-APRA reform)

1,000

120

Sector exposures

2.0

2020

2050

2045

2040

2030

2035

IEA Net Zero Emissions
2050 Pathway (pre-APRA
reform)(-26%)

Aviation

2035

Go to page 61

2025

Updated IEA Net Zero
Emissions 2050 Pathway(post-APRA reform)(-26%)

2030

Shipping

2020

Global Average
Emissions Intensity

2025

Go to page 59

2040

2020

IEA Net Zero Emissions
2050 Pathway (2023)

140

Sectoral metrics and targets

3.0

0

Actual Performance
Against our Target

ANZ vs. pathway-5%

Metrics and Targets

4.0

1.0

2030 Target
Pathway (-50%)

2022

Aviation

2.0

Actual Performance
Against our Target

Auto manufacturing

Emissions Intensity (gCO2-e/vkm)

Go to page 57

4.0

0

160

Auto manufacturing

6.0

5.0

2030

50

New 2030
Target 9.40 Mt

6.0

2025

100

8.0

Risk Management

7.0

2025

150

10.0

Governance
Strategy

8.0

2022

200

12.0

ANZ vs. pathway
-94%

9.0
Absolute Emissions (MtCO2-e)

250

Previous 2030
Target 10.36 Mt

Overview

10.0

ANZ vs. pathway
-25%

14.0

0

Go to page 55

Transport

300

2050

Thermal coal

350

2035

Go to page 53

400

2030

Oil and gas

ANZ vs. pathway
-12%

450

2025

Go to page 51

Emissions Intensity (kg CO2-e/MWh)

500

Power generation

Thermal coal

16.0
ANZ Financed Emissions (Mt CO2e)Power generation

2045

EnergyANZ 2023 Climate-related Financial Disclosures

Cement

0.40
0.30
0.20
0.10

Risk Management
1.5

Metrics and Targets
1.0

Sectoral metrics and targets
Sector exposures

0.5

Our approach to sectoral pathways
Pathways performance dashboard
2050

2045

2040

2050

2045

2040

2035

2030

2025

0
2021

2021

0

Governance
Strategy

2.0

2035

0

Go to page 67

0.50

ANZ vs. pathway
+8.5%

2030

2.0

0.60

2.5

2025

4.0

ANZ vs. pathway-2.8%

Overview

2020

GHG Intensity (tCO2-e/t Cement)

Steel

6.0

2040

Go to page 65

8.0

2035

Cement10.0

2030

Go to page 63

Steel

0.70

ANZ vs. pathway
+13%

2025

Aluminium

GHG Intensity (tCO2-e/t Aluminium)

12.0

GHG Intensity (tCO2-e/t Steel)

Aluminium

2050

Manufacturing

2045

50

Actual Performance
Against our Target

2030 Target
Pathway (-30%)

Actual Performance
Against our Target

2030 Target
Pathway (-20%)

Actual Performance
Against our Target

2030 Target Pathway(-28%)

International Aluminium
Institute 1.5°C Pathway

Global average
International Aluminium
Institute 1.5°C Pathway

IEA Net Zero Emissions
2050 Pathway (2021)

Global Average IEA
Tracking Report 22

IEA Net Zero Emissions
2050 Pathway (2021)

World Steel 2020 Average
Emissions Intensity

Energy sector
Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio

50.0
40.0
30.0
20.0
10.0

Large-scale commercial real estate – shopping centres
GHG Intensity (kg CO2-e/m2 NLA)

60.0

ANZ vs. pathway
11.8%

90.0
80.0

Actual Performance Against
our Target up to end 2022
IEA Beyond 2°C Scenario(B2DS) Alignment Pathway

60.0
50.0
40.0
30.0
20.0
10.0

Actual Performance Against
our Targetup to end 2022
IEA Beyond 2°C Scenario(B2DS) Alignment Pathway

2030 Target
Pathway (-60%)

2050

2045

2040

2035

2030

2025

2019

2050

2045

2040

2030 Target
Pathway (-60%)

Appendix
Assurance opinion

70.0

0

0
2035

Go to page 69

70.0

2030

Large-scale commercial real estate –shopping centres

80.0

2025

Go to page 69

ANZ vs. pathway
25.6%

90.0

2019

Large-scale commercial real estate –office buildings

Large-scale commercial real estate – office buildings
GHG Intensity (kg CO2-e/m2 NLA)

Buildings

51

ANZ 2023 Climate-related Financial Disclosures

ENERGYPower generation

Graph 1.1: Power generation

Emissions Intensity (kg CO2-e/MWh)500

ANZ vs. pathway
-12%

450
400

The key design choices we used to calculate our 2030 power generation emissions intensity target
are summarised in Table 1 below.

Overview

Table 1 – Key design choices in calculating 2030 power generation target

Strategy2030 Target• 50% reduction in emissions intensity from 2020 baseline

ANZ Customers
Included• Companies that own or operate one or more electricity generation
facilities that dispatch electricity into transmission grids, and that wehave more than $1m exposure at default (EAD) at the end of
our financial reporting year (September 30)5

350
300

GovernanceRisk Management

Metrics and Targets
Sectoral metrics and targets
Sector exposures

Emissions Included• Scope 1 (from electricity generation activities only)

Our approach to sectoral pathways

200

Metric• Emissions intensity of electricity generation (kgCO₂-e/MWh)Pathways performance dashboard

150

Financing Activities
Included• Exposure at default. This represents the Group's exposure to eachsector based on APRA’s calculation formula which includes totalcommitted loans (drawn plus a proportion of off-balance sheet
exposures as specified by APRA)

250

100
50

Actual Performance
Against our Target

2030 Target Pathway (-50%)

IEA Net Zero Emissions
2050 Pathway (2023)1

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

0

Global Average
Emissions Intensity

Power Generation Metrics Summary
Metric

2020

2022

2023

Emissions intensity (kg CO₂-e/MWh)

2252

2843

169

Absolute financed emissions (Mt CO₂-e)

Not calculated

Not calculated

5.28

Portfolio-wide intensity (kg CO₂-e/$ lent)

Not calculated

Not calculated

0.56

Not scored

Not scored

1.48

Data Quality Score4

Current EAD $bn (% of Group EAD)

Attribution Approach• Portfolio-weighted approach (based on the ratio of ANZ’s financing
to individual customers relative to ANZ’s total financing to the power
generation sector)

Energy sector
Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio

Benchmarking Scenario• International Energy Agency (IEA) Net Zero Emissions by 2050 World
Scenario (NZE 2050) (2021)

Appendix

Key External Data
Sources• Customer disclosures

Assurance opinion• Australian Clean Energy Regulator• International Energy Agency• Asset Impact6

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.

9.35 (0.80%)
1. International Energy Agency, World Energy Outlook 2023. 2. This is a restatement of the 2020 baseline we reported in 2022 of 237
kgCO₂-e per MWh. 3. This is restatement of the 2022 performance figure we reported in 2022 of 314 kgCO₂-e per MWh. 4. The data
quality score was calculated in accordance with guidance made available by the Partnership for Carbon Accounting Financials (PCAF)
in the Global GHG Accounting and Reporting Standard for the Financial Industry – Part A (available here). 5. Excludes captive power
generation facilities that are not connected to an electricity grid. 6. Asset Impact.

52

ANZ 2023 Climate-related Financial Disclosures

POWER GENERATION (CONTINUED)

Performance against target

including 1GW in Australia. This brings to 42%,the proportion of our power generation portfoliothat is fully dedicated to renewable projects orcompanies whose generation facilities wereentirely composed of renewable technologies(% of total exposure).

Graph 1.2 – Power generation portfolio emissions intensity movements

Emissions Intensity (kg CO2-e/MWh)

300

284

250

225

-35

200

169
-78

150

-2

100

• We are also continuing to support customers
demonstrating a strong commitment to transition
their portfolios to sustainable energy sources
and away from fossil fuels which is critical toachieving real-world reductions in emissions
over the longer term.

Actions to achieve 2030 target50
0
ANZ 2020 (Baseline)(Restated)
Increase

Decrease

ANZ 2022(Restated)

Portfolio Customer
Movements

Changes in
Exposures

Customer Emissions
Performance

ANZ 2023

Total

The emissions intensity of our power generation
portfolio has declined substantially over the past
year – from 284kgCO₂ per MWh in 20221 to 169
kgCO₂ per MWh – a 41% reduction. This is 25%
below our 2020 baseline of 225kgCO₂ per MWh2 and
12% below our target pathway, putting us back on
track to meet our target of halving the emissions
intensity of our portfolio by 2030. Our portfolio
remains well below the global average emissions
intensity of 460 kgCO₂/MWh,3 which needs to reachnet zero emissions by 2040 to stay aligned with the
1.5°C temperature ambition of the Paris Agreement.

There are several reasons for the decrease inemissions intensity of our portfolio during 2023:• The largest contributing factor was the repaymentof short-term facilities we provided to customers
in 2022 to help them manage unprecedented
volatility in Australia’s National Electricity Market.
It was this support of existing customers that was
the primary cause of the large spike in emissions
intensity of our portfolio during 2022.
• We have also continued to steer our portfolio
towards more sustainable energy sources in 2023
with 2.3GW of new renewables capacity coming
online during 2023 that we helped to finance –1. This is restatement of the 2022 performance figure we reported in 2022 of 314 kgCO₂-e per MWh. 2. This is a restatement of the 2020
baseline we reported in 2022 of 237 kgCO₂-e per MWh, however we have retained our 50% reduction target meaning that our 2030 target
has now declined to 113 kgCO₂-e per MWh. 3. International Energy Agency, World Energy Outlook 2023 (p281). 4. IEA, World Energy
Outlook 2023. 5. https://www.iea.org/energy-system/electricity. 6. IEA, World Energy Outlook 2023. 7. IEA, World Energy Outlook 2023.

Since 2018, ANZ has been engaging with its largest
emitting business customers, including 12 that own
or operate power generation assets. Our engagementwith these customers has been focused on
encouraging them to strengthen their low carbon
transition plans, and we have seen a number ofcustomers improve their plans over this period.
While improvements in our customers’ emissions
performance made a small contribution to the overall
decline in the emissions intensity of our portfolio
during 2023, we expect larger declines to come infuture as our customers gradually bring online newclean generation capacity and retire their existingfossil fuel assets. More information about ourengagement approach is available on pages 22-24.
We are actively managing our power generation
portfolio in a way that will support the achievementof our 2030 target. To assist with this portfolio
steering towards lower emitting projects andcustomers, we apply specific policy measuresthat are differentiated between existing andnew customers, as detailed in our energy policy.
ANZ continues to grow our direct lending to
renewable energy projects as part of our drive tofund and facilitate at least $100 billion by 2030

in social and environmental outcomes throughcustomer activities and direct investments by ANZ,
includes activities to protect nature and biodiversity.
See page 20 for more detail.

Overview

Opportunities for emissions reduction
and challenges

Risk Management

Power generation is currently the largest source ofCO₂ emissions globally, accounting for almost 40% of
all energy related CO₂ emissions.4 While installationof wind and solar PV continues to grow strongly,
emissions from the power sector reached an all-timehigh in 2022 and are not currently on track to reachnet zero milestones.5

Metrics and Targets

A global tripling of renewable energy capacity by
20306 has therefore been identified as the mostimportant contributor to emissions reductions thatwould put the energy sector on a pathway to limit
warming to 1.5°C. This needs to be supported by aramping up of electrification and a doubling in thepace of energy efficiency improvements that will
all be important contributors in driving down fossil
fuel demand.

Transport sector

To support the delivery of these key milestones, the
IEA has identified the need for significant scaling up
of investment in clean energy by 2030, with the ratio
of investment in fossil fuels to investment in clean
energy technologies rising from 1:1.8 in 2023 to 1:10
by 2030 under its Net Zero Emissions Scenario.7
Our choice of an emissions intensity reduction target
recognises that under 1.5°C aligned scenarios, there
is a need for substantially more electricity to begenerated in 2050 compared with today. The
additional demand is met mainly by low emissions
sources of electricity while the share of unabated fossil
fuels declines sharply. Because the power sector is
critical to decarbonise other sectors of the economy,
like transport, industry and buildings, it needs to be
the first to reach net zero emissions, before 2045.

Governance
Strategy

Sectoral metrics and targets
Sector exposures
Our approach to sectoral pathways
Pathways performance dashboard
Energy sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

53

ANZ 2023 Climate-related Financial Disclosures

Oil and gas

Graph 2.1: Oil and gas
ANZ vs. pathway-25%

ANZ Financed Emissions (Mt CO2e)

16.0
14.0

Previous 2030
Target 10.36 Mt

12.0

The key design choices we used to calculate our 2030 oil and gas target are summarised in Table 2 below.

Overview

Table 2 – Key design choices in calculating 2030 oil and gas target

Governance2030 Target• 26% reduction3 in absolute financed emissions from 2020 baseline

ANZ Customers
Included• Exploration and production (includes dedicated upstream
companies, and LNG producers)• Integrated oil and gas producers• Customers above are included where ANZ’s exposure is at least$10 million

10.0
8.0
New 2030
Target 9.40 Mt

6.0

Emissions Included

4.0
2.0

Actual Performance
Against our Target

IEA Net Zero Emissions
2050 Pathway (pre-APRA
reform)(-26%)

Updated IEA Net Zero
Emissions 2050 Pathway(post-APRA reform)(-26%)

2050

2049

2048

2047

2046

2045

2044

2043

2042

2041

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

0

2020

14.4

8.9

Physical emissions intensity (kg CO₂-e/GJ produced)

70.8

70.9

69.4

Portfolio-wide intensity (kg CO₂-e/$ lent)

1.33

1.50

1.33

• Not scored• Not scored• 1.45• 3.00• 1.55• 3.00Current EAD $bn (% of Group EAD)

Our approach to sectoral pathways
Pathways performance dashboard
Energy sector
Manufacturing sector• ANZ financing to customers as a proportion of customer value.
Customer values are based on the following definitions:

Total lending portfolio– Public company: Enterprise value including cash (EVIC)

2023

14.0

Sector exposures• Exposure at default: 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)

Attribution Approach

Absolute financed emissions (Mt CO₂-e)

1

Sectoral metrics and targets

Financing Activities
Included

Estimated Performance(post-APRA reform)

2022

Metrics and Targets• Absolute emissions (in million tonnes CO₂-e) (Mt CO₂-e)– Private company: Book value of debt and equity

MetricRisk Management

MetricOil and Gas Metrics Summary

Data Quality Score2• Scope 1 & 2• Scope 3• Scopes 1, 2 and 3 (Category 11, product use) for all companies
included in scope, preferably on an equity-based accounting
approach where that data is available from customers

Strategy

Benchmarking Scenario• International Energy Agency (IEA) Net Zero Emissions by 2050 World
Scenario (2021)

Key External
Data Sources• Customer disclosures• Wood Mackenzie• Rystad• International Energy Agency• American Petroleum Institute• Intergovernmental Panel on
Climate Change

6.67 (0.57%)
The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.

1. We have restated our 2020 and 2022 results to reflect changes in data sources that we have relied on to calculate Scope 3 emissions for some of our customers. These restatements also build in the changes brought about by more precise attribution of our finance to the activities of two customers
in our portfolio and correction of minor data issues. 2. The data quality score was calculated in accordance with guidance made available by the Partnership for Carbon Accounting Financials (PCAF) in the Global GHG Accounting and Reporting Standard for the Financial Industry – Part A (available here).
3. Our 26% reduction target is now from an adjusted 2020 baseline, with the rationale for this change, described in detail in the 'Target Adjustment' section below. Note we have also set a 40% EAD reduction target by 2025 from a 2020 baseline, which complements our financed emissions target.

Transport sector
Buildings sector
Large Institutional
Agribusiness Customers

Appendix
Assurance opinion

54

ANZ 2023 Climate-related Financial Disclosures

OIL AND GAS (CONTINUED)

While maintaining our target to reduce absolute
financed emissions by 26% by 2030, during 2023
ANZ adjusted downwards the 2020 baseline forthe target. This will result in a lower level of target
absolute emissions by 2030. We have done thisfollowing the introduction of new APRA Basel IV
rules that alter the way EAD is calculated. For our oil
and gas portfolio, the aggregate impact of thischange has been a material reduction in EAD, whichmeans a lower proportion of our customers’ Scope 1,
2 & 3 emissions is attributed to us.1
Our adjusted 2020 baseline (used only for the
purposes of calculating a 26% emissions reduction
target) has been estimated at 12.7Mt, leading
to a revised 2030 target of 9.4Mt.

Performance against target
Graph 2.2 – Oil and gas portfolio emissions intensity movements
16.0

14.4

14.0
Financed Emissions (Mt CO2e)Target Adjustment

13.0
(1.3)

12.0
10.0

8.9

(3.2)

8.0

(1.0)

6.0
4.0
2.0
0
2022

Increase

Decrease

APRA capitalreforms (est.)

2022 (post-APRA
capital reforms)

Changes in
exposure &valuations

Customeremissionsperformance

2023

Total

Our 2023 financed emissions of 8.9 Mt CO₂-e is 30%
below our updated 2020 baseline of 12.7Mt and 25%
below our target pathway. This decline was due to a
combination of factors, which are summarised below:• Higher energy prices translated into higher
company valuations, meaning providers of debt
capital – like ANZ – are attributed a smaller
proportion of our customers’ emissions• Decrease in EAD from loan amortisation
and active portfolio management

To complement our financed emissions target
we are also setting a 40% EAD reduction target
by end 2025.
Given that financed emissions are calculated froma combination of factors that are both within andoutside of ANZ's control, we encourage stakeholders
to take a longer-term view of our progress and the‘trend’ in our financed emissions, rather thanfocusing on year-on-year outcomes.

Actions to achieve 2030 target

Overview

We recognise that achieving our 2030 target
will require a re-weighting of our portfolio towards
customers with stronger emissions reduction
targets and diversification strategies.

Governance

To help achieve this portfolio re-weighting, we willcontinue engaging with our customers in our oil andgas portfolio, seeking transition plans by end 2025
in line with our Climate Change Commitment andExtractive Industries Policy. This engagement isimportant so that we can identify which customers
need to improve their plans, which will be factored
into our lending decisions.

Strategy
Risk Management

Metrics and Targets
Sectoral metrics and targets
Sector exposures
Our approach to sectoral pathways
Pathways performance dashboard
Energy sector

Opportunities for emissions reduction
and challenges

Transport sector

Our choice of an absolute emissions reduction
target recognises that there are limited opportunities
to fully reduce the carbon intensity of fossil fuelproduct in all 1.5°C aligned scenarios.

Buildings sector

In relation to their own operations, a priority for oil
and gas companies is to minimise methane leaks
through a focus on leak detection and repair.
Other important steps include avoidance of
non-emergency flaring and venting along withsignificant electrification of upstream operations.
In relation to Scope 3 emissions generated fromthe burning of oil and gas products, a reduction
will depend on the combined actions of businesses,
governments and consumers. These Scope 3
emissions typically account for 80–90% of emissions
for the sector.

• Improved emissions performance by
our customers.

1. While these APRA capital reforms only came into effect from 1 January 2023, we see it as important to benchmark our current and future performance against a consistent set of rules, hence the reason why we have estimated what our financed emissions for the 2020 year would have been using
the APRA Basel IV rules (approximately 9.3% downward revision). We have also estimated our 2022 financed emissions using the new APRA Basel IV rules.

Manufacturing sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

55

ANZ 2023 Climate-related Financial Disclosures

Thermal Coal
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.

Graph 3.1: Thermal Coal
ANZ vs. pathway
-94%

9.0
Absolute Emissions (MtCO2-e)

8.0
7.0

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

6.0

4.0
3.0
2.0
1.0

2030 Target Pathway (-100%)

2050

2049

2048

2047

2046

2045

2044

2043

2042

2041

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

0

Emissions Included• Scope 1, 2 and 3 (category 11, product use) for all companies
included in scope4

Our approach to sectoral pathways

Metric• Absolute emissions (in million tonnes CO₂-e) (Mt CO₂-e)

Energy sector

Financing Activities
Included• Exposure at default. This represents the Group's exposure to eachsector based on APRA’s calculation formula which includes totalcommitted loans (drawn plus a proportion of off-balance sheet
exposures as specified by APRA
• ANZ financing to customers as a proportion of customer value.
• Customer values are based on the following definitions:

Thermal Coal Metrics Summary
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• 3.000.08 (0.01%)

Sector exposures
Pathways performance dashboard• Rehabilitation bonds and transaction banking are not included
Attribution Approach

Current EAD $bn (% of Group EAD)

Metrics and Targets

4

2020

Risk Management

Sectoral metrics and targets

IEA Net Zero Emissions
2050 Pathway (2021)

MetricStrategy• Customers above are included where ANZ’s exposure is at least$1 million

5.0

2020

Governance

Table 3.1 – Key design choices in calculating 2030 thermal coal financed emissions target

10.0

Actual Performance
Against our Target

Overview– 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

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.

1. The data quality score was calculated in accordance with guidance made available by the Partnership for Carbon Accounting Financials (PCAF) in The Global GHG Accounting and Reporting Standard for the Financial Industry, December 2022. 2. ANZSIC has been developed for use in thecompilation and analysis of industry statistics in Australia and New Zealand. The Australian Bureau of Statistics and Statistics New Zealand jointly developed this classification to improve the comparability of industry statistics between the two countries and with the rest of the world. 3. Includes
emissions from thermal coal production only. Emissions from metallurgical coal production are not included in the scope of this target. 4. We will continue to provide rehabilitation bonds for those existing customers with some thermal coal exposure to ensure their responsibilities with exiting minesites are fulfilled. The purpose of a rehabilitation bond is related to environmental remediation and not financing of the coal mining activity itself. As at 30 September 2023, rehabilitation bonds were $169m, which equates to 64.7% of our exposure to thermal coal mining under ANZSIC code 1102.

Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

56

ANZ 2023 Climate-related Financial Disclosures

THERMAL COAL (CONTINUED)

Performance against target
Financed scope 1, 2 and 3 emissions included in thispathway 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 outlined in our Climate Change
Commitment has contributed to our progress
to date.

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 coalmining shall be included in the scope of targets andspecifies that metallurgical coal is considered within
the value chain of the iron and steel sector.2 ANZ’s
thermal coal target includes ANZSIC code 1102, i.e.
those customers for whom thermal coal mining istheir predominant activity3. The target does notinclude diversified miners or metallurgical coalminers that produce thermal coal as a by-product(i.e. customers who are not classified as ANZSIC
code 1102).
Analysis of this 5% revenue threshold found thatdiversified miners and metallurgical coal miners that
produce thermal coal as a by-product, would fall inand out of the target boundary on any given year inline with commodity prices. This creates challenges
in both reporting and setting a target for thesecustomers at this stage.

Given our active portfolio management in linewith our Extractives Industry Policy outlined in our
Climate Change Commitment, our thermal coal
exposures are now primarily within our metallurgicalcoal miners that produce thermal coal as a byproduct and diversified mining customers’ portfolio’s(through corporate lending facilities). The
breakdown of our financed emissions from eachcustomer type is shown in the pie chart below. In
2024, we will conduct further analysis and engage
with the NZBA and our customers to understand
how we might achieve closer alignment to the
NZBA’s guidelines whilst managing the real-world
implications of fluctuating commodity prices andvariations in production volumes. This is important
given that many of our diversified mining customers
are some of the world's largest producers oftransition metals and minerals.
Table 3.2 – 2023 Total thermal coal financed
emissions by customer type (MT CO₂-e)
Customer Category

Thermal Coal
2023
TargetMining companies whose
predominant activity isthermal coal production(ANZSIC code 1102)

0.39

Metallurgical coal minersthat produce thermal coal
byproduct*

1.44 Not included

Diversified miners that
produce thermal coal*1.44 Not included* Contributing 5% revenue or more

IncludedActions to achieve 2030 target
Our lending provided directly to thermal coal is
expected to continue to decline. In line with ourpolicy 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 exposures4, or directly
finance new thermal coal mines or power plants.5
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 toreview having regard to ANZ’s Climate Change
Commitment prior to proceeding. For further
details on our enhanced due diligence refer topage 11.

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.

Overview

Efforts can be made to reduce scope 1 and 2
emissions of coal mining for example through:Risk Management

Governance
Strategy

Metrics and Targets
reducing coal mine methane emissions;

Sectoral metrics and targets
Sector exposures

use of biofuels and electric powered
alternatives to replace diesel use in mining
equipment; andrenewable energy investments.

Opportunities for emissions reduction
and challenges
Scope 3 emissions derived from combustionof thermal coal typically accounts for morethan 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 forsale in thermal coal mines. While this accounting
approach helps to minimise the risk of double
counting of emissions, we would note that somedouble counting of scope 3 emissions from thermal
coal may occur given this may make up the Scope 1
emissions of coal-fired power generators in our
power generation metric.

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 notclassified as ANZSIC code 1102). 2. The NZBA ‘Guidelines for Climate Target Setting for Banks’. 3. Includes emissions from thermal coal production only. 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 ANZSIC code 1102). Emissions from metallurgical coal production are not included in the scope of this target. 4. Where thermal coal accounts for more than 10% of revenue. 5. Our lending is informed by our evolving social, environmental and credit policies,
which outlines our approach to thermal coal. Information on our policies is available here: https://www.anz.com.au/about-us/esg-priorities/fair-responsible-banking/responsible-business-lending/. 6. Proportion of thermal coal production in line with equity stake in the production facility.

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

57

ANZ 2023 Climate-related Financial Disclosures

TRANSPORT
Overview

Auto manufacturing

Governance
StrategyGraph 4a.1 – Auto manufacturing

Graph 4a.2 – Automotive Powertrain Financing Mix

Emissions Intensity (gCO2-e/vkm)

160

ANZ vs. pathway
-5%

140

100
90
80

120

10%

15%

9%

56%

10%

81%

Sector exposures

60

80

Metrics and Targets
Sectoral metrics and targets

75%

70

100

Risk Management

Our approach to sectoral pathways

50

Pathways performance dashboard

60

40

40

30

20

20

Manufacturing sector

10

Buildings sector

Actual Performance
Against our Target

2030 Target
Pathway (-28%)

IEA Net Zero Emissions
2050 Pathway (2021)

2050

2049

2048

2047

2046

2045

2044

2043

2042

2041

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

0

EU emissions standard

6%
38%

0
ANZ Portfolio 2023
Internal Combustion Engine (ICE)ANZ (2025 target)
Hybrid Drive

IEA NZE 2030
Electric Vehicle (EV)/Hydrogen Fuel Cell

Energy sector
Transport sector

Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix

Auto manufacturing Metrics Summary

Assurance opinion

Metric2022

2023

Emissions Intensity gCO₂-e/vkm

137

128

Absolute Emissions Mt CO₂-e

2.36

2.12

Portfolio-wide Intensity kgCO₂-e/$ lent

0.94

1.11

Data Quality Score

1.96

1.93

Powertrain mix – hybrid and electric

N/A

19%

Current EAD $bn (% of Group EAD)

1.91 (0.16%)

58

ANZ 2023 Climate-related Financial Disclosures

AUTO MANUFACTURING (CONTINUED)

The key design choices we used in calculating our emissions intensity reduction target for our auto
manufacturing financing activities are summarised in Table 4a below.
Table 4a – Key design choices in calculating auto manufacturing production financed emissions
reduction target
2030 target• 28% reduction in emissions intensity from 2022 baseline

2025 target• Target portfolio to reflect 25% production of hybrid (including plugin hybrid) and battery electric vehicles (or hydrogen fuel cell)

ANZ customers
included• Companies that own or operate one or more auto manufacturing facility(excludes vehicles other than cars, such as trucks, buses and motorbikes)
and that we have at least $10m exposure at default (EAD) at the end of
our financial reporting year (September 30)

Emissions included

Metrics• Scope 3 – tailpipe emissions of cars manufactured by ANZ customers
included in the target during the year of assessment (excludes vehicles
other than cars, such as trucks, buses and motorbikes)
1. Emissions intensity of newly manufactured cars (gCO₂-e/vkm)
2. The powertrain mix indicator showing the percentage per technology(internal combustion engines, hybrid (including plug in hybrid) andbattery electric vehicles (or hydrogen fuel cell)) of our financed
automotive portfolio

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)

Attribution approach• Portfolio-weighted approach (measures ANZ’s financing to customers as
a proportion of ANZ’s total financing to the auto manufacturing sector)

Benchmarking Scenario• IEA’s NZE 2050 Scenario

Key External
Data Sources• Customer disclosures• Transition Pathway Initiative

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.

Performance against target

Actions to achieve 2030 target

Overview

This is the first year ANZ has reported on
the emissions intensity of our financed auto
manufacturing scope 3 emissions as describedabove. Our 2022 portfolio baseline of 137g CO₂-e/
vkm is marginally below the IEA NZE 2050 baselineof 140g CO₂-e/vkm.

The automotive sector is one of the largest
contributors to global2 emissions with approximately
8% associated with light duty vehicles (passengercars) and will play a critical role in the path tonet zero emissions. We recognise there will besignificant and growing opportunities to support
our customers in their efforts to reduce the Scope 3
emissions of newly produced vehicles.

Governance

ANZ engages with auto manufacturing customers
who are part of our Large Emitters Engagement
Program, to support and encourage this cohort
to strengthen their low carbon transition plans.

Sector exposures

Graph 4a.1 shows the emissions intensity of ourauto manufacturing portfolio which has reduced
by 7% to 128g CO₂-e/vkm from our 2022 baseline.
We expect this decline to continue, given the shift
towards zero emissions vehicles. Several of ourcustomers have either set production targets tophase out internal combustion engines and/or
net-zero commitments for cars they produce.
We are supporting customers in the auto
manufacturing industry move toward zero emission
vehicle production and our 2030 target of 99g
CO₂-e/vkm.

The achievement of our 2030 intermediate targets
for the auto manufacturing sector will requirecontinuing improvements in the carbon intensityof newly produced vehicles. In particular ongoinginvestment in the production of zero emissions
vehicles is needed.

However, currently supply chain risks remain in theindustry, especially related to the supply of batteries
for electric vehicles.1 In this context, customer
discussions to date have been positive, indicatingthat significant investment in research anddevelopment is underway to address supply chain
issues including battery manufacturing and supply.
The hybrid and electric portion of the powertrain
mix within ANZ’s target portfolio was 19% in 2023,
which is on-track to meet the 2025 target of 25%.
Our absolute emissions have decreased year-on-year,
in-line with the industry trend towards producing
more hybrid and/or zero emissions cars.

1. Electric cars fend off supply challenges to more than double global sales – Analysis – IEA. 2. International Energy Agency (2021), Net-Zero by 2050,
IEA, Paris.

Strategy
Risk Management

Metrics and Targets
Sectoral metrics and targets
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

59

ANZ 2023 Climate-related Financial Disclosures

Aviation

Graph 4b: Aviation

Emissions Intensity (gCO2-e/RPK)

1,200

ANZ vs. pathway
-9%

1,000
800
600

The key design choices we used in calculating our emissions intensity reduction target
for our aviation financing activities are summarised in Table 4b below.

Overview

Table 4b – Key design choices in calculating the aviation sector emissions intensity
reduction target

Strategy2030 target• 20% reduction in emissions intensity from 2019 baseline

ANZ Customers
Included• Commercial airlines that own and/or operate passenger
and cargo aircraft on domestic and/or international routes and that
we have at least $10m exposure at default (EAD) at the end of our
financial reporting year (September 30)

400
200

Actual Performance
Against our Target

2030 Target Pathway(-20%)1

2050

2049

2048

2047

2046

2045

2044

2043

2042

2041

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2028

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

0

Aviation Metrics Summary
Metric2019

2023

Emissions Intensity gCO₂-e/RTK

902

828

Absolute Emissions Mt CO₂-e

2.35

1.18

Portfolio-wide Intensity kgCO₂-e/$ lent

0.91

0.58

Data Quality Score

1.07

1.09

Current EAD $bn (% of Group EAD)

2.04 (0.18%)

1. We have restated this target due to an error. We previously stated that our 2030 emissions intensity target for aviation required a 30% reduction
from our 2019 baseline whereas, in fact, it only requires a 20% reduction from our 2019 baseline. The target remains unchanged.

Risk Management

1

Emissions Included• Scope 1 & 3 – jet fuelMetric• Emissions per revenue tonne-kilometre of air travel (gCO₂-e/RTK)

Financing Activities
Included• Exposure at default. This represents the Group's exposure to eachsector based on APRA’s calculation formula which includes totalcommitted loans (drawn plus a proportion of off-balance sheet
exposures as specified by APRA)IEA Net Zero Emissions
2050 Pathway (2021)

GovernanceAttribution Approach• Portfolio-weighted approach (measures ANZ’s financing to customers
as a proportion of ANZ’s total financing to the aviation sector)

Benchmarking Scenario• Science-Based Targets initiative (SBTi) 1.5°C scenario

Key External Data
Sources• Customer reports• Transition Pathway Initiative

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.

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

60

ANZ 2023 Climate-related Financial Disclosures

AVIATION (CONTINUED)

Performance against target
This is the first year ANZ has reported on theemissions intensity of our aviation financing
activities. Our 2019 portfolio baseline of 902g
gCO₂-e/RTK is below the SBTi baseline of 1,023g
gCO₂-e/RTK.
Graph 4b shows the emissions intensity of ouraviation portfolio in 2023 has reduced by 8% to828 gCO₂-e/RTK from our 2019 baseline.
We are seeking to support the aviation industry
move toward net-zero emissions and our 2030 targetof 720 gCO₂-e/RTK is in-line with the SBTi trajectory.

Actions to achieve 2030 target
In 2022 aviation accounted for 2% of global
energy-related CO₂ emissions, having grown fasterin recent decades than rail, road or shipping.1 Asinternational travel demand recovers following theCovid-19 pandemic, aviation emissions rose in 2022
to reach nearly 80% of their pre-pandemic peakin 2019.
Aviation is one of the hard-to-abate sectors that stillrequires concerted efforts to develop commercially
viable alternative technologies and solutions thatcan be deployed at scale. To achieve Net Zero, it
is estimated that the industry will have to reduce
fuel-burn emissions from aircraft to zero, eliminating
21.2 Gt of CO₂ emissions between 2020 and 2050.2
The International Air Transport Association (IATA) Net
Zero strategy estimates that 65% of the reduction
will have to come from the adoption of sustainableaviation fuel (SAF), 13% from new aircraft

1. Aviation – IEA. 2. IATA – Fly Net Zero.

technologies such as alternative propulsion,
including electric and hydrogen, 3% from continued
improvement of operational efficiency and finally
19% from carbon capture or offsets.

Overview

ANZ engages with aviation customers on their low
carbon transition plans, with the aim of realising
incremental emission reductions in the sector.
We are supporting and encouraging customers
in this cohort to strengthen their low carbon
transition plans.

Risk Management

We will continue to support aviation customers
above this benchmark– in fact, lending to support
customers’ transition plans may mean the emissions
intensity of our portfolio goes up for a period as
we may increase exposure to these customers.
For example, to support our customers to invest
in new technologies or research and development
into low/zero carbon technologies. However, as ourcustomers move towards lower emissions assets,
we anticipate the emissions intensity of our portfolio
declining towards our 2030 target. The achievementof our 2030 intermediate targets for the aviation
sector will require continuing improvements inthe carbon intensity of airlines.

Our approach to sectoral pathways

If the uptake of sustainable aviation fuel andadoption of new aircraft technologies do not occur
quickly enough, we recognise that achieving ourtargets may become unlikely. However, were thisto occur, we anticipate that aviation scenarios
would be adjusted to reflect a longer time horizon
and we may update our pathway accordingly.

Governance
Strategy

Metrics and Targets
Sectoral metrics and targets
Sector exposures
Pathways performance dashboard
Energy sector
Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

61

ANZ 2023 Climate-related Financial Disclosures

Shipping

Graph 4c: Shipping

Absolute Emissions (Mt CO2-e)

0.60

ANZ vs. pathway
-12%

0.50
0.40
0.30

The key design choices we used in calculating our absolute emissions reduction target
for our shipping financing activities are summarised in Table 4c below.

Overview

Table 4c – Key design choices in calculating the shipping sector absolute emissions
reduction target

Strategy2030 target• 10% reduction in absolute financed emissions from 2022 baseline

ANZ Customers
Included• Companies whose primary activity includes owning and operating
domestic and/or international ocean-going vessels and that we haveat least $10m exposure at default (EAD) at the end of our financial
reporting year (September 30)

0.20
0.10

Actual Performance
Against our Target

2030 Target Pathway (-10%)

2049

2050

2048

2047

2045

2046

2044

2043

2042

2041

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

0

Emissions Included• Scope 1 & 3 emissions (fuel production, distribution and combustion)

Metric• Absolute emissions of shipping (Mt CO₂-e)

Financing Activities
Included• Exposure at default. This represents the Group's exposure to eachsector based on APRA’s calculation formula which includes totalcommitted loans (drawn plus a proportion of off-balance sheet
exposures as specified by APRA)IEA Net Zero Emissions 2050 Pathway (2021)

Attribution Approach
Shipping Metrics Summary
Metric2022

2023

Absolute Emissions Mt CO₂-e

0.48

0.42

Portfolio-wide Intensity kg CO₂-e/$ lent

0.33

0.29

Data Quality Score

1.01

1.02

Current EAD $bn (% of Group EAD)

• 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 (NZE 2050) (May 2021)

Key External Data
Sources• Customer disclosures

1.24 (0.11%)

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.

GovernanceRisk 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

62

ANZ 2023 Climate-related Financial Disclosures

SHIPPING (CONTINUED)

Performance against target
This is the first year ANZ has reported on theabsolute emissions of our shipping financing
activities. Our 2022 portfolio baseline of 0.481 Mt
CO₂-e has been baselined against the IEA NZE
2050 trajectory.
Graph 4c shows that the absolute emissions of ourshipping portfolio has reduced to 0.416 Mt CO₂-efrom our 2022 baseline, which is below the IEA NZE
2050 trajectory of 0.475 Mt CO₂-e.

Actions to achieve 2030 target
Currently a small number of customers from theshipping sector make up a material part of theoverall emissions of ANZ’s shipping pathway. We
have begun, and will continue, to engage withcustomers to understand their transition plans,emissions reduction targets and how we can assist
these customers transition towards lower emissions.
The achievement of our 2030 intermediate targets
for the shipping sector will require continuing
improvements in the absolute emissions of ourcustomers’ shipping operations. However, as ourcustomers work towards optimising operational
efficiency, retrofitting existing assets, and switching
to low-carbon fuels, we expect to see the emissions
intensity of our portfolio decline consistent with our2030 target.

Opportunities for emissions reduction
and challenges
The shipping sector serves as a critical link in many
global supply chains and as the foundation ofintercontinental trade. In its 2022 Review of Maritime
Transport, United Nations Conference on Trade andDevelopment noted that more than 80% of global
trade by volume is carried by sea.1
However, shipping is responsible for around 2.5% of
total energy sector emissions as per the International
Energy Agency’s Net Zero Emissions (NZE 2050)
pathway2. According to the NZE 2050 pathway, theshipping industry is one of the few transport modes
that does not achieve net-zero emissions by 2050.
This is due to the long lifetime of vessels (typically
25-35 years) and lack of available low-carbon optionscommercially available today. Nevertheless, to alignto the NZE 20250 pathway emissions are expected
to decline each year in the shipping sector.2
In the short term, it appears that there isconsiderable potential for curbing fuel consumption
in the shipping industry through measures tooptimise operational efficiency and improve energy
efficiency. Such approaches include slow steaming
and the use of wind-assistance technologies2.

1. Review of Maritime Transport 2022 | UNCTAD. 2. Net Zero by 2050 – A Roadmap for the Global Energy Sector.

In the medium to long term, significant emissions
reductions are expected to be achieved in the NZE2050 scenario by switching to low-carbon fuels suchas biofuels, hydrogen, and ammonia2.

Overview

If the uptake of fuel switching or adoption of othermeasures to optimise operational efficiency do notoccur quickly enough, we recognise that achieving
our targets may become unlikely. However, were thisto occur, we anticipate that shipping scenarios
would be adjusted to reflect a longer time horizon
and we may update our pathway accordingly.

Risk Management

Governance
Strategy

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

63

ANZ 2023 Climate-related Financial Disclosures

MANUFACTURING
The key design choices we used in calculating our emissions intensity reduction target
for our aluminium production financing activities are summarised in Table 5 below.

Overview

Aluminium

StrategyGraph 5.1: Aluminium

Table 5 – Key design choices in calculating 2030 aluminium production financed
emissions target
ANZ vs. pathway+13%

GHG Intensity (tCO2-e/t Aluminium)

12.0
10.0

GovernanceRisk Management

2030 Target• 30% reduction in emissions intensity from 2021 baseline

ANZ Customers
Included• Companies that own or operate one or more alumina refineries
or aluminium smelters6

Metrics and Targets• Customers above are included where ANZ’s exposure is atleast $1 million

Sector exposures

8.0

Sectoral metrics and targets
Our approach to sectoral pathways

6.0

Emissions Included• Scope 1 & 2 emissions

Pathways performance dashboard

4.0

Metric• Emissions intensity of aluminium production (tCO₂-e/t aluminium)

Energy sector

2.0

Financing Activities
Included• Exposure at default. This represents the Group's exposure to eachsector based on APRA’s calculation formula which includes totalcommitted loans (drawn plus a proportion of off-balance sheet
exposures as specified by APRA)

Actual Performance
Against our Target

2030 Target Pathway (-30%)

International Aluminium
Institute 1.5°C Pathway

2050

2049

2048

2047

2046

2045

2044

2043

2042

2041

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

0

Global Average International
Aluminium Institute 1.5°C Pathway

Aluminium Metrics Summary
Metric

2021

2022

2023

Emissions Intensity tCO₂-e/t aluminium

8.30

7.64

8.73

Absolute Financed Emissions MtCO₂-e

0.741

0.642

0.53

Portfolio-wide Intensity kgCO₂-e/$ lent

1.153

0.934

0.77

Data Quality Score5

2.78

2.90

2.50

Current EAD $bn (% of Group EAD)

0.68 (0.06%)

7

Attribution Approach• Portfolio-weighted approach (measures ANZ’s financing to customers
relative to ANZ’s total financing to the aluminium sector)

Benchmarking Scenario• International Aluminium Institute (IAI) 1.5ºC scenario8

Key External Data
Sources• Customer disclosures• Transition Pathways Initiative• Wood Mackenzie• International Aluminium Institute

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.
1. This is a restatement of the 2021 Absolute Financed Emissions we reported in 2022 of 0.62 MtCO₂-e. 2. This is a restatement of the2022 Absolute Financed Emissions we reported in 2022 of 0.74 MtCO₂-e. 3. This is a restatement of the 2021 Portfolio-wide Intensity wereported in 2022 of 0.95 kgCO₂-e/$ lent. 4. This is a restatement of the 2022 Portfolio-wide Intensity we reported in 2022 of 1.07 kgCO₂-e/$lent. 5. The data quality score was calculated in accordance with guidance made available by the Partnership for Carbon Accounting
Financials (PCAF) in The Global GHG Accounting and Reporting Standard for the Financial Industry, December 2022. 6. Includes bothprimary and secondary production processes. Exposure to entities involved in the trade of raw inputs such as bauxite are not included in
the scope of these metrics or targets. For our diversified customers, we look at what percentage of their revenue is derived from the saleof aluminium and then apportion our EAD to these activities using the same percentage. 7. Where customers purchase semi-finishedproducts such as alumina, this is not included within our emissions intensity target as they are not included in the customers Scope 1 or
2 emissions. We will consider how to deal with Scope 3 emissions in future years. 8. In September 2023, the IEA released a 2023 update ofits Net Zero Roadmap, in which it published a scenario for the aluminium sector for the first time. In time, we will review this scenario andassess its ambition in comparison with our existing benchmarking scenario.

Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

64

ANZ 2023 Climate-related Financial Disclosures

ALUMINIUM (CONTINUED)

Performance against target

low emissions intensity, coupled with an increased
exposure to a customer with a relatively highemissions intensity. Customers’ climate performancedid not significantly improve year-on-year.

Graph 5.2 – Aluminium portfolio emissions intensity movements

GHG Intensity (tCO2-e/t Aluminium)

10.00
9.00

8.30

8.00

1.16
7.64

8.73
(0.07)

7.00

5.79

6.00
5.00
4.00

Actions to achieve 2030 target

3.00
2.00
1.00
0
ANZ 2021

Increase

Our aluminium absolute financed emissions andportfolio wide emissions intensity have decreased
year on year due to reduced alumina and aluminium
production and changes in the portion of customers
emissions attributed to us based on customers’
enterprise value or FX movements.

Decrease

ANZ 2022

Portfolio
Change1

Customers'
ClimatePerformance

ANZ 2023

ANZ 2030
targetTotal

1. Includes changes in exposure as well as APRA's new regulatory capital framework for Australian banks effective from 1 January 2023. This
resulted in changes in the credit risk capital that ANZ is required to set aside in respect of different products and as a result, impacts the way
Exposure at Default is calculated.

Our 2021 portfolio baseline of 8.30 tCO₂-e/t
aluminium is below the 2021 global averageof 10.29 tCO₂-e/t aluminium.1

emissions intensity of our aluminium production
portfolio increased by 5% from our 2021 baseline
to 8.73 tCO₂-e/t aluminium.

Our aluminium producing customers made strong,
early progress to reduce the emissions intensity of
production (Graph 5.1). However, in 2023 theGraph 5.2 highlights the drivers of this emissions
intensity increase. The portfolio changed, with adecrease in exposure to a customer with a relatively

A small number of customers (less than 10) makeup a material portion of our exposure to this sector.
As our emissions intensity target is based on a
portfolio-weighted metric, we intend to prioritise
financing projects and customers producing
aluminium at an average intensity below our2021 baseline portfolio average of 8.30 tCO₂-e/t
aluminium to achieve our target, noting this'average' will reduce over time.
We have begun, and will continue, to engage withcustomers to understand their transition plans,emissions reduction targets and how we can assist
these customers transition towards lower emissions
aluminium production.

Opportunities for emissions reduction
and challenges
Aluminium is strong, light weight and recyclable,
and accounts for approximately 2% of total
global emissions.2

Our choice of an emissions intensity target
recognises that aluminium will be a key material
used in technologies essential for the transition to
net zero emissions. Industry scenarios aligned with
the Paris goals predict global demand for primaryaluminium is expected to increase by up to 40% andsecondary (recycled) production of aluminium willmore than triple by 2050.1
Primary aluminium production is highly electricity
intensive. Efforts to decarbonise the sector will beheavily reliant on decarbonisation of the electricity
supply and several of our customers have either set,or have stated that they are committed to setting,targets or net zero commitments.
Secondary production of aluminium via electricarc furnace has a significantly lower emissions
intensity than primary production, but is limitedby scrap availability.
Limiting the use of aluminium in final products
is a key step to reduce emissions from the sector
for example though:• ‘light weighting’ (design upgrades to manufacturecomponents with the same performance standard
using less material); and• efficiency in design.
Investment in the commercialisation of currently
expensive technologies such as carbon-free
anodes,3 is important to eliminate the harder
to abate emissions of the sector.

1. International Aluminium Institute – Aluminium Sector Greenhouse Gas Pathways to 2050, September 2021. 2. Mission Possible Partnership – Making Net-Zero Aluminium Possible, April 2022. 3. Elysis is a technology that replaces traditional carbon anodes (large carbon blocks which conduct
electricity during aluminium smelting, producing significant greenhouse. gas emissions) with carbon free anodes that produce only oxygen.

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

65

ANZ 2023 Climate-related Financial Disclosures

CementGraph 6.1: Cement

GHG Intensity (tCO2-e/t Cement)

0.70

ANZ vs. pathway-2.8% tThe key design choices we used in calculating our emissions intensity reduction target
for our cement production financing activities are summarised in Table 6 below.

Overview

Table 6 – Key design choices in calculating 2030 cement financed emissions target

Strategy

Governance

0.602030 Target• 20% reduction in emissions intensity from 2021 baseline

Risk Management

0.50

ANZ Customers
Included• Companies that own or operate one or more cement plantsthat manufacture cement from raw inputs6

Metrics and Targets

0.40• Customers above are included where ANZ’s exposure is atleast $1 million

Sectoral metrics and targets

Emissions Included• Scope 1 & 2 emissions

Our approach to sectoral pathways

Metric• Emissions intensity of cement production (tCO₂-e/t cement)

Financing Activities
Included• Exposure at default. This represents the Group's exposure to eachsector based on APRA’s calculation formula which includes totalcommitted loans (drawn plus a proportion of off-balance sheet
exposures as specified by APRA)

0.30
0.20
0.10

Actual Performance
Against our Target

2030 Target Pathway (-20%)

IEA Net Zero Emissions
2050 Pathway (2021)

2050

2049

2048

2047

2046

2045

2044

2043

2042

2041

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

0

Global Average IEA
Tracking Report 22

Cement Metrics Summary
Metric

2021

2022

2023

Emissions Intensity tCO₂-e/t cement

0.61

0.58

0.57

Absolute Financed Emissions MtCO₂-e

2.16

1

2

1.65

1.19

Portfolio-wide Intensity kgCO₂-e/$ lent

5.223

4.984

3.84

Data Quality Score

1.87

1.76

1.98

5

Current EAD $bn (% of Group EAD)

7

Attribution Approach• Portfolio-weighted approach (measures ANZ’s financing to customers
relative to ANZ’s total financing to the cement sector)

Benchmarking Scenario• International Energy Agency (IEA) Net Zero Emissions by 2050
Scenario (2021)

Key External Data
Sources• Customer disclosures• Asset Resolution• International Energy Agency

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.

0.31 (0.03%)
1. This is a restatement of the 2021 Absolute Financed Emissions we reported in 2022 of 2.24 MtCO₂-e. 2. This is a restatement of the2022 Absolute Financed Emissions we reported in 2022 of 1.64 MtCO₂-e. 3. This is a restatement of the 2021 Portfolio-wide Intensity wereported in 2022 of 5.37 kgCO₂-e/$ lent. 4. This is a restatement of the 2022 Portfolio-wide Intensity we reported in 2022 of 4.85 kgCO₂-e/$lent. 5. The data quality score was calculated in accordance with guidance made available by the Partnership for Carbon Accounting
Financials (PCAF) in The Global GHG Accounting and Reporting Standard for the Financial Industry, December 2022. 6. For our
diversified customers, we look at what percentage of their revenue is derived from the sale of cement and then apportion our EAD to these
activities using the same percentage. 7. Where customers purchase semi-finished products such as clinker, this is not included within ouremissions intensity target as they are not included in the customers Scope 1 or 2 emissions.

Sector exposures
Pathways performance dashboard
Energy sector
Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

66

ANZ 2023 Climate-related Financial Disclosures

CEMENT (CONTINUED)

Performance against target

Actions to achieve 2030 target

Graph 6.2 – Cement portfolio emissions intensity movements
0.70
GHG Intensity (tCO2-e/t Cement)

0.61
0.60

0.58

0.01

0.57
0.49

(0.02)

0.50
0.40

We have begun, and will continue, to engage
with customers to understand their transition
plans, emissions reduction targets and how we
can assist in supporting these customers toward
lower emissions cement production.

0.30
0.20
0.10
0
ANZ 2021

Increase

A small number of customers (less than 10) makeup a material portion of our exposure to this sector.
As our emissions intensity target is based on a
portfolio-weighted metric, we intend to prioritise
financing projects and customers producing cement
at an average intensity below our 2021 baseline
portfolio average of 0.61 tCO₂-e/t cement, noting
this ‘average’ will reduce over time.

Decrease

ANZ 2022

Portfolio
Change1

Customers'
ClimatePerformance

ANZ 2023

ANZ 2030
targetTotal

1. Includes changes in exposure as well as APRA's new regulatory capital framework for Australian banks effective from 1 January 2023. This
resulted in changes in the credit risk capital that ANZ is required to set aside in respect of different products and as a result, impacts the way
Exposure at Default is calculated.

Our 2021 portfolio baseline of 0.61 tCO₂-e/t
cement was marginally above the 2021 global
average of 0.59 tCO₂-e/t cement.1
Graph 6.1 shows the emissions intensity of ourcement production portfolio has reduced by 7% to0.57 tCO₂-e/t cement from our 2021 baseline. The
limited availability of cost-effective technologies
to reduce the hard-to-abate process emissions of
cement production makes the pathway towards ourtarget less clear in comparison with other sectors.
However, customer discussions to date have been
positive and indicated that significant investment
in research and development is underway.
Graph 6.2 highlights the reduction in emissions
intensity was mainly driven by portfolio change.
Our absolute financed emissions and Portfolio-wide
Intensity have decreased year-on-year, in line witha reduction in exposure to the sector.

1. International Energy Agency – NZE 2050 Tracking Report, July 2023. 2. Global Cement and Concrete Association – Key Facts. 3. International
Energy Agency – Net Zero Roadmap, 2023. 4. Decarbonisation Pathways for the Australian Cement and Concrete Sector, 2022. 5. Global Cement
and Concrete Association. 6. Fly ash is a waste product from coal-fired power generation that is used as a supplementary cementitious material.
7. International Energy Agency – Net Zero Roadmap – 2023 Update, 2023. 8. McKinsey & Company – The Net Zero Transition Report, January
2022. 9. WBCSD – The Cement CO2 and Energy Protocol, May 2011.

Opportunities for emissions reduction
and challenges
The global cement industry accounts for between
5% and 8% of total global emissions.2
The overall global demand profile for cement underthe 2023 update of the IEA’s NZE 2050 scenario
remains relatively flat;3 however, the demand profile
differs between developed and developing countries.
While the cement sector faces pressure to reduce
emissions, this poses a challenge. The key raw material
for cement is limestone, which releases carbon

Cementitious productIn line with the 2022 SBTi Cement Guidance
and our understanding of industry practices,
when we refer to our intensity target in
tCO₂-e/t cement, we have set an intensity
target per tonne of ‘cementitious product’rather than per tonne of ‘cement’.

dioxide as it is heated to produce clinker. These
production emissions account for approximately
55% of the emissions from cement production.4

Overview

Opportunities for emissions reduction5 in this
sector include:

Strategy

GovernanceRisk Management• substituting clinker for supplementary
cementitious materials (e.g. fly ash, granulatedslag, limestone, and calcined clay);6Metrics and Targets• alternate fuels for kilns (e.g. biomass insteadof fossil fuels);

Sector exposures

Sectoral metrics and targets• decarbonisation of electricity; andOur approach to sectoral pathways• plant and end-user efficiencies.

Pathways performance dashboard

The cement industry will rely on carbon capture andutilisation/storage (CCUS) technologies becomingcommercially and technically viable to capture theremaining ‘hard-to-abate’ emissions from thechemical reaction of heating limestone to achieve
net zero by 2050 for the industry.7
It is estimated that capital spending will need toalmost double for the sector to reach net-zeroemissions by 2050.8 Cement kilns have long average
lifetimes (around 40 years). ANZ continues to engage
with customers on how we may be able to support
their decarbonisation.

This delineation is important as clinker
substitutes – such as gypsum, limestone
and cement kiln dust – are an important
way to help decarbonise the cement sector.
‘Cementitious product’ consists of all clinker
produced by our customers for sale, plus allclinker substitutes consumed for blending,plus all cement substitutes.9

Energy sector
Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

67

ANZ 2023 Climate-related Financial Disclosures

Steel

Graph 7.1: SteelGHG Intensity (tCO2-e/t Steel)

2.5

ANZ vs. pathway
+8.5%

2.0

1.5

1.0

0.5

The key design choices we used in calculating our emissions intensity reduction target
for our steel production financing activities are summarised in Table 7 below.

Overview

Table 7 – Key design choices in calculating 2030 steel production financed emissions target

Strategy2030 Target• 28% reduction in emissions intensity from 2021 baseline

ANZ Customers
Included• Companies that own and operate one or more steel production mill9

IEA Net Zero Emissions
2050 Pathway (2021)• Scope 1 & 2 emissions

Metric• Emissions intensity of steel production (tCO₂-e/t steel)11

Financing Activities
Included• Exposure at default. This represents the Group's exposure to eachsector based on APRA’s calculation formula which includes totalcommitted loans (drawn plus a proportion of off-balance sheet
exposures as specified by APRA)

2050

2049

2048

2047

2046

2045

2044

2043

2042

2041

2040

2039

2038

2037

2036

2035

2034

2033

2032

2031

2030

2029

2028

2027

2025

2024

2023

2022

2021

2020

2026

2030 Target Pathway (-28%)

World Steel 2020 Average
Emissions Intensity

Steel Metrics Summary
Metric

2021

2022

2023

Emissions Intensity tCO₂-e/t steel

1.90

1.971

1.93

Absolute Financed Emissions MtCO₂-e

1.382

1.473

1.34

Portfolio-wide Intensity kgCO₂-e/$ lent

4

1.27

5

1.50

1.10

Data Quality Score6

1.397

1.378

1.20

Current EAD $bn (% of Group EAD)

1.22 (0.10%)

Risk Management

Metrics and Targets
Sectoral metrics and targets
Sector exposures

Emissions Included

0

Actual Performance
Against our Target• Customers above are included where ANZ’s exposure is atleast $1 million

Governance10

Our approach to sectoral pathways
Pathways performance dashboard
Energy sector
Transport sector
Manufacturing sector
Buildings sector

Attribution Approach• Portfolio-weighted approach (measures ANZ’s financing tocustomers relative to ANZ’s total financing to the steel sector)

Benchmarking Scenario• International Energy Agency (IEA) Net Zero Emissions by 2050
Scenario (2021)

Total lending portfolio

Key External Data
Sources• Customer disclosures• Woodmac

Appendix• Asset Resolution• International Energy Agency

Assurance opinion

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.
1. This is a restatement of the 2022 Emissions Intensity we reported in 2022 of 1.95 tCO₂-e/t steel. 2. This is a restatement of the 2021
Absolute Financed Emissions we reported in 2022 of 1.36 MtCO₂-e. 3. This is a restatement of the 2022 Absolute Financed Emissions wereported in 2022 of 1.43 MtCO₂-e. 4. This is a restatement of the 2021 Portfolio-wide Intensity we reported in 2022 of 1.32 kgCO₂-e/$ lent.
5. This is a restatement of the 2022 Portfolio-wide Intensity we reported in 2022 of 1.47 kgCO₂-e/$ lent. 6. The data quality score wascalculated in accordance with guidance made available by the Partnership for Carbon Accounting Financials (PCAF) in The Global GHG
Accounting and Reporting Standard for the Financial Industry, December 2022. 7. This is a restatement of the 2021 Data Quality Score
we reported in 2022 of 1.44. 8. This is a restatement of the 2022 Data Quality Score we reported in 2022 of 1.42. 9. Includes both primaryand secondary production processes. Exposure to entities involved in the trade of raw inputs such as metallurgical coal and iron ore are
not included in the scope of these metrics or targets. For our diversified customers, we look at what percentage of their revenue is derived
from the sale of steel and then apportion our EAD to these activities using the same percentage. 10. Where customers purchase semifinished products such as crude iron, this is not included within our emissions intensity target as they are not included in the customers
Scope 1 or 2 emissions. We will consider how to deal with Scope 3 emissions in future years. 11. Given the availability of crude steel data
within customer public disclosures, we refer to crude steel within our emissions intensity metric. This differs from the SBTi Steel ScienceBased Target Setting Guidance (July 2023), which specifies ‘hot-rolled steel’ as the denominator.

Large Institutional
Agribusiness Customers

68

ANZ 2023 Climate-related Financial Disclosures

STEEL (CONTINUED)

Performance against target

Actions to achieve 2030 target

Graph 7.2 – Steel portfolio emissions intensity movements

GHG Intensity (tCO2-e/t Steel)

2.50

2.00

1.90

0.04

1.97

1.93
(0.08)
1.36

1.50

With the September 2023 release of the Sustainable
Steel Principles,2 we are working to better
understand our customers’ percentage of scrap
steel used in production and their existing steel
production technology mix.

1.00

0.50

0
ANZ 2021

Increase

A small number of customers (less than 10) make up
the material portion of our exposure to this sector.
As our emissions intensity target is based on a
portfolio-weighted metric, we intend to prioritise
financing projects and customers producing steel
at an average intensity below our 2021 baseline
portfolio average of 1.90 tCO₂-e/tonne steel,noting this 'average' will reduce over time.

Decrease

ANZ 2022

Portfolio
Change1

Customers'
ClimatePerformance

ANZ 2023

ANZ 2030
targetWe have begun, and will continue, to engage withcustomers to understand their transition plans,emissions reduction targets and how we can assistin supporting these customers transition towards
lower emissions steel production.

Total

1. Includes changes in exposure as well as APRA's new regulatory capital framework for Australian banks effective from 1 January 2023. This
resulted in changes in the credit risk capital that ANZ is required to set aside in respect of different products and as a result, impacts the way
Exposure at Default is calculated.

Our 2021 portfolio baseline of 1.90 tCO₂-e/t steel
closely reflects the 2020 global average of 1.89
tCO₂-e/t steel.1

be slow moving. We are seeing efficiency measures
being taken and investment into research anddevelopment in the steel sector.

The emissions intensity of our steel production
portfolio has increased by 1.6% from our 2021
baseline to 1.93 tCO₂-e/tonne steel (Graph 7.1).
Given the significant technological advances
required to enable commercialisation of low
emissions steel making, the emissions intensity
reduction pathway of the steel sector will likely

The reduction in emissions intensity was mainly
driven by improved customers’ climate performance(Graph 7.2). Exposure to the sector has increasedslightly year-on-year, however due to improved
customers’ climate performance, we saw a reductionin our absolute financed emissions and portfoliowide intensity.

Opportunities for emission reductions
and challenges
The global steel industry accounts for approximately
6%-9% of total global emissions, with demand set
to grow by up to 40% from current levels by 2050.3
Steel is primarily made through one of two methods:• Traditional blast furnace – basic oxygen
furnace (BF-BOF): the blast furnace converts
iron ore to iron using coke (made frommetallurgical coal) heated to high temperatures.
Other impurities in the ore also melt, forming
slag, which is separated out. The molten ironis then transferred to a basic oxygen furnace
where high temperature air is added to remove
the remaining impurities (mainly carbon andsilica), and steel is produced.
• Electric arc furnaces (EAF): are charged withscrap steel directly and can be powered byrenewable energy, however there is currently
not enough scrap steel available to convert
steelmaking to EAF technology and satisfy
global steel demand.4• Secondary production of steel, via electric arc
furnace, has a significantly lower emissions
intensity, but is limited by scrap availability
and challenges associated with producing
high-quality steel from scrap.

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

Opportunities for emission reductions arewell defined:

Manufacturing sector• moderation of steel demand via end user
efficiency; andLarge Institutional
Agribusiness Customers• retrofitting BF-BOFs.

Total lending portfolio

However the majority of the technologies facilitating
further reductions, while available, are not yet
commercially viable. Viability of technologies suchas carbon capture utilisation/storage (CCUS) andnear-zero-emissions direct reduction of iron-ore
using natural gas, green hydrogen and bioenergy,
are likely key to eliminating the ‘hard-to-abate’
emissions of the sector.
For example, direct reduced iron is an alternate toblast furnace iron production, in which hydrogenuse is being explored as key technology in low orno emissions steel making.5

1. World Steel Association – Climate Change and the Production of Iron and Steel, 2021. 2. Sustainable Steel Principles. 3. International Energy Agency – Iron and Steel Technology Roadmap, 2020. 4. About steel – worldsteel.org. 5. World Steel Association – Hydrogen (H2)-Based Ironmaking
Fact Sheet, June 2022.

Buildings sector

Appendix
Assurance opinion

69

ANZ 2023 Climate-related Financial Disclosures

BUILDINGS
Overview

Large-scale commercial real estate

Governance

Table 8a – Key design choices in calculating 2030 large-scale real estate financed emissions
targetGraph 8a.1 – Large-scale commercial real estate – office buildings
GHG Intensity (kg CO2-e/m2 NLA)

90.0

ANZ vs. pathway
25.6%

80.0
70.0
60.0

2030 Target• 60% reduction in emissions intensity from 2019 baseline –office buildings and shopping centres

ANZ Customers
Included• Office buildings and shopping centres fully or partially owned bylarge Real Estate Investment Trusts (REIT) or property fund customers
in our Australian Institutional loan book

Emissions Included• Scope 1 and 2 emissions (from building operational energy use)

50.0
40.0
30.0

• Scope 3 emissions (Category 3 – Fuel and energy related emissions)

20.0

2025

Actual Performance Against
our Target up to end 2022

2030

2035

2030 Target Pathway (-60%)

2040

2045

2050

IEA Beyond 2°C Scenario(B2DS) Alignment Pathway

Graph 8a.2 – Large-scale commercial real estate – shopping centres

GHG Intensity (kg CO2-e/m2 NLA)

100.0

70.0
50.0

Benchmarking Scenario• International Energy Agency (IEA) Beyond 2°C (B2D) scenario
for service buildings presented in the 2017 Energy Technology
Perspectives report2• National Australian Building Energy Rating Scheme (NABERS) energy
rating certificates (Emissions Data)

20.0

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.
2019

2025

Actual Performance Against
our Target up to end 2022

2030

2035

2030 Target Pathway (-60%)

2040

2045

IEA Beyond 2°C Scenario(B2DS) Alignment Pathway

Energy sector• No financing attribution approach applied

30.0

0

Pathways performance dashboard

Attribution Approach

40.0

10.0

Our approach to sectoral pathways

Buildings sector• Australian Government Building Energy Efficiency Register(NLA of office buildings)

60.0

Sector exposures• All lending to relevant customers

Key External Data
Sources

80.0

Sectoral metrics and targets

Financing Activities
Included

ANZ vs. pathway
11.8%

90.0

Metrics and Targets

Transport sector

0
2019

Risk Management• Emissions from building energy use per square meter of net lettablearea (kgCO₂-e/NLA)1

Metric10.0

Strategy2050
1. On most occasions this was associated with base building energy use, for which our customers elect to get their buildings rated.
2. The B2D scenario puts service buildings on a pathway to achieve net zero emissions by 2050, with most of these savings to be achieved
before 2030. The 2050 convergence to net zero emissions for service buildings aligns closely with the Net Zero Emissions by 2050 scenario
published by the IEA in May 2021.

Manufacturing sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

70

ANZ 2023 Climate-related Financial Disclosures

LARGE-SCALE COMMERCIAL REAL ESTATE (CONTINUED)

Performance against target(not updated in 2023)

Actions to lower emissions of ourcommercial real estate portfolios

The carbon intensity of our Australian large-scale
real estate portfolio has declined consistently since2019. We understand that this is due in large part tothe actions taken by our customers to reduce theirenergy consumption and the carbon intensity of
their final energy use – especially through purchasesof accredited green power.

ANZ engages with a number of large-scalecommercial real-estate customers on their lowcarbon transition plans, and this has been a key
driver in realising opportunities in the sector
for sustainable finance as outlined below.

We have chosen not to report a pathway update
at this time due to a change in the key underlying
data by a third party. We will seek to resolve thischallenge and provide an update as soon aspracticable. Graphs 8a.1 and 8a.2 show theperformance against our target up to end 2022.
We set the pathway for this sector prior to joining
the NZBA and we will review our pathway in 2024 toalign more closely with their guidance. To that end,
we are involved in a working group with some of ourAustralian banking peers that will seek to develop
robust and comparable methodologies formeasuring the financed emissions of commercial
real estate portfolios, and that is expected to
improve the ability to attribute financed emissions.

In 2020, we updated our policy so that all newlarge-scale offices1 financed by ANZ in the largescale commercial real estate sector are required
to have a 5-star NABERS2 rating or above.

Opportunities for emissions reduction
and challenges

Our activity in this respect has supported theconstruction of new buildings and the retrofit
of existing buildings so that they operate withlower carbon intensity. We see these opportunities
continuing to grow in the future as building owners
set their own carbon targets that are expected
to be achieved through a combination of
measures including:• improved energy efficiency;• greater electrification of final energy use;

Overview
Governance
Strategy
Risk Management

Metrics and Targets
Sectoral metrics and targets
Sector exposures• voluntary purchases of green electricity; andOur approach to sectoral pathways• self-generation of electricity from solar PV
installations.

Pathways performance dashboard

Non-residential buildings are one of the largest
end-users of electricity in Australia and will play a
critical role in Australia’s path to net zero emissions.
Green buildings comprise a sizeable proportionof the assets we have funded under our previous$50 billion sustainable solutions target and weanticipate will continue to have a significant role inhelping to achieve our new $100 billion social andenvironmental sustainability target. This includes
around $200m having already been funded or
facilitated towards ‘green buildings’ as part ofour new target, outlined on page 20 of this report.

1. A "large-scale office" is an office building with a Net Lettable Area >10,000 sqm located within a major CBD. 2. National Australian Built Environment Rating Scheme.

Energy sector
Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

71

ANZ 2023 Climate-related Financial Disclosures

Australian Residential Home Loans
Overview

Graph 8b.1 – Australian Residential Home Loans
6.0
Emissions per dwelling (tCO2-e)

Governance

Graph 8b.2 – Financed emissions by State & Territory

5.0
4.0

2%

1%

3%

1%

Strategy
Risk Management

Metrics and Targets

10%
40%

3.0

Sectoral metrics and targets
Sector exposures
Our approach to sectoral pathways

2.0

Pathways performance dashboard

19%

1.0

Energy sector
Transport sector

0
Northern
Territory

Victoria

ACT

Queensland New South
Wales

Western
Australia

South
Australia

Tasmania

Manufacturing sector

Australia

Buildings sector
24%States & Territories
Gas (Scope 1) (tCO2-e)

Electricity (Scope 2) (tCO2-e)

Total lending portfolio

LPG (Scope 1) (tCO2-e)

Residential Home Loans Metrics Summary
2023

Emissions Intensity (t CO₂-e/dwelling)

4.44

Absolute financed emissions (Mt CO₂-e)

1.693

Portfolio-wide intensity (kg CO₂-e/$ lent)

0.006
5.0

Current loans outstanding $bn

2

Victoria

Queensland

South Australia

Northern Teritory

New South Wales

Western Ausralia

ACT

Tasmania

Appendix
Assurance opinion

MetricData Quality Score1

Large Institutional
Agribusiness Customers

Australia

280.17

1. The data quality score was calculated in accordance with guidance made available by the Partnership for Carbon Accounting
Financials (PCAF) in the Global GHG Accounting and Reporting Standard for the Financial Industry – Part A (available here). 2. This figurereflects the status of ANZ’s Australian home loan book at May 31 each year and in cases where the value of the outstanding loan
exceeds the value of the mortgaged home, the outstanding loan value is adjusted down to be equivalent to the value of the house.

72

ANZ 2023 Climate-related Financial Disclosures

AUSTRALIAN RESIDENTIAL HOME LOANS (CONTINUED)

The key design choices we used in calculating the average emissions per dwelling of our Australianresidential home loan portfolio are summarised in Table 8b.
Table 8b – Key design choices in calculating the average emissions intensity of our Australianresidential home loan portfolio
Activities Included• Energy-related emissions from the day-to-day running of ANZ
residential home loan customers’ properties

Emissions Included• Scope 1 (Gas and Liquified Petroleum Gas (LPG)) and Scope 2(electricity use sourced from local electricity grids)

Metric• Average emissions per dwelling (tCO₂-e)

Financing Activities
Included• On-balance sheet loans for the purchase and refinance of residential
properties, including individual homes and multi-family housing witha small number of units

Attribution Approach• Calculated for each individual home loan property and based on aloan-to-value approach where the outstanding amount of loans at
the end of May each year is divided by the property value at loan
origination (or latest financing event)

Benchmarking Scenario• Not applicable (no target set)

Key External Data
Sources• Gas and electricity distributors• State and national energy regulators• Australian Energy Statistics (Department of Climate Change, Energy,
the Environment and Water)

The information in this section should be read together with our disclaimer and important
notices available here and our Financed Emissions Methodology available here.

Performance summary
The average emissions intensity of our Australianhome loan customer’s homes in 2023 was
4.44 tCO₂-e per dwelling. These are the emissions
resulting from our customer’s use of electricity,
gas and LPG across more than 700,000 dwellings
across Australia.
Electricity from local power grids is the largest
source of residential emissions in each state andterritory. Residential emissions are considerably
lower in Tasmania and South Australia, because
those states have the least carbon intensive
electricity grids. In contrast, homes located in thewarmer climate of the Northern Territory werethe largest users of electricity in Australia, mostly
used to cool their homes. This pattern of higher
electricity consumption was replicated for ourcustomers’ homes in Northern Queensland andNorth-Western Australia.

Gas is the next largest contributor to household
emissions, although there are considerable
differences in consumption between state andterritories across Australia. Victoria and the ACT
are the largest users of gas, which is a function ofhigh penetration of gas connections across thosejurisdictions (78% and 66% respectively) and highconsumption per dwelling. In contrast, the warmer
climate of Queensland has translated not only into
low gas connection rates, but also low consumption
per dwelling. LPG consumption is higher instates and territories that don’t have high gas
consumption, especially in Tasmania and theNorthern Territory, where the rates of connection togas distribution networks are low or non-existent.

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

73

ANZ 2023 Climate-related Financial Disclosures

AUSTRALIAN RESIDENTIAL HOME LOANS (CONTINUED)

Graph 8b.4 – Sydney metro

Graph 8b.3 – Melbourne metro

Overview
GovernanceDifferences in energy related emissions
were found to exist not only across different
states and territories of Australia, but also
in dwellings within the same metropolitan
area. The maps on the right show average
emissions per dwelling for postcodes within
metropolitan Melbourne, Sydney andBrisbane that are responsible for almost
two thirds of our total financed emissionsof around 1.7 million tonnes. There weresome common energy usage patterns thatemerged across all three metropolitan areas:

Strategy
Risk Management

Metrics and Targets
Sectoral metrics and targets
Sector exposures
Our approach to sectoral pathways
Pathways performance dashboard
Energy sector• lower energy-related emissions inhigh-density, inner-city areas with multistorey apartments. The smaller living areas,
and fewer occupants in these apartments
has translated into lower overall energy
consumption per dwelling• higher emissions per dwelling in postcodes
containing well established, larger homes
built in the 20th century prior to theintroduction of minimum performancestandards for energy efficiency, andsubsequently require larger amountsof energy to heat and coolTransport sector
Manufacturing sector
4

5

6

7

8

9

10

11

12

Buildings sector

Average Scope 1 and 2 Emissions per Dwelling (tCO2e)

Large Institutional
Agribusiness Customers

Graph 8b.5 – Brisbane metro

Total lending portfolio
Appendix
Assurance opinion• lower emissions per dwelling in highgrowth postcodes where newer homes
have had to achieve a minimum
energy efficiency standard under the
National Construction Code. The greater
percentage of energy efficient homes
in these fast-growing areas is evident,with lower energy-related emissions per
dwelling compared to the older and moreestablished suburbs of metropolitan cities
2.7

3.5

4.3

5.0

5.8

6.6

7.4

8.2

9.0

Average Scope 1 and 2 Emissions per Dwelling (tCO2e)

3.1

3.5

3.9

4.3

4.8

5.2

5.6

6.0

6.4

Average Scope 1 and 2 Emissions per Dwelling (tCO2e)

74

ANZ 2023 Climate-related Financial Disclosures

AUSTRALIAN RESIDENTIAL HOME LOANS (CONTINUED)

Our customers in Victoria, New South Wales andQueensland are responsible for 84% of our total
financed emissions. Around 40% of the total comesfrom our Victorian customers’ homes, where wehave the highest number of residential home loancustomers. Despite Victoria having lower electricity
consumption per dwelling than other states andterritories, this is largely offset by it having the mostcarbon intensive electricity grid and a higher relianceon distributed gas – especially during the colder
winter months. In contrast, the large reliance ofQueensland residents on electricity to run theirhomes, presents a significant opportunity for ourcustomers in this state to achieve a faster path tonet zero emissions, especially with the continued
decarbonisation of the electricity grid and potential
for increased energy self-reliance through high rates
of rooftop solar installation.

Opportunities for emissions reduction
and challenges
For ANZ’s home loan portfolio to reach net zero
emissions, this will depend not only on the actions
that our customers take, but also the combined
actions of governments and regulatory and planningbodies that have a key role in decarbonising energy
supply and improving the energy efficiency ofhomes and the sustainability of urban forms.
As financiers, our role in supporting thedecarbonisation of Australian homes is multifaceted.
Electricity is the largest source of emissions inAustralian homes and ANZ is supporting the higher
penetration of renewables into electricity grids that

supply our customers’ homes. We also recognise
our role in providing finance to build new homes
and retrofit existing homes so they require lessenergy to heat and cool, are powered by energy
efficient appliances and use rooftop solar tooffset as much of their remaining energy use as
possible. We acknowledge we have an importantrole in helping our new and existing home loancustomers to identify, understand and implement
these opportunities.
While ANZ has not yet committed to a target
for reducing the emissions from our Australianhome loan customers’ homes, we recognise thatany pathway to net zero emissions will require aconcerted shift towards electrification of end-uses
such as space heating and water heating andcooking. Taken together, gas and LPG are currently
responsible for 21% of the energy-related emissions
for the average home in our Australian home loan
book. In our largest market of Victoria, it is 35%.
We note recent policy changes of the ACT and
Victorian Governments – along with several otherlocal government jurisdictions – to phase out gas
connections in new homes starting from late-2023.
Significant challenges remain however in electrifying
existing homes and improving their overall energy
efficiency. ANZ recognises we will have an importantrole to play in supporting that transition over the
next 20-30 years and will continue to engage with
relevant stakeholders over the coming years inseeking to ensure our contribution is well targeted
and helps to deliver meaningful cuts in emissions,as well as cost savings for our home loan customers.

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

75

ANZ 2023 Climate-related Financial Disclosures

LARGE INSTITUTIONALAGRIBUSINESS CUSTOMERSIn Australia, the agribusiness sector
represents approximately 14%1 of Australia’s
emission profile with data availability
an ongoing challenge across the sector.
ANZ has set a data coverage target for our Large
Institutional Agribusiness Customers (LIAC)2 to
encourage and support the provision of high quality
and comparable emissions data. The customers
included in the target are all large companies,
either multinationals with significant operations inAustralia or companies headquartered in Australia.
Each of our customers handle one or more of thedifferent agricultural commodities including: grain,
dairy, rice, poultry, beef, viticulture, aquaculture
and horticulture. Each of these commodities hasa unique emissions profile and may require anindustry specific pathway to transition to net zero.
There is currently no widely accepted Paris-aligned
pathway for the sector as a whole and there remainchallenges with the quality and availability of data.
On that basis, ANZ believes it is premature to set
an emissions reduction target. However, with theintention of improving our understanding of our
LIACs and to encourage their efforts to improvedisclosure in this area, we have developed a data
coverage target, see Table 9.

Table 9 – Key design choices in setting the Data
Coverage target:
Data

ANZ
Customers
Included

Seek the disclosure of Scope 1 and 2
emissions at a standard equivalent tothe ‘Australian National Greenhouse
Account Factors’3 by 100% of
relevant LIAC’s4 by the end of
financial year 2027
Companies that own or operatecompanies across the entire value
chain including:• Farm input providers (e.g., fertiliser)• Producers (e.g., beef, lamb, grain,poultry, aquaculture)• Processors (e.g., bulk-handlers,meat processors)• Retailers (e.g. supermarkets)• Quick-service restaurants(large fast food chains)

Key External • Customer public disclosure
Data Sources • National Greenhouse andEmission Reporting• National Greenhouse
Account Factors

ANZ’s LIAC Data Coverage Target will support
our customers as they prepare for the AustralianGovernment’s proposed mandatory Climate-related
Financial Disclosures regime.

Overview

We will support our customers through ongoingengagement to understand their transition plans,emissions reduction targets and how we canassist customers to transition to net zero. As of
30 September 2023, 72% of our Large Institutional
Agribusiness Customers are disclosing Scope 1 and 2
emissions and 41% are doing so to the Australian
Clean Energy Regulator (ACER).5 Those meeting
the ACER standard will also meet this target.

Risk Management

Governance
Strategy

Metrics and Targets
Sectoral metrics and targets
Sector exposures
Our approach to sectoral pathways
Pathways performance dashboard
Energy sector

Agriculture: The practice of cultivating
the soil, growing crops, or raising livestockfor human use, including the productionof food, feed, fibre, fuel, or other usefulproducts. Also known as farming.6
Agribusiness: Large-scale, industrialised
agriculture controlled by corporations,which includes all of the operations
involved in the production, storage,
processing, distribution, and wholesalemarketing of farm products.7

The information in this section should be read
together with our disclaimer and important
notices available here and our Financed
Emissions Methodology available here.
1. DAFF – Global Responses to Climate Change. 2. Consists of our Australian Institutional Food, Beverage and Agribusiness customers. 3. DCCEEW – Australian National Greenhouse Accounts Factors, 2023.
4. The customers covered by this target sit within ANZ’s Institutional portfolio and have a Group Relationship Point in Australia as of 01 October 2023. 5. Clean Energy Regulator. 6. Agriculture, The Oxford Reference.
7. Agribusiness, The Oxford Reference.

Transport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio
Appendix
Assurance opinion

76

ANZ 2023 Climate-related Financial Disclosures

TOTAL LENDING
PORTFOLIO

The analysis shows that from 2019 to 2021, ourestimated total financed emissions in Australia
decreased from 13.4 to 11.9 MtCO₂-e, despite anotable increase in 2020, primarily attributable
to increased outstanding lending to the mining
sector. A similar trend can be observed in thepercentage of Australia’s national emissions that
we financed, which remained below 3% overthe period. In terms of financed emissions
intensity, we observed a 14% decrease in 2021
compared with 2019, as a result of both thedecarbonisation efforts of the Australianeconomy and changes in the compositionof our total Australian lending portfolio.
Time lags involved in compiling national
greenhouse gas emissions inventories meantthat the most recent data accessible at thetime of analysis was from the year 2021, and so
this is the most recent year for which we havecalculated our total lending Portfolio emissions.

The information in this section should be read
together with our disclaimer and important
notices available here and our Financed
Emissions Methodology available here.

1. Includes Scope 1 only. 2. For the purpose of this metric, ourtotal lending portfolio covers lending to the Australian economy,
including industry and business, and residential sectors, as
identified by the Reserve Bank of Australia. 3. Outstanding lendingis the drawn amount of committed loans. Unlike EAD, it does notinclude the undrawn amount or off-balance sheet exposures.

Graph 10.1 – ANZ financed emissions in Australia
15

3.0%

14.1
14

MtCO2-eThis year, we have conducted an
initial analysis to understand thesize of financed emissions1 within our
total lending portfolio in Australia.2

2.86%

13

2.8%
2.7%

2.65%
11

2.6%

2.56%
10

Governance

35.9

34.9

Strategy

30.1

30

Risk Management

25

2.5%

Metrics and Targets

15

Sectoral metrics and targets

10

Sector exposures

5

Our approach to sectoral pathways

0
2019

2021

2020

ANZ financed emissions

40

20

11.9

12

2019

Overview

35
2.9%

13.4

Graph 10.2 – ANZ financed emissions intensity in Australia (tCO₂-e/A$m lent)

Pathways performance dashboard

2021

2020

Energy sector% of Australian emissions financed by ANZTransport sector
Manufacturing sector
Buildings sector
Large Institutional
Agribusiness Customers
Total lending portfolio

ANZ OUTSTANDING
LENDING3 ($BN)

FINANCED EMISSIONS
ABSOLUTE (MTCO₂-E)% AUSTRALIAEMISSIONSFINANCED EMISSIONSINTENSITY (TCO₂-E/$M LENT)

Sector

2019

2020

2021

2019

2020

2021

2019

2020

2021

2019

2020

2021

Agriculture

10.4

11.6

12.6

1.1

1.2

1.0

1.3%

1.4%

1.4%

104.6

102.7

82.6

Mining

2.9

3.5

2.5

2.1

3.0

1.7

2.0%

2.8%

1.7%

723.3

835.7

684.2

Manufacturing

6.3

5.8

5.9

1.9

2.3

2.2

3.3%

4.1%

3.7%

309.3

402.5

364.8

Utilities

3.3

3.2

3.5

5.4

4.8

4.6

2.9%

2.7%

2.8%

1,641.2

1,478.2

1,306.0

Construction

4.1

4.1

4.0

0.2

0.2

0.2

1.4%

1.4%

1.4%

44.6

44.5

43.4

Commercial Services

104.0

100.1

100.0

0.5

0.3

0.2

4.3%

4.2%

4.0%

5.2

3.1

1.5

Transport and Storage

6.6

7.2

7.0

1.6

1.8

1.6

5.1%

6.1%

5.8%

247.2

254.3

229.8

Residential

246.4

257.2

260.4

0.5

0.5

0.4

3.7%

3.6%

2.9%

2.1

2.0

1.6

Total

383.9

392.8

396.1

13.4

14.1

11.9

2.7%

2.9%

2.6%

34.9

35.9

30.1

Appendix
Assurance opinion

ANZ 2023 Climate-related Financial Disclosures

77

TOTAL LENDING PORTFOLIO (CONTINUED)

Our financed emissions in Australia are largely
concentrated in four higher-emitting sectors:
Utilities, Manufacturing, Transport and Storage,
and Mining, which together account for 85% of
our financed emissions in 2021. These four sectors
made up about 5% of our total lending portfolioin Australia.
We recognise that the decarbonisation of these
sectors is key to achieving our net zero. In linewith our NZBA commitment, we are progressively
setting Paris-aligned pathways and targets forthese sectors – see page 43. Additionally, manyof the larger emitters in the sectors for which

we have developed targets are covered in our large
emitters engagement program, through which we
encourage and expect them to strengthen their net
zero transition plans – see pages 22-24.

Overview

The data used for this analysis was sourced from
Australia’s National Greenhouse Accounts (ANGA),
Reserve Bank of Australia (RBA), Australian Prudential
Regulation Authority (APRA) as well as other external
and internal sources. Due to data constraints, thebasis for the calculation is ‘outstanding lending’1
which is different from the Exposure at Default (EAD)
calculation formula that we have used in our sectoral
metrics and targets.

Risk Management

Governance
Strategy

Metrics and Targets
Sectoral metrics and targets
Sector exposures
Our approach to sectoral pathways
Pathways performance dashboard
Energy sector
Transport sector

Graph 10.3 – 2021 ANZ financed
emissions absolute (Scope 1) inAustralia – MtCO₂-e

Graph 10.4 – ANZ outstanding lending inAustralia ($bn)

3%

1%

1%

Large Institutional
Agribusiness Customers

3%

1%

Total lending portfolio

9%

14%

14%

1%
2%
39%

Appendix

Total
Total
deals
$396.1$37.4 million
billion18%

Buildings sector

1%

66%

Total
11.9

Manufacturing sector

25%

2%

Agriculture

Construction

Agriculture

Construction

MiningCommercial Services

MiningCommercial Services

Manufacturing

Transport and Storage

Manufacturing

Transport and Storage

Utilities

Residential

Utilities

Residential

1. Outstanding lending is the drawn amount of committed loans. Unlike EAD, it does not include the undrawn amount or off-balance sheet
exposures.

Assurance opinion

78

ANZ 2023 Climate-related Financial Disclosures

APPENDIX 1TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) INDEXTCFD Category

TCFD Disclosure Recommendation

ANZ response – page

Governancea. Describe the board’s oversight of climate-related risks and opportunities.

Pages 8-11

Disclose the organisation’s
governance around climaterelated risks and opportunities.

b. Describe management’s role in assessing and managing climate-related risks and opportunities.

Pages 8-11

Strategy
Disclose the actual andpotential impacts of climaterelated risks and opportunities
on the organisation’s
businesses, strategy, andfinancial planning wheresuch information is material.
Risk Management
Disclose how the organisation
identifies, assesses, andmanages climate-related risks.

Metrics and Targets
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks
and opportunities where suchinformation is material.

Overview
Governance
Strategy
Risk Management
Metrics and Targets

a. Describe the climate-related risks and opportunities the organisation
has identified over the short, medium, and long term.

Pages 12-20, 22-24, 30, 34-35

b. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy,
and financial planning.

Pages 12-20, 22-24, 30, 34-42

c. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios,
including a 2°C or lower scenario.

Working towards – initial steps outlined
on pages 41-42

a. Describe the organisation’s processes for identifying and assessing
climate-related risks.

Pages 34-42

b. Describe the organisation’s processes for managing climate-related risks.

Pages 36-42

c. Describe how processes for identifying, assessing, and managing climate-related risks are integrated into theorganisation’s overall risk management.

Pages 36-42

a. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its
strategy and risk management process.

Pages 43-77, 80-86

b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks.

Pages 31-32, 43-77, 80-86

c. Describe the targets used by the organisation to manage climate-related risks and opportunities and performanceagainst targets.

Pages 31-32, 43-77, 80-86

Appendix
TCFD Index
TNFD Index
Portfolio financed emissions
pathways and targets
Our ESG targets
Financing sustainability
Environmental footprint
Glossary of abbreviations
Assurance opinion

79

ANZ 2023 Climate-related Financial Disclosures

APPENDIX 2TASKFORCE ON NATURE-RELATED FINANCIAL DISCLOSURES (TNFD) INDEXWith the release of the Taskforce on Nature-related Financial Disclosures (TNFD) framework in September 2023 – this year we are taking steps towards the TNFD’s recommendations to help inform our disclosures.
We have included references to where these disclosures are located below. Our disclosures do not purport to be comprehensive or to satisfy all aspects of the TNFD’s recommended disclosures.

Overview
Governance

TNFD Category

TNFD Recommended Disclosures

ANZ response – page

Strategy

Governancea. Describe the board’s oversight of nature-related dependencies, impacts, risks and opportunities.

Page 11

Risk Management

Disclose the organisation’s
governance of nature-related
dependencies, impacts,
risks and opportunities.

b. Describe management’s role in assessing and managing nature-related dependencies, impacts, risks
and opportunities.

Pages 11, 34-35 and 37

Metrics and Targets

c. Describe the organisation’s human rights policies and engagement activities, and oversight by the board andmanagement, with respect to Indigenous Peoples, Local Communities, affected and other stakeholders, in theorganisation’s assessment of, and response to, nature-related dependencies, impacts, risks and opportunities.

Working towards – see our Climate Change Commitment
available at anz.com.au/about-us/esg/environmentalsustainability/climate-change/

Appendixa. Describe the nature-related dependencies, impacts, risks and opportunities the organisation has identified over the
short, medium and long term.

Working towards – see pages 25-26

Portfolio financed emissions
pathways and targets

b. Describe the effect nature-related dependencies, impacts, risks and opportunities have had on the organisation’s
business model, value chain, strategy and financial planning, as well as any transition plans or analysis in place.

Working towards – see our initial steps we are taking
utilising the ENCORE tool on pages 27-28

c. Describe the resilience of the organisation’s strategy to nature-related risks and opportunities, taking into
consideration different scenarios.

Working towards – see our initial steps we are taking
utilising the ENCORE tool on pages 27-28

d. Disclose the locations of assets and/or activities in the organisation’s direct operations and, where possible,
upstream and downstream value chain(s) that meet the criteria for priority locations.

We seek to disclose this in futurea. (i) Describe the organisation’s processes for identifying, assessing and prioritising nature-related dependencies,
impacts, risks and opportunities in its direct operations.

We seek to disclose this in futurea. (ii) Describe the organisation’s processes for identifying, assessing and prioritising nature-related dependencies,
impacts, risks and opportunities in its upstream and downstream value chain(s)Working towards – initial steps outlined on pages 34-37

b. Describe the organisation’s processes for managing nature-related dependencies, impacts, risks and opportunities.

Pages 34-35

c. Describe how processes for identifying, assessing, prioritising and monitoring nature-related risks are integrated
into and inform the organisation’s overall risk management processes.

Pages 34-35

a. Disclose the metrics used by the organisation to assess and manage material nature-related risks and opportunities
in line with its strategy and risk management process.

We seek to disclose metrics in futureb. Disclose the metrics used by the organisation to assess and manage dependencies and impacts on nature.

We seek to disclose metrics in futurec. Describe the targets and goals used by the organisation to manage nature-related dependencies, impacts, risks
and opportunities and its performance against these.

We seek to disclose further metrics in future – see page 26
for our current target which incorporates considerationof biodiversity

Strategy
Disclose the effects of naturerelated dependencies, impacts,
risks and opportunities on theorganisation’s business model,
strategy and financial planningwhere such information ismaterial.

Risk Management
Describe the processes used by
the organisation to identify,
assess, prioritise and monitor
nature-related dependencies,
impacts, risks and opportunities.

Metrics and Targets
Disclose the metrics and targets
used to assess and manage
material nature-related
dependencies, impacts, risks
and opportunities.

TCFD Index
TNFD Index

Our ESG targets
Financing sustainability
Environmental footprint
Glossary of abbreviations
Assurance opinion

80

ANZ 2023 Climate-related Financial Disclosures

APPENDIX 3
ANZ’S CLIMATE TARGETS – PORTFOLIO FINANCED EMISSIONS PATHWAYS AND TARGETS
Targets

EnergyTransport (new)Manufacturing

Buildings

MetricTargetreduction22030

1. Power generation

50%

113

Intensity

2. Oil and gas

26%

9.4

3. Thermal coal (new)100%

4a. Auto manufacturing

Performance
Scope
inclusion

kgCO₂-e /MWh

Absolute

028%

4b. Aviation

Exposure as at Sept 30 2023

Year

Baseline year
performance 2023

% change from % change frombaseline
pathway

1

2020

225

169

-25%

Mt CO₂-e

1, 2, 3

2020

12.7

8.9

Absolute

Mt CO₂-e

1, 2, 3

2020

9.10

99

Intensity

gCO₂-e /vkm

3

2022

20%6

720

Intensity

gCO₂-e /RTK

1, 3

4c. Shipping

10%

0.43

Absolute

Mt CO₂-e

5. Aluminium

30%

5.79

Intensity

6. Cement

20%

0.49

7. Steel28%

8a. Large-scalecommercial
real estate1

60%

EAD ($bn)% Group EAD

Governance

-12%

9.35

0.80%

Strategy

-30%

-25%

6.67

0.57%

Risk Management

0.39

-96%

-94%

0.08

0.01%

Metrics and Targets

137

128

-7%

-5%

1.91

0.16%

2019

902

828

-8%

-9%

2.04

0.18%

1, 3

2022

0.48

0.42

-14%

-12%

1.24

0.11%

TNFD Index

tCO₂-e/t aluminium

1, 2

2021

8.30

8.73

+5%

+13%

0.68

0.06%

Portfolio financed emissions
pathways and targets

Intensity

tCO₂-e/t cement3

1, 2

2021

0.61

0.57

-7%

-2.8%

0.31

0.03%

Our ESG targets

1.36

Intensity

tCO₂-e/t steel

1, 2

2021

1.90

1.93

+1.6%

+8.5%

1.22

0.10%

Financing sustainability

Shopping
centres:
35.90

Intensity

kgCO₂-e/NLA

1, 2, 32019

Shopping
centres:
89.75

Shopping
centres:
65.71

Shopping
centres:-27%

Shopping
centres:-12%

Officebuildings:
80.21

Officebuildings:
49.56

Officebuildings:-38%

Officebuildings:
-26%

4.44

N/A

N/A

N/A

Officebuildings:
32.09
8b. Residential
home loans (new)Overview

Baseline set,no target

Intensity

tCO₂-e/dwelling

1, 2

2023

Not Assessed4

Other

9. L arge Institutional
Agribusiness
Customers (new)>10% above the pathway<10% above pathway

Date

100% of LIAC
customers5

30 Sept
2027

NGA standard or equivalent e.g.
audited emissions disclosure

TCFD Index

Environmental footprint
Glossary of abbreviations
Assurance opinion

N/A

N/A

Exposure as at Sept 30 2023
CoveragetargetAppendix

Scope
inclusion

Year

Baseline year
performance

EAD ($bn)% Group EAD

1, 2

2023

59%

4.59

0.39%

Below pathway

1. 2022 performance against target (not updated in 2023). Please refer to page 69 for further detail. 2. See sectoral pathways (pages 49 to 77) for further information. 3. In line with the 2022 SBTi Cement Guidance when we refer to our intensity target in tCO₂-e/t cement, we have set an intensity target
per tonne of ‘cementitious product’ rather than per tonne of ‘cement’, per the Cement CO₂ and Energy Protocol. For further details refer to the cement section within this report. 4. Large-scale commercial real estate data has not been apportioned in line with ANZ lending, this will be reassessed in time.
5. See page 75 for definition of LIAC customers. 6. We have restated this target due to an error. We previously stated that our 2030 emissions intensity target for aviation required a 30% reduction from our 2019 baseline whereas, in fact, it only requires a 20% reduction from our 2019 baseline. The target
remains unchanged.

81

ANZ 2023 Climate-related Financial Disclosures

APPENDIX 42023 ESG TARGETS THAT CONTRIBUTE TOWARDS CLIMATE OUTCOMES PERFORMANCE SUMMARY
Overview
Governance

For more information on our full suite of ESG targets, including performance and targets for 2024, see our 2023 ESG Supplement at anz.com/esgreport
Targets

Performance

Fund and facilitate at least $100 billion by end of 2030 insocial and environmental outcomes through customer
activities and direct investments. This includes initiatives
that help lower carbon emissions, protect nature andbiodiversity, increase access to affordable housing andpromote financial wellbeing.

Since 1 April 2023, we have funded and facilitated approximately $8.8 billion,
across 54 transactions, of which $4.1 billion is funded and $4.7 billion is facilitated.
On 31 March 2023 ANZ concluded its $50 billion by 2025 sustainable solutions target.
We had funded and facilitated close to $47.01 billion across 387 transactions and were
forecast to meet our $50 billion target well in advance of 2025.

StatusStrategy

Related UN SDGs

Risk Management
Metrics and Targets

Revisedduring2023

Appendix
TCFD Index
TNFD Index
Portfolio financed emissions
pathways and targets
Our ESG targets
Financing sustainability
Environmental footprint

Engage with 100 of our largest emitting businesscustomers to encourage them to, by end 2024:• We re-engaged with all 100 customers on their low carbon transition plans and efforts
to protect biodiversity this year.

• strengthen their low carbon transition plans sothat more customers achieve a ‘well developed’or ‘advanced’ rating; and• 64 customers now have ‘well developed’ or 'advanced' plans versus 42 in September 2021.

• enhance their efforts to protect biodiversity.

• We prioritised engagement with ‘underdeveloped / starting out’ and ‘no public plans’ rated
customers (those with less developed or no public plans) to seek improvements in their plans.
Seven customers have improved from ‘no public plans’ to ‘underdeveloped / starting out’in 2023.

Glossary of abbreviations

Revisedfor 2024• For biodiversity, 54 customers have targets, policies or strategies in place to protect biodiversity,with 61 making disclosures of their efforts to protect biodiversity.
• We are revising this target with a new phase of engagement with our largest emitting businesscustomers commencing in 2024 triggered, in part, by the Safeguard Mechanism in Australia.

1. This number is a restatement from our 2023 half year unaudited disclosures made on 5 May 2023. The $50 billion target was closed after reaching $47.09 billion; the closing audited balance has since been confirmed as $46.99 billion.

Assurance opinion

82

ANZ 2023 Climate-related Financial Disclosures

APPENDIX 4 – 2023 ESG TARGETS THAT CONTRIBUTE TOWARDS CLIMATE OUTCOMES PERFORMANCE SUMMARY (CONTINUED)

Targets

Performance

StatusRelated UN SDGs

Overview
GovernanceImprove the management of climate change risks
through the following activities by end 2023:• preparing a set of risk standards based on regulatory
obligations, to be applied across all countries
and territories where ANZ operates;• We engaged an external provider to undertake an assessment comparing regulatory expectations acrossseven of the jurisdictions in which we operate: Australia, New Zealand, Singapore, Hong Kong, the United
Kingdom, Europe and the USA. The assessment will help inform the integration of climate risk standards
and obligations into our Non-Financial Risk Framework commencing from 2024.

• extending our Climate Change Risk Assessment(CCRA) methodology beyond our Project Financebusiness, starting with Institutional customers
in higher emitting sectors such as resourcesand energy;• The CCRA has been digitised and integrated into our credit risk assessment process via our Online Customer
Profile platform, alongside our Social & Environmental Risk screening tool.
• The CCRA is being expanded beyond our Project Finance business starting with Institutional energy sector
customers subject to the enhanced due diligence process and customers in our Large Emitters Engagement
Program.
• The CCRA will continue to be rolled out to Institutional customers in a phased approach across 2024 and 2025.

• developing a data strategy to inform our approach
to sourcing and integrating climate data into sectoraltransition pathways, scenario analysis, stress testing
and analytics. This will include lessons learned fromthe New Zealand climate risk program.

• An Environmental Sustainability (ES) data strategy has been developed and endorsed by Data Prioritisation
Forum members.
• We expect the data strategy will help us to develop a more coordinated, centralised approach to climate datathat can be shared across divisions and jurisdictions in which we operate.

Strategy
Risk Management
Metrics and Targets

Appendix
TCFD Index
TNFD Index
Portfolio financed emissions
pathways and targets
Our ESG targets
Financing sustainability
Environmental footprint
Glossary of abbreviations
Assurance opinion

Reduce the direct impact of our business activities
on the environment1 by:• Reducing Scope 1 and 2 emissions by 85% by 2025
and 90% by 2030 (against 2015 baseline);

Scope 1 and 2 emissions have decreased by 80% since 2015

• Increasing renewable electricity to 100% by 20252;

49% of electricity consumption associated with our operations came from renewable sources in 2023

• Reducing water consumption by 40% by 2025
(against 2017 baseline);

Global water consumption has decreased by 61% against a 2017 baseline• Reducing waste to landfill by 40% by 2025
(against 2017 baseline);

Waste to landfill generated by global operations has decreased by 71% since 2017

• Reducing paper consumption (both office and customer
paper use) by 70% by 2025 (against 2015 baseline).

Paper consumption has decreased 71% since 2015

Revisedfor 2024

1. Environmental reporting year is 1 July – 30 June, in line with the Australian regulatory reporting year. 2. Self-generated renewable electricity, direct procurement from offsite grid connected generators e.g. Power Purchase Agreement (PPA) and default delivered renewable electricity from the grid,supported by credible attributes in accordance with RE100 technical guidelines.

83

ANZ 2023 Climate-related Financial Disclosures

APPENDIX 5
ESG TARGETS FOR 2024 THAT CONTRIBUTE TOWARDS CLIMATE OUTCOMESTARGETS

Revised during2023 and for 2024

Fund and facilitate at least $100 billion by end 2030, including $15 billion by end 2024, in social andenvironmental outcomes through customer activities and direct investments by ANZ. This includes
initiatives that help lower carbon emissions, protect nature and biodiversity, increase access toaffordable housing and promote financial wellbeing.

MATERIAL ISSUES

Overview

RELATED UN SDGS

Governance$

Strategy
Risk Management
Metrics and Targets

Appendix
TCFD Index
TNFD Index
Portfolio financed emissions
pathways and targets
Our ESG targets
Financing sustainability
Environmental footprint
Glossary of abbreviations
Assurance opinion

Environmental sustainability$

Financial wellbeing

Housing

84

ANZ 2023 Climate-related Financial Disclosures

APPENDIX 5 – ESG TARGETS FOR 2024 THAT CONTRIBUTE TOWARDS CLIMATE OUTCOMES (CONTINUED)TARGETS

Revised for 2024

MATERIAL ISSUES

Overview

RELATED UN SDGS

Governance

Enhance our management of climate risks and opportunities by intensifying our engagement with
our largest emitting business customers. We will expect and encourage them to strengthen their low
carbon transition plans, by:Strategy
Risk Management• focusing our engagement and raised expectations on our 100 largest emitting customers with theaim that by end 2025, compared to their starting point more customers achieve a ‘well developed’or ‘advanced’ rating for their low carbon transition plans;

Metrics and Targets

Appendix• extending the use of our Climate Change Risk Assessment methodology so that by end 2024 it has
been used to support our engagement with the revised list of our 100 largest emitting customers.

TCFD Index
TNFD Index

Reduce the direct impact of our business activities on the environment1 by:

Portfolio financed emissions
pathways and targets• Reducing combined scope 1 and 2 emissions 85% by 2025 and 90% by 2030 (against 2015 baseline);• Increasing renewable electricity to 100% by 2025;• Reducing water consumption by 40% by 2025 (against 2017 baseline);• Reducing waste to landfill by 40% by 2025 (against 2017 baseline);• Reducing paper consumption (both office and ANZ originated customer paper use) by 70%
by 2025 (against 2015 baseline)1.

Our ESG targets
Financing sustainability
Environmental footprint
Glossary of abbreviations

Helping New Zealand homeowners improve the sustainability of their homes and/or reduce theirtransport emissions through discounted lending of at least NZ$670m in aggregate to at least 16,000
households by end 2025. (New Zealand)

1. Environmental reporting year is 1 July – 30 June, in line with the Australian regulatory reporting year.

Assurance opinion

Environmental sustainability$

Financial wellbeing

Housing

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ANZ 2023 Climate-related Financial Disclosures

APPENDIX 6FINANCING SUSTAINABILITY – $50B SUSTAINABLE SOLUTIONS TARGET AND$100B SOCIAL AND ENVIRONMENTAL SUSTAINABILITY TARGET
Overview

On 31 March 2023 ANZ concluded
its $50 billion by 2025 sustainable
solutions target. We had funded
and facilitated close to $47.0 billion.1$50b sustainable solutions target - 1 October 2019 to 31 March 2023
7% SOCIAL

Governance
Strategy

38% ENVIRONMENTAL

Risk Management

Facilitated$16.6 billion
4

Therefore, on 1 April 2023 ANZ commenced
a new social and environmental sustainability
target to fund and facilitate at least $100
billion by the end of 2030 in social andenvironmental outcomes through customer
activities and direct investments by ANZ.

$1.5 billion Affordable Housing$3.8 billion Energy$0.3 billion Water$0.5 billion Other Social$6.3 billion Green Building$0.03 billion Environmental Markets$0.8 billion Transport$0.3 billion Information &Communication Technology

Funded 2$30.4 billion3$0.2 billion Waste

55% SUSTAINABILITY-LINKED

Appendix
TCFD Index
3%$0.5 billion Advisory

TNFD Index

7%$1.1 billion Green Buildings/
Renewables Loan Distribution

Portfolio financed emissions
pathways and targets

90% $15 billion ESG-format Bonds$16.6 billion Sustainability-Linked Facilities

See page 20 for more details.

Metrics and Targets

Our ESG targets
Financing sustainability
Environmental footprint
Glossary of abbreviations

Progress towards our $100b social and environmental sustainability target - 1 April 2023 to 30 September 2023
13% SOCIAL$0.4 billion Affordable Housing$0.5 billion Energy$0.09 billion Other Social$0.2 billion Green Building

Funded 5$4.1 billion

Assurance opinion

21% ENVIRONMENTAL

Facilitated6$4.7 billion$0.04 billion Transport$0.08 billion Waste

66% SUSTAINABILITY-LINKED

100% $4.6 billion

ESG-format Bonds

0%$0.005 billion
Affordable Housing$2.7 billion Sustainability-Linked Facilities

1. This number is a restatement from our 2023 half year unaudited disclosures made on 5 May 2023 when the $50 billon target was closed after reaching $47.09 billion; the closing audited balance has since been confirmed as $46.99 billion. 2. For more information on funded categories see
ANZ’s 2022 ESG Supplement. 3. Numbers do not add to total due to rounding. 4. For more information on facilitated categories see ANZ’s 2022 ESG Supplement. 5. For more information on funded categories see ANZ's Social and Environmental Sustainability Target Methodology.
6. For more information on facilitated categories see ANZ's Social and Environmental Sustainability Target Methodology.

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ANZ 2023 Climate-related Financial Disclosures

APPENDIX 7
ENVIRONMENTAL FOOTPRINT
Operational footprint1

Overview

GHG emissions Scope 1 and 2 (tonnes CO2-e)

2023

2022

2021

2020

2019

Australia

67,76179,78788,808101,210

115,688

New Zealand

3,602

4,429

5,205

5,526

6,846

Asia Pacific, Europe and America

17,675

17,664

17,39527,35734,034

Total2

89,038101,879

111,409

134,093

156,568

Global GHG emissions Scope 1, 2 and 3(tonnes CO2-e)

2023

2022

2021

2020

2019

SCOPE 1
Premises energy

2,668

2,229

1,931

1,811

3,091

Vehicle transport

3,448

3,566

4,476

9,832

13,018

69

24

17

119

140

Other3SCOPE 2Premises energy

82,85396,060104,984

122,331

140,319

SCOPE 34
Premises energy

10,325

13,143

16,84323,33028,367

Vehicle transport

1,380

600

668

1,606

2,069

Travel – flights and accomodation

13,252

4,114

1,984

22,10938,927

Employee commuting5

10,905

5,348

5,438

15,546

19,400Paper6

1,945

2,315

2,826

5,013

2,720

Waste6

1,113

1,135

1,564

1,770

2,511

Water6, 7

329

306

186

233

297

11,37011,673

12,780

N/A

N/A

Cloud services9

3,209

N/A

N/A

N/A

N/A

Freight and postage9

6,233

N/A

N/A

N/A

N/A

Capital goods10

558

N/A

N/A

N/A

N/A

149,658

140,514

153,697

203,700

250,857

Work from home

Total

8

Global GHG emissions Scope 1, 2 and 3(tonnes CO2-e) – Market-Based

2023

2022

2021

202012

Scope 1

6,185

5,819

6,424

11,762

Scope 235,93948,53159,004

83,324

Scope 357,34130,75632,65359,578Strategy

Total Market-Based

99,464

85,10698,082

154,664

Carbon offsets retired11

99,464

85,10698,082

154,664

0

0

0

0

Net GHG emissions

GovernanceRisk Management
Metrics and Targets

Appendix
TCFD Index
TNFD Index

1. Environmental reporting year runs 1 July – 30 June to align to environmental regulatory reporting requirements. 2. Values may not add
to totals due to rounding. 3. Indicates estimated emissions arising from the operation of a black water treatment plant at ANZ’s Global
Headquarters in Melbourne, Australia. 4. Scope 3 emissions from our lending (‘portfolio emissions’) are not included in the boundary of the
carbon neutral assessment as this assessment scope is limited to ANZ’s operations. To reduce our portfolio emissions, we are transitioning ourlending in line with goals of the Paris Agreement. We are applying emerging tools used by peer banks to measure and compare our efforts in
reducing emissions, including how we can report on the impact of our lending decisions. 5. Represents employee commuting emissions fromstaff working in key commercial office locations in Australia and New Zealand. 6. Comparisons with previous years' figures must be viewed
with caution due to different methodology. 7. From 2021 includes global water emissions values, 2018 – 2020 values include Australia only.
8. Emissions associated with increased home energy use from heating/cooling, lighting, equipment electricity and fuel use as a result of theshift of Australian and New Zealand staff from working out of offices, to working from home. This was calculated and externally assured for the
first time in 2021. 9. Data available for the first time in 2023. 10. Capital goods include embodied carbon of new branch fit outs in Australia,
and laptop purchases in New Zealand. Emissions from fit out embodied carbon have been extrapolated using an assessment of one Breathe
designed retail branch. The stages of emissions calculated in this assessment are from the Raw Material Supply, Transport and Manufacturing(A1-A3) for one Breathe designed retail branch. Construction Phase (A4-A5) has not been calculated due to unreliable data sources. Currently
New Zealand is the only country where ANZ purchase laptops for staff. In other countries, laptops and associated IT equipment are leased.
11. Carbon offsets for ANZ's global business operations have been retired in accordance with The Climate Active Carbon Neutral Standard andexternally assured. 12. ANZ has retired carbon offsets for its business operations since 2010. 2020 was the first year ANZ adopted the marketbased reporting method to account for purposefully purchased renewable energy attributes.

For more details on our environmental footprint
data, see our 2023 ESG Data and Frameworks
Pack, available at anz.com/esgreport.

Portfolio financed emissions
pathways and targets
Our ESG targets
Financing sustainability
Environmental footprint
Glossary of abbreviations
Assurance opinion

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ANZ 2023 Climate-related Financial Disclosures

APPENDIX 8GLOSSARY OF ABBREVIATIONSABAAustralian Banking Association

CMRC

Credit and Markets Risk Committee

IGCC

Investor Group on Climate Change

ACCU

Australian Carbon Credit Units

CRE

Climate Reporting Entities

IIX

Impact Investment Exchange

ACER

Australian Clean Energy Regulator

CVA

Climate Vulnerability Assessment

IPCC

ACT

Austalian Capital Territory

EAD

Exposure at Default

Intergovernmental Panelon Climate Change

ANGA

Australia's National
Greenhouse Accounts

EAF

Electric Arc Furnances

EEC

Energy Efficiency Council

ANZBGL

Australia and New Zealand
Banking Group Limited

LEAP

EESG

Ethics, Environment, Socialand Governance Committee

ENCORE

Exploring Natural Capital
Opportunities, Risks and Exposures

ANZGHLANZ Group Holdings Limited

ANZSIC

Australian and New ZealandStandard Industrial Classification

APRA

Australian Prudential
Regulation Authority

ERBC

Ethics and Responsible
Business CommitteeES

Environmental Sustainability

ASFI

Australian Sustainable
Finance Institute

ESG

Environment, Social and Governance

ASX

Australian Securities Exchange

EV

Electric vehicle

B2DS

Beyond 2°C Scenario

EVIC

BF-BOF

Blast Furnace – Basic Oxygen Furnace

FMCA

Financial Markets Conduct Act 2012
(New Zealand)

BoM

Austalian Bureau of Meteorology

FX

Foreign Exchange

BRC

Board Risk Committee

CAF

Climate Advisory Forum

CCRA

Enterprise value including cash

PBR

United Nations Principles
of Responsible Banking

Overview
Governance

PCAF

Partnership for Carbon
Accounting Financials

PHEV

Plug-in Hybrid Electric Vehicle

PPA

Power Purchase Agreement

Locate, Evaluate, Assess and Prepare

RAP

Rangatahi Advisory Panel

Appendix

LEED(certitfied)

Leadership in Energy andEnvironmental Design

RAS

Risk Appetite Statement

TCFD Index

RBA

Reserve Bank of Australia

LEEP

Large Emitters Engagement Program

RBNZ

Reserve Bank of New Zealand

LIAC

Portfolio financed emissions
pathways and targets

Large Institutional
Agribusiness Customers

REIT

Real Estate Investment Trust

Our ESG targets

LNG

Liquefied Natural Gas

RIAA

Responsible Investment
Association Australiasia

LPG

Liquefied Petroleum Gas

RMF

Risk Management Framework

MW

Megawatt

RMS

Risk Management Strategy

MWhMegawatt hours

SAF

Sustainable Aviation Fuel

NABERS

National Australian Building
Energy Rating Scheme

SAFI

Sustainable Agriculutre
Finance Initiative

NFRF

Non-Financial Risk Framework

SBTi

Science Based Targets Initiative

NGFS

Network for Greening the
Financial System

SDG

Sustainable Development Goals

NLA

Net lettable area

TCFD

Task Force on Climate-related
Financial Disclosures

NZ CA

Aotearoa New Zealand
Climate Standards

TNFD

Taskforce on Nature-related
Financial Disclosures

IUCN

International Union forConservation of Nature

GFANZ

Glasgow Financial Alliancefor Net Zero

Climate Change Risk Assessment

GHG

Greenhouse gas

CCUS

Carbon capture utilisation/storage

HR

Human Resources

CEFC

Clean Energy Finance Corporation

IAIInternational Aluminium Institute

NZBA

Net-Zero Banking AllianceCEO

Chief Executive Officer

IATA

International Air Transport Association

NZE 2050

CITES

Convention on International Tradein Endangered Species of Wild Fauna
and Flora

ICMA

Interational Capital Market Association

Net Zero Emissions by 2050
World Scenario

IEA

International Energy Agency

OREC

Operational Risk Executive Committee

Strategy
Risk Management
Metrics and Targets

TNFD Index

Financing sustainability
Environmental footprint
Glossary of abbreviations
Assurance opinion

88

ANZ 2023 Climate-related Financial Disclosures

INDEPENDENT ASSURANCE REPORT TO
THE DIRECTORS OF ANZ GROUP HOLDINGS LIMITED
Information Subject to Assurance
Conclusioni)	Climate-related Financial
Disclosures – Limited Assurance
Based on the evidence we obtained
from the procedures performed, we are
not aware of any material misstatementsin the ANZ 2023 Climate-related Financial
Disclosures report, which has been
prepared by ANZ in accordancewith the Criteria for the year ended
30 September 2023.
ii)	GHG Emissions – Reasonable
Assurance
In our opinion, in all material respects,
ANZ’s reported Global Scope 1 and 2
GHG Emissions (location based) has
been prepared in accordance with theCriteria for the year ended 30 June 2023.
iii)	GHG Emissions – Limited Assurance
Based on the evidence we obtained fromthe procedures performed, we are notaware of any material misstatements
in ANZ’s reported Global Scope 3 GHG
Emissions (location based) or Global
Scope 1, 2 and 3 emissions (market
based), which has been prepared inaccordance with the Criteria for theear ended 30 June 2023.

ANZ Group Holdings Limited (ANZ) engaged KPMG
to perform a limited assurance engagement inrelation to the ANZ 2023 Climate-related Financial
Disclosures report, which is attached to thisassurance report.
KPMG’s scope of work comprised, as presented
in the ANZ 2023 Climate-related Financial
Disclosures report:i)limited assurance over all material narrative anddata claims. This covers ANZ’s global operations
for year ended 30 September 2023 unlessotherwise indicated;ii) reasonable assurance over Global Scope 1 and
2 GHG emissions (location based) for the year
ended 30 June 2023, being 89,038 tCO₂-e; and• Net Zero Banking Alliance Guidelines for
Climate Change Target Setting (NZBA)
commitments;• ANZ’s Financed Emissions Methodology
available at anz.com/esgreport; and• ANZ’s Social and Environmental
Sustainability Target Methodology
available at anz.com/esgreport.
ii),iii) The Global Scope 1, 2 and 3 GHG Emissions,are prepared in accordance with the World
Resources Institute / World Business Council
for Sustainable Development (WRI / WBCSD),The GHG Protocol Corporate Accounting andReporting Standard, and Management’s basisof reporting, being the ANZ Greenhouse Gas
Reporting and Carbon Offset Guidelines.

iii) limited assurance over Global Scope 3 GHG
Emissions (location based), being 60,620 tCO₂-e,
and Global Scope 1, 2 and Scope 3 GHG
Emissions (market-based) being 99,464 tCO₂-e
for the year-ended 30 June 2023.

Basis for Conclusions

Criteria Used as the Basis of Reporting• Used our professional judgement to plan andperform the engagement to obtain limited
assurance that we are not aware of any material
misstatements in the ANZ 2023 Climate-related
Financial Disclosures report and, Global Scope 3
GHG emissions (location based) and Global Scope
1,2 and 3 emissions (market based), whether due
to fraud or error;i)

The ANZ 2023 Climate-related Financial
Disclosures report is prepared in accordancewith the:• Financial Stability Board’s Task Forceon Climate-related Disclosures (TCFD)
Implementing the Recommendationsof the Task Force on Climate-related
Financial Disclosures Annex 2017;• TCFD 2021 Implementing the
Recommendations of the Task Force on
Climate-related Financial Disclosures
Annex, where applicable;

We conducted our work in accordance with
Australian Standard on Assurance Engagements
ASAE 3000 (Standard). In accordance with theStandard we have:• Used our professional judgement to assess
the risk of material misstatement and plan andperform the engagement to obtain reasonableassurance that the Global Scope 1 and 2 GHG
Emissions (location based) are free from material
misstatement, whether due to fraud or error;

2023 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights
reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.

• Considered relevant internal controls when
designing our assurance procedures, however we
do not express a conclusion on their effectiveness;and• Ensured that the engagement team possess theappropriate knowledge, skills and professional
competencies.

Summary of Procedures Performed
Our assurance conclusion is based on the evidence
obtained from performing the following procedures:i)

Climate-related Financial Disclosures –limited assurance:• Enquiries with management responsible tounderstand the internal controls, governancestructure and reporting process;• Interviews with management responsiblefor developing the content (narrative anddata) within the ANZ 2023 Climate-related
Financial Disclosures report to understandthe approach for monitoring, collation andreporting;• Assessment of the suitability of the Criteria
including ANZ’s application of the TCFD
and NZBA frameworks, and ANZ’s Financed
Emissions Methodology• Testing over ANZ’s environment targets
and performance to date;• Review of supporting documentation to
substantiate discussions with management
in relation to ANZ’s 2023 Climate risk target
being the development of climate-related
risk standards based on regulatory
obligations, extension of ANZ’s Climate
Change Risk Assessment methodology
and the development of a climate-related
data strategy;

Overview
Governance
Strategy
Risk Management
Metrics and Targets
Appendix

Assurance opinion

89

ANZ 2023 Climate-related Financial Disclosures• Testing over the new NZBA sector
decarbonisation targets (auto-manufacturing,
aviation, shipping and thermal coal), and theexisting pathways for cement, aluminium,
steel, oil & gas, large scale commercial realestate and power generation sectors;• Testing over the new Residential Home Loansfinanced emissions baseline• Comparing narrative and data (on a sample
basis) presented to underlying sources. This
includes considering whether all material
matters had been included or excluded; and• An assessment that the information ispresented in accordance with the Criteria;ii) Global Scope 1 and 2 GHG Emissions –reasonable assurance• Interviews with senior management andrelevant staff• Evaluation of the design and implementationof the key systems, processes and controls forcollecting, and reporting the GHG emissions
data• Assessment of operational control andreporting boundaries• Detailed data and analytical review of the
GHG emissions focusing on source variances;site-level variances; absence of data testing;and same value testing• Testing a sample of Scope 1 natural gas
and transport fuels and Scope 2 electricity
transactions back to underlying invoices; and• Assessing emission factor sources andre-performing emission factor calculationsiii) Global Scope 3 GHG Emissions –limited assurance:• Interviews with senior management
and relevant staff• Understanding the key systems, processes
and controls for collecting, managing
and reporting of Global GHG Emissions• Walkthroughs of key data sets
• Detailed analytical procedures• Agreeing Global GHG Emissions to relevant
underlying sources on a sample basis; and• Assessing emission factor sources andre-performing emission factor calculations

How the Standard Defines Limited
Assurance, Reasonable Assurance
and Material Misstatement
Reasonable assurance is a high level of assurance,
but is not a guarantee that it will always detecta material misstatement when it exists.
A limited assurance engagement is restrictedprimarily to enquiries and analytical procedures.
The procedures performed in a limited assurance
engagement vary in nature and timing from, andare less in extent than for a reasonable assurance
engagement. Consequently the level of assurance
obtained in a limited assurance engagement issubstantially lower than the assurance that would
have been obtained had a reasonable assurance
engagement been performed.

Use of this Assurance Report

Our Responsibility

Overview

This report has been prepared for the Directors of
ANZ Group Holdings Limited for the purpose ofproviding an assurance conclusion on the ANZ 2023
Climate-related Financial Disclosures report and may
not be suitable for another purpose. We disclaim any
assumption of responsibility for any reliance on thisreport, to any person other than the Directors of
ANZ, or for any other purpose than that for which
it was prepared.

Our responsibility is to perform limited andreasonable assurance work in relation to the
ANZ 2023 Climate-related Financial Disclosures
report for the year ended 30 September 2023 and30 June 2023, and to issue an assurance report that
includes our conclusion.

Governance

ANZ’s Responsibility

We have complied with our independence andother relevant ethical requirements of the Codeof Ethics for Professional Accountants (including
Independence Standards) issued by the AustralianProfessional and Ethical Standards Board, andcomplied with the applicable requirements ofAustralian Standard on Quality Management 1
to maintain a comprehensive system of quality
management. We have also complied with ANZ’s
Stakeholder Engagement Model for Relationshipwith External Auditor (available on anz.com).

Management are responsible for:• determining that the Criteria is appropriate
to meet their needs;• preparing and presenting the ANZ 2023
Climate-related Financial Disclosures reportin accordance with the Criteria; and• establishing internal controls that enable thepreparation and presentation of the ANZ 2023
Climate-related Financial Disclosures report thatis free from material misstatement, whether due
to fraud or error.

KPMG

Misstatements, including omissions, are consideredmaterial if, individually or in the aggregate, they
could reasonably be expected to influence relevant
decisions of the Directors of ANZ.

2023 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights
reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.

Our Independence and Quality
Management

Adrian King
Partner
KPMG Melbourne
10 November 2023

Strategy
Risk Management
Metrics and Targets
Appendix

Assurance opinion

anz.com/esgreport

ANZ Group Holdings Limited (ANZ) ABN 16 659 510 791.
9/833 Collins Street, Docklands Victoria 3008 Australia.
ANZ’s colour blue is a trade mark of ANZ.