2021
ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
INVESTOR PACKROUNDTABLE
26 NOVEMBER 2021

Approved for distribution by ANZ’s Continuous Disclosure Committee
Australia and New Zealand Banking Group Limited 9/833 Collins Street Docklands Victoria 3008 Australia
ABN 11 005 357 522

DISCLAIMER & IMPORTANT NOTICE

The material in this presentation is general background information about ANZ’s activities current as at the date of the presentation. It is information
given in summary form and does not purport to be complete. It is not intended to be and should not be relied upon as advice to investors or potential
investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered,with or without professional advice when deciding if an investment is appropriate.
This presentation may contain forward-looking statements or opinions including statements regarding our intent, belief or current expectations withrespect to ANZ’s business operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk
management practices. When used in this presentation, the words ‘forecast’, ‘estimate’, ‘project’, ‘intend’, ‘anticipate’, ‘believe’, ‘expect’, ‘may’,‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’, ‘could’, ‘should’ and similar expressions, as they relate to ANZ 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
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Reform Act of 1995. ANZ 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 date hereof to reflect the occurrence of unanticipated events.

1

CONTENTS
OVERVIEW

4–7

Key messages

5

Our approach

6

OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY

8 – 11

Supporting our customers and steering our portfolio

9

Enabling our business strategy

11

CLIMATE RISK

12 – 13OUR UPDATED CLIMATE CHANGE COMMITMENT

14 – 16

Summary of key changes
ALIGNING OUR LENDING DECISIONS TO THE PARIS AGREEMENT GOALS

16
17 – 22

Finance to back customers reducing emissions

19

Aligning portfolio emissions with 2050 pathways

21

ENGAGING CONSTRUCTIVELY AND TRANSPARENTLY WITH STAKEHOLDERS
Customer engagement to support emissions reductions
ADDITIONAL REFERENCE MATERIAL

23 – 25
24
28 – 432

2021
ESG INVESTOR PACKOVERVIEWOVERVIEW

1

Significant opportunities arising from a decarbonising economy

2

ANZ well positioned to facilitate the transition to net zero emissions

3

Responding through a new Environmental Sustainability Strategy and priority areas of focus

4

Our updated Climate Change Commitment sets out our “more finance for lower emissions” targets

5

Update on our engagement with 100 of our largest emitting business customers

4KEY MESSAGESRESPONDING TO CLIMATE RISKS AND EMBRACING THE OPPORTUNITIES• Climate change is a financial risk, and a shared challenge for our customers, governments and thefinancial sector• The transition to a low carbon economy also presents new and significant opportunities. Trillions ininvestment will be required for the world to transition to net zero emissions by 2050
• We are embracing these opportunities as we move to: protect the bank by enhancing our climate risk
management, adapt to the change, engage with our stakeholders; and prepare the bank for the future• The biggest role we can play is through our financing, services and advice – backing customers thathave the right plans and commitments in place• We commit to providing more finance to support customers, the community and the economy toachieve lower emissions• We are in a strong position to support the transition to a net zero emissions economy – through ourpeople, experience, capabilities and global footprint

5

OUR APPROACH

ANZ’s CLIMATE AMBITION

To be the leading Australia- and New Zealand-based bank in supporting customers to transition to net zero emissions by 2050
The opportunity
The pathway to net zero emissions presents significant financing opportunities, which we’ll realise together with our customers
Our environmental sustainability strategy
Support our customers in shifting to low carbon business models and operations through directing our finance, services and advice
into key priority areas and sectors
Our key focus areas to achieve our net zero ambition

Help our customers andindustries to transition

Align lending decisions
to the Paris goals

Engage constructively andtransparently withstakeholders

Reduce our own
impact andemissions

Facilitated by…
Our Climate Change
Commitment

Our sensitive sector
policies and screening
tools

An integrated risk
management approach

Industry and productexpertise

Staff with deep
understanding of climate
risks and opportunities

6

A GLOBAL TRANSFORMATION IS REQUIREDTRANSITION TO NET ZERO REQUIRES ~$125 TRILLION¹ IN INVESTMENT, WITH >50% REQUIRED ACROSS ASIA–PACIFICREGION
Critical minerals
sector2

Transitioning energy
from high to low
carbonElectrification oftransport

Food, beverage andcommodities

Globally expected to double
to US$100b by 20303

E.g. renewable energy
projects pipeline carries
global investment value of~AU$270b4

Sector likely to need totaltransition spend of US$10
trillion5, as the world
converts to electric vehicles

Sector likely to need
AU$5.7b6 in investment
each year to meet net zeroby 2050

HydrogenCarbon capture use
and storage

Environmental
markets9

ESG advisory

Global demand is projected
to reach:~200Mt by 2040
~400Mt by 20507>60 projects in operation /under development
globally8

Expected to increase 15x
by 203010 driven by net
zero commitments

1.
Source: Vivid Economics, McKinsey
2.
Includes: Lithium, Copper, Nickel, Cobalt and rare earths
3.
Source: Department of Industry, Science, Energy and Resources and Australian Trade and Investment Commission Australia’s Critical Minerals Strategy (2019)4.
Source: BloombergNEF, ANZ Research
5.
Source: ANZ and McKinsey
6 & 10. Source: McKinsey
7.
Source: Australian Hydrogen Council’s ‘National Hydrogen Strategy’
8.
Source: ANZ
9.
Includes: Sequestration, carbon-offsets, reduction and environmental market units

Increasing requirements forcorporates and funds todevelop / deliverenvironmental sustainability
strategies

7

2021
ESG INVESTOR PACKOUR ENVIRONMENTAL SUSTAINABILITY STRATEGYSUPPORTING OUR CUSTOMERS AND STEERING OUR PORTFOLIOAMBITION TO BE THE LEADING AUSTRALIA-AND NEW ZEALAND-BASED BANK IN SUPPORTING CUSTOMERS TO
TRANSITION TO NET ZERO EMISSIONSKEY PRIORITY AREAS AND SECTORS WE’LL PURSUE

Supporting
sustainability inresource extraction¹,
basic materials² andnew technologies³

1.
2.
3.
4.
5.

Banking theelectrificationof thetransportation
value chain

Enabling thetransition
towards lower
emissionsbuildings⁴

Increasing our
support forcompanies intransitioning
energy fromhigh to low
carbonAssistingsustainable
food, beverage andcommodities
practices andsupply chains
Offering
solutions to, andpartnering with,sustainability-focusedfinancial institutions⁵

Banking sustainable resource extraction in areas such as iron ore, lithium, nickel, cobalt, rare earths, copper and bauxite
Banking basic materials production including green steel and low-carbon aluminium production
Financing new technology projects focused on upstream hydrogen and carbon capture use and storage
Initial focus on financing high-efficiency residential buildings and retrofits
Supplying green investment options for environmental sustainability-focused funds/insurers and partnering with financial institutions to deliver alternative capital

9

WELL POSITIONED TO SUPPORT OUR CUSTOMERSINSTITUTIONAL•

Helping companies move goods and capital across the region•

Operating in 32 markets globally, in Asia for 50+ years•

Support multi-national and regional corporates throughthe supply chain, across our network¹•

Leading Institutional bank in home markets²,³•

Banking customers that are leading the transition
globally•

Resources, energy &infrastructure•

Food, beverage &agribusiness•

Manufacturing•

Financial institutions••

Transportation & logistics••

Property•

Markets &customers

Telecommunications,media, entertainment &technology•

Financial Institutions & Funds•

Digital Platforms & Automation

Consumer & Retail•

Cross Border Payments

Government, Education,
Health•Data & Insights#1 in ESG Finance in Australia andFunded and facilitated $21.95b in sustainable
solutions since 2019

1.
2.
3.
4.
5.

Markets• FX; Rates; Commodities; Credit & Capital Markets;
Risk Management solutions

Environmental Sustainability

Industry
expertise

Strategic
initiatives

DEBT CAPITAL MARKETS•New Zealand4•

Banking
solutions

Corporate Finance• Lending; Specialised Finance; Corporate Advisory &Syndications•SUSTAINABILITY•

Transaction Banking• Trade; Payments & Cash Management; Supply Chain•

LOAN SYNDICATION#1 Mandated Lead Manager and Bookrunner in#1 Mandated Arranger and Bookrunner in

AUD in 2021; #1 for the past 10+ years5

Australia/NZ in 2021; #1 in 8 of the past 10 years5#1 Mandated Lead Manager and Bookrunner in

Leading International Bank as Mandated Arranger

NZD in 2021; #1 for the past 15+ years5

and Bookrunner in Asia–Pacific (ex Japan) in 20215

Ranked #1 by Greenwich Associates for overall relationship quality in Asia
Ranked #1 by Peter Lee Associates for overall relationship strength, support through COVID and ESG & Sustainable Finance in Australia
Ranked #1 by Peter Lee Associates for overall penetration, relationship strength, support through COVID and ESG & Sustainable in New Zealand
Ranked #1 by Peter Lee Associates for ESG Market Leader and ESG Lead Provider in Australia and New Zealand (customers using ESG)
Source: Bloomberg bond and syndicated lending league tables. Debt Capital Markets @ 30 Sep 2021. Syndicated Lending @ YTD 2021

10

ENABLING OUR BUSINESS STRATEGYINVESTING IN KEY PARTS OF OUR BUSINESSTo deliver on our ambition to be the leading Australia- and New Zealand-based bank in supporting customers to transition,
we will invest in our business across a number of areas

Deepening ourunderstanding of theStrengthening ourenvironmental

Tailoring our industry
and productEvolving ourgovernance models

Maintaining a focus ontechnological andtransition for ourcustomers, employees
and the community

sustainability risk
management andpractices

strategies based on
how we can better help
clients and their sectors
position for change

to protect ANZ
and our clients

digital innovation,e.g. using data to help
clients navigate change

Developing the right internal culture and mindset
focused on environmental sustainability

11

2021
ESG INVESTOR PACK

CLIMATE RISKMANAGING CLIMATE RISKACTIVELY MANAGING CLIMATE RISK WITHIN OUR GROUP RISK MANAGEMENT FRAMEWORK
Focused on managing the risks and the opportunities of climate changeThis includes:• Engaging closely with our largest emitting business customers on the work they’re doing to transition to a low carbon future• Understanding significant reductions in the cost of energy alternatives, aided by new technology• Understanding how the transition to net zero emissions will impact global demand for natural resources and the flow-on effects to prices• Engaging with our regulators on climate risk guidance for banks and financial institutions

Enabled greater oversight and control for our Board and Executive Committees on climate risks
Key actions:• Have set a public ESG target to develop an enhanced climate risk management framework that strengthens our governance and is responsive to climatechange (by end 2022). To help deliver on this target we’ve established new work streams, including:o Regulatory – monitoring emerging trends from regulators in key markets, relating to climate risk management, to assess impacts and ensurecompliance against new obligationso Analytics – measuring the carbon intensity of industry exposures within our portfolio and developing ESG data and analytical capabilities• Established a new Climate Advisory and Coordination Forum, which is Chaired by the Group Executive, Institutional and includes the Group Chief Risk
Officer• Responding to APRA’s Climate Vulnerability Assessment, which examines the material exposures and financial risks banks may face due to climate risks• Embedding our environmental sustainability strategy into our risk function through updates to our risk appetite statements, approval processes, and a
new centre of excellence for how we assess and approve deals
13

2021
ESG INVESTOR PACKOUR UPDATED CLIMATE CHANGE COMMITMENTOUR UPDATED CLIMATE CHANGE COMMITMENTOUR KEY FOCUS AREAS

•

1

2

3

4

Supporting customers andindustries to transition

Aligning our lending
decisions to the Paris
Agreement goals

Reducing our footprint

Engaging constructively andtransparently withstakeholders

Implementing ourenvironmental sustainability• Metrics, pathways andtargets to support low

strategy••

Providing finance, services
and advice
Supporting an orderlytransition

emissions lending• Setting targets forrenewable electricity
usage, loweringgreenhouse gas emissions• Empowering andeducating our employees• Engaging with our largest
emitting businesscustomers• ESG market briefings androundtables• Reporting risks andopportunities using TCFD
recommendations

15

SUMMARY OF KEY CHANGES IN OUR 2021 CLIMATE COMMITMENT

FOCUS AREA

CHANGE

Supporting thetransition

State our ambition to be the leading Australia-and New Zealand-based bank in supporting customers totransition and how we will achieve thisEmployee development
on climate risks andopportunities

Commit to equip our people with a deeper understanding of climate risks and opportunities, focused on
Institutional banking teams in key sectors

Aligning our lending
with the Paris
Agreement goals

To reduce our portfolio emissions, we commit to align our lending with the Paris Agreement goals, including
through two new emissions intensity pathways and targets. We intend to expand this work to more carbon
intensive sectors in future, in line with our Net-Zero Banking Alliance commitment

Financing energy¹
customers

Set expectations for energy customers to commit to and disclose “Paris-aligned” business plans, including:establishing specific, time bound, public transition plans and diversification strategies; reporting transparently
on climate risk and alignment to Paris goals; participating in industry initiatives²; and measuring anddisclosing Scope 3 emissions from supply and value chains

Biodiversity andclimate change

Recognise the link between climate change and biodiversity loss and commit to broaden our engagement with
our largest emitting business customers to include biodiversity

1.
2.

The energy sector includes integrated oil and gas companies involved in exploration, development and refining as well as low carbon energy solutions, thermal coal mining, and integrated power
utility companies such as renewable energy and coal. We will seek “Paris-aligned” business plans for any new customers, and by 2025 for existing customers
For example, in the oil and gas sector, capturing and storing methane in line with the Methane Guiding Principles

16

2021
ESG INVESTOR PACKALIGNING OUR LENDING DECISIONS TO THE PARIS AGREEMENT GOALSALIGNING OUR LENDING DECISIONS TO THE PARIS AGREEMENT GOALSSUPPORTING OUR ENERGY CUSTOMERS TO REDUCE THEIR EMISSIONS• Our success in supporting a net zero transition will be driven by our financing of customers to reduce their emissions• To achieve this, we are:• Focusing our lending and support to energy customers with public Paris-aligned emissions reductions plans• Expanding our investment in low or zero emission technologies• Factoring climate change risk into lending decisions for large business customers, assessing their capacity to respond to climatechange and evolving regulatory landscape• Specifically our Climate Change Commitment sets out that we will:• Support new energy customers which have Paris-aligned business plans• Support existing energy customers, with an expectation by 2025 they:• Establish specific, time bound, public transition plans and diversification strategies• Report transparently on climate risk and alignment to Paris goals• Participate in industry initiatives such as those targeting reductions in methane• Measure and disclose Scope 3 emissions across their value chains

18

FINANCE TO BACK CUSTOMERS REDUCING EMISSIONSTARGETS¹ SET FOR CARBON INTENSIVE SECTORS• We have set emissions intensity reduction targets for large-scale commercial buildings in Australia and global power generation. Thismeans more finance for less emissions• We will progressively expand our coverage of key sectors up to 2024

Large-scale commercial property

Power generation

NEW TARGET:NEW TARGET:

60% emissions intensity reduction by 2030 for major commercial
buildings in Australia owned by our large REIT and funds
customers

50% emissions intensity reduction by 2030
for our global power generation portfolio• We will finance the opportunities for faster and deeper cuts in emissions
presented by: improved energy efficiency; greater electrification of final
energy use; voluntary purchases of green electricity; and self-generationof electricity from solar PV installations• We know decarbonising will require an increase in electricity generation.
The challenge will be to meet that demand growth with clean energy
sources – our new target seeks to meet this by influencing the types ofcustomers and projects we support• Major customers have already committed to achieving net zero emissions
targets by 2030 and are making good progress• Our 2030 target of 129kgCO₂/MWh is a portfolio average. The target is set
against a 2020 baseline of ~260kg CO₂/MWh• Building assets covered by the target represent around 20–25% of our
total exposures to the non-residential building sector• Engagement with power generation customers will be focused on how they
intend to reduce the emissions intensity of power supplied to theircustomers

1.

Both targets measure the portfolio emissions in those sectors on an ‘emissions intensity’ basis. For power generation we calculate the debt-weighted average of our customers’ emissions intensity (kgCO2 per megawatt-hour of electricity generation). For commercial buildings we calculate the emissions from these buildings and divide them by the net lettable area.

19

MORE FINANCE FOR LESS EMISSIONSEMISSIONS INTENSITY TARGETS SET OUR PATHWAYS• Using our two new emissions intensity 2030 targets for our large-scale Australian commercial buildings and global power generation
portfolios, we have defined and disclosed net zero aligned pathways• Our pathways set our strategy and course out to net zero by 2050 and use credible decarbonisation scenarios• The pathways allow us to:• Determine how each sector is performing against a Paris-aligned path
• Better pinpoint and manage customers that may be more exposed to transition risks; and help them to capture the growing
opportunities that come with the transition• Assess the speed and extent to which we are transitioning our exposure to key sectors• Provide transparency about how our financing is aligned with climate scenarios• We will use these pathways to help steer our lending decisions in line with the Paris Agreement goals

20

ALIGNING PORTFOLIO EMISSIONS WITH 2050 PATHWAYSEVERY SECTOR HAS ITS OWN TRANSITION PATH
COMMERCIAL REAL ESTATEPOWER GENERATION

2030

2030

21

BACKING CUSTOMER DECARBONISATIONILLUSTRATIVE EXAMPLES OF CUSTOMER PATHWAYS THAT ALIGN WITH OUR PORTFOLIO TARGETS

Paris-aligned
targets set
their path

COMMERCIAL PROPERTYPOWER GENERATION“Property Company Corp.”“Energy Company Corp.”

In 2020: Disclosed Paris-aligned plans and decarbonisation
strategy
By 2025/2030• Low carbon fuel alternatives for machinery• Require min. NABERS¹ 5-star energy rating on offices• Suppliers to reduce emissions from building materials
By 2040/2050: Reach net zero emissions• All green leases for tenants• Renewable energy tariffs• Zero operational emissions• Phased out diesel and gas

Investment
decisions we
support1.

Company increasingly invests in:• Electric construction plants & equipment• Onsite renewable energy• Battery storage in buildings• Decarbonised heating and cooling infrastructure

National Australian Built Environment Rating System

In 2020: Disclosed science-based GHG emissions intensity
reduction targets• Current emissions intensity 630kg CO₂/MWh
By 2030: Reduce emissions by 50%• Target of 315kg CO₂/MWh

From 2030 to 2040: Reduce emissions a further 50%• Target by 2040 of 158kg CO₂/MWh
By 2050: Achieve net zero emissions

To aid transition, company develops lower-emission base load
alternatives to coal fired generation which is being
progressively retired
Company increasingly invests in:• Large-scale renewables and energy infrastructure• Wind farms, solar farms, and short duration battery storage• Constructing pumped hydro (long duration storage)

22

2021
ESG INVESTOR PACKENGAGING CONSTRUCTIVELY AND TRANSPARENTLY WITH STAKEHOLDERSCUSTOMER ENGAGEMENT TO SUPPORT EMISSIONS REDUCTIONS
100 OF OUR LARGEST EMITTING BUSINESS CUSTOMERS•Now engaged with 100 of our largest emitting business customers, supporting them to establish or strengthen transition plans•

These customers produced more than 150 million tonnes of direct (Scope 1) CO2 emissions during 2019–20 for their Australian-based
operations. This is around 30% of the national total for Australia•

We consider three key elements constitute a robust low carbon transition plan: governance, targets and disclosures (preferably alignedwith the Taskforce on Climate-related Financial Disclosures)•Overall good progress is being made: customers have improved their governance, strategies and targets or disclosures•

Many customers have clearly demonstrated their intention to develop Paris-aligned or science-based targets•

As part of our engagement we expect more customers to make substantive progress towards their targets and improve their plans

Customer transition plans in 2021
were grouped into levels of maturity

100 OF OUR LARGEST EMITTERS – BY CATEGORY¹

(A)

40

ADVANCED% based on Exposure at Default
Manufacturing2

30

1.
2.
3.
4.

(B)

DEVELOPING/INTERMEDIATE(C)UNDERDEVELOPED/STARTING OUT(D)NO PUBLIC PLANS

100 OF OUR LARGEST EMITTERS – BY SECTOR

~25%

20
10
0

~30%

B (2)

Feb-21

Sep-21

C (3)

D (4)

~15%

Electricity Gas & Water Supply
Transport and Storage

~10%
A (1)

Resources (Mining)3Other4~20%• ~60% NZ/INTERNATIONAL• ~40% DOMESTICWe reviewed 87 of our 100 largest emitting business customers in February 2021, and then reached the full 100 in September 2021, grouping each customer into the four categories. The weighted average
has improved from 2.71 to 2.65 in this six month period
Includes steel, aluminium
Includes coal, oil and gas
Includes education, telecommunications, waste management, healthcare facilities and accommodation

24

PROGRESS WITH OUR 100 LARGEST EMITTING BUSINESS CUSTOMERSEXAMPLES OF IMPROVEMENT THROUGH CATEGORIESADVANCED

DEVELOPING / INTERMEDIATEA

UNDERDEVELOPED / STARTING OUT

BNO PUBLIC PLANSC

D

ENERGY COMPANY

DIVERSIFIED INDUSTRIAL COMPANY

LARGE COMMODITIES COMPANY• During our engagement, customer has
moved up from Category B to Category A• Governance: • Targets: • Disclosures: • During our engagement, customer has moved
up from Category C to Category B• Governance: • Targets: • Disclosures: • During our engagement, customer has
moved up from Category D to Category C• Governance: • Targets: • Disclosures: • Customer:• Customer:• Customer:• At a developing / intermediate
category: acknowledgement, welldeveloped plans and actions• At an underdeveloped / starting out
category: acknowledgement, but withlimited plans and/or actions• Public climate change commitment;
climate issues are considered by
Sustainability Management Committeethat report to their Board• Sustainability and climate risk
discussed with Board Risk Committee
at regular intervals; Chairman and
CEO oversee their climate approach• 2030 emissions reductions targets inplace• Has targets to reduce ‘emissions
intensity’ across some of its operations• TCFD-aligned reporting• Reports using the TCFD guidelines,
scope to improve• Strong governance in place to manage
climate risk

• A long-term vision of striving for net
zero by 2050

• Moving towards TCFD-aligned
reporting; has a ‘TCFD index’ in its
reporting• Acknowledges climate risk is amaterial risk and opportunity; haswell-developed plans and actions (byreference to their governance, targets,disclosures, and committed to net zero
emissions by 2050)• Climate resilience is a key pillar of its
sustainability strategy• Public goal of net zero emissions by
2050 across its portfolios

 In place / met In progress

25

2021
ESG INVESTOR PACKNEXT STEPSNEXT STEPS

1) Supporting customers and industries to transition:• To deliver on our Environmental Sustainability Strategy we will invest in building out our existing strengths to capture theopportunities, including in:• Developing new capabilities and products; investing in our people and training; investing in data and technology solutions2) Aligning our lending decisions to the Paris Agreement goals:• Continue setting new targets and disclosing additional sector specific pathways to reduce our portfolio emissions by 2030
3) Reducing our own footprint:• Setting new emissions targets in 2022 for our operations, and working towards our goal of 100% renewable electricity by 2025
4) Engaging constructively and transparently with stakeholders:• Continue supporting 100 of our largest emitting customers to implement / strengthen their low carbon transition plans & enhancetheir efforts to protect biodiversity, by end 2024
• Continue examining ways to integrate transition plan engagement and outcomes into regular customer discussions / assessments
Other areas of focus for 2022 and beyond include:• Aligning with regulatory guidance on climate-related risk governance, including stress-testing of selected portfolios• Extending analysis of flood-related risks to incorporate bushfire and other risks relating to retail customers through our work with
APRA on its Climate Vulnerability Assessment• Further developing an enhanced climate risk management framework that strengthens our governance and anticipates potential
climate-related impacts and associated regulatory requirements

27

2021
ADDITIONAL REFERENCE MATERIALROUNDTABLE
26 NOVEMBER 2021

Australia and New Zealand Banking Group Limited 9/833 Collins Street Docklands Victoria 3008 Australia
ABN 11 005 357 522

MAKING STRONG PROGRESS AGAINST KEY INDICATORS
SNAPSHOT OF OUR ENVIRONMENTAL SUSTAINABILITY PERFORMANCE

Lower emissions
financing target$21.95b
towards $50b target¹

Our sustainablefinance participation
2020

2021

39 deals

81 deals$59b²$119b²Engaged with 100 of
our largest emitting
business customers
88% Governance³
76% Targets³
51%

1.
2.
3.
4.
5.

TCFD-aligned
disclosures³

Governance

ANZ operations

Thermal coal
exposure

25% of our Ethics andResponsible BusinessCommittee agenda is on‘who we bank’4

Scope 1+2 emissions
down 47%
since 2015

Exposure reduced by~75% since 2015
Direct exposure to
renewables +~55%5

Since 2019
Total volume of deals ANZ has participated in
These are the three key elements we consider constitute a robust low carbon transition plan
Includes: Carbon policy, sensitive transactions and industry sector reviews$1,425m project finance commitment to renewable energy as at 30 September 2021 (made only on a non or limited recourse basis to the ultimate sponsors. The figure does not include ANZ lending made to renewable energy
projects that may be funded under corporate debt facilities or through other lending products).

29

KEY BUSINESS AREA INITIATIVESSUPPORTING OUR CLIMATE AMBITIONRETAIL

SMALL & COMMERCIAL BUSINESSESINSTITUTIONAL• Supporting household practices toimprove environmental sustainability,e.g. supported >1,000 NZ
households1 into healthier homes
through our Health Home Loan
Package and our interest-free
insulation loans• ANZ / Clean Energy FinanceCorporation Energy Efficiency
Asset Finance program,incentivising customers to invest inenergy efficient and renewableenergy technologies. FY21 closed
152 deals, worth $39.6m volume• Implementing our Environmental
Sustainability strategy bytargeting priority sectors where we’ll
support customers; and developing
sustainability-focused culture /mindset amongst employees• Developing scenarios for retailmortgages estimating the potential
financial impact of extreme future
weather events; in coming years, willseek to identify geographic areasthat are most exposed• Engaging with the Australian
Bureau of Meteorology annually
to aid customer discussions on
managing variability in rainfall andimpact on farming practices; howcustomers are structuring theirfinances to ensure ongoing viability• Extending analysis of floodrelated risks to incorporate bushfire
and other risks relating to retailcustomers

1.

• Working with 100 of our largest
emitting business customers toencourage their transition, andincluding a focus on biodiversity in
our engagement• Low carbon products and services
within our Institutional businessfocused on climate-related
opportunities

Since October 2020
30

MARKET LEADING POSITIONSUSTAINABLE FINANCE VOLUMES DOUBLED IN FY21
ANZ is recognised asa market leader inAustralia and NZ

Global Sustainable Finance Annual Volume1
USDbn

CAGR ~62%

BEST SUSTAINABLE
FINANCE HOUSE

AUDbn

SLB JPY7bn Dec 20
SLB JPY5.5bn Sep 21

SLB SGD250m Feb 21

SLB AUD1.0bn Jun 21

Sustainability Bond
AUD2.5bn Sep 21

LOANS/ TRADE

2012–2020

TOP 5 CORPORATE BANKIN ASIA

2013–20213

NO.1 OVERALL MARKETPENETRATIONPETER LEE ASSOCIATES RELATIONSHIPBANKING SURVEY AUSTRALIA#1 ESG/ SUSTAINABLE
FINANCE LEADPROVIDER

CAGR ~156%

Global Sustainable Finance market – BNEF data as at 30/09/2021 extrapolated to 31/12/2021
Total volume of deals ANZ has participated in.
No.1 in ’13 and ’15

Green PPP
AUD286m Dec 20

ANZ DEALGROWTH
FY

1.
2.
3.

BONDS

GREENWICH ASSOCIATES ASIAN LARGECORPORATE BANKING STUDYSUSTAINABILITY DEBT
HOUSE OF THE YEARANZ Sustainable Finance Annual Volume2

ANZ has led a range of
landmark transactions in FY21

SLL AUD100m May 21

No. Deals

FY15&16

2

FY17

7

FY18

8

FY19

26

FY20

39

FY21

81

2005–2021

Sustainable Supply
Chain Facility
USD50m Jan 21

SLL USD700m Sep 21

Sustainability Loan
AUD2.2bn Jul 21

NO.1 OVERALL MARKETPENETRATIONPETER LEE ASSOCIATES RELATIONSHIPBANKINGSURVEY NEW ZEALANDSLL AUD1.3bn Aug 21

31

CUSTOMER ENGAGEMENT – FINANCING SUSTAINABILITY

Green, Social, Sustainability andSustainability-Linked Loans
Lending to deploy capital into green, socialand sustainability initiatives, where
borrowers are required to invest in qualifying
green and / or social assets or where loan
terms are linked to improved performanceagainst agreed sustainability targets

ESG-format bonds
Distribution of capital into green, social,transition and sustainability initiatives, e.g.
green buildings, renewable energy or wherebond terms are linked to improved
performance against agreed sustainability
targets

Green and Sustainable Infrastructure
Project FinanceGreenfields project financing to support thedevelopment of long term sustainableinfrastructure

HIGHLIGHT DEAL:HIGHLIGHT DEAL:•

July 2021 – AU$2.2 billion refinance of the
Celsus Royal Adelaide Hospital Public
Private Partnership project financing• First Sustainability Loan Facility for the
global healthcare sector, the financingaligns to the hospital’s social and green
credentials, including its 4 Star Green Star– Healthcare As-Built rating from theGreen Building Council of Australia• ANZ was Mandated Lead Arranger,
Intercreditor Agent and joint Sustainability
Coordinator

HIGHLIGHT DEAL:HIGHLIGHT DEAL:•

February 2021 – Surbana Jurong Private
Limited’s SG$250m ten-year
Sustainability-Linked Bond which ties
sustainability targets to its bond terms,
whereby the issuer has committed to pay
investors a premium of the redemption
amount at maturity if it does not meetthese targets• ANZ was the joint bookrunner and solesustainability coordinator•

September 2021 – AU$1.2bn financing
facility for Powering Australian
Renewables to enable its acquisition of Tilt
Renewables Australia and thedevelopment of greenfield wind farm (RyePark 396MW)• ANZ was Mandated Lead Arranger

32

CUSTOMER ENGAGEMENT – FINANCING SUSTAINABILITY

Corporate Finance Advisory Services for
Renewables

Green Guarantees and Sustainable
Supply Chain

ANZ/Clean Energy Finance Corporation
Energy Efficiency Asset Finance program

Providing advisory services in relation to theTrade facilities supporting green andsustainability initiatives

Financing that incentivises small-to-medium
sized business customers to invest in energy
efficient and renewable energy technologies
that will help reduce their energy costs andcarbon emissions

purchase, sale and raising of capital for renewableenergy projects

HIGHLIGHT DEAL:
In May 2021, ANZ acted as sole Financial
Advisor for J-POWER, one of Japan’s
leading electrical power generation andtransmission companies, providing
detailed valuation and advisory services
for the acquisition of a minority stake in
GNX• The acquisition assisted GNX withfinancing for its AU$750 million, 250MW
Kidston Pumped Storage Hydro Project
located in Queensland.
• The Project will be one of Australia’s firstpumped hydro energy projects and is
expected to create around 500 jobs inNorth Queensland• The Project can provide eight hours ofenergy storage, enough to power 143,000
homes

HIGHLIGHT DEAL:

•

•

•

In January 2021, we provided US$50m in
lending for Nestle’s Sustainable Supply
Chain Finance program. Suppliers for the
Nespresso Coffee line with the Rainforest
Alliance Certified (RAC) rating will receive
margin benefit; if the supplier loses its
RAC rating, pricing will increase by thesame amount•

In July 2021, this program helped
finance five zero emission electric twodoor city buses in NSW totalling approx.
AU$3.81 million. ANZ is also engaged in
the proposal of a further 10 zero
emission full electric buses in QLD,
approx. $8.4 million, to be included inthis program in the coming months

Since its launch in 2017, this program hashelped finance more than AU$225 millionof investment in over 1,000 clean energy
technology deals for our customers

33

OUR RESOURCES PORTFOLIORESOURCES PORTFOLIOTHERMAL COAL MINING EXPOSUREEXPOSURE AT DEFAULT (EAD) $b

EXPOSURE AT DEFAULT (EAD) $b
20.0

2.0

1.7
0.6
1.3
2.9

17.3
16.2
1.2
0.4
1.1
1.7

14.0
0.8
0.3
1.0

15.3
0.7
0.7
0.9

4.0

0.8
0.7
1.0
1.5

1.2

1.2

1.4

4.9

1.5
17.0
0.5
0.8
0.9

5.2

5.4

1.0
14.2
0.5
0.6
1.2
1.1

0.5
13.0
0.4
0.6
1.2
1.0

4.4
3.5

0.0
Sep-15 Sep-16 Sep-17 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21

4.1•

Since 2015 our exposure to thermal coal mining has reduced by~75%•

Several diversified mining customers have divested thermal coalinterests in recent years, or signalled their intention not to invest
in expansionary capex•

ANZ’s exposure to thermal coal mining is a small portion of ouroverall lending (now comprising <0.05% of our Group Exposure
at Default)

3.9

8.6

Sep-15

7.8

Sep-16

Thermal Coal Mining

7.0

7.4

Sep-17

Sep-18

Metallurgical Coal Mining

8.2

Sep-198.2

Sep-20

Other Mining

6.7

Mar-21

5.9

Sep-21Services to mining

Metal Ore Mining

Oil & Gas Extraction

34

DEFINING EMISSIONS INTENSITY PER SECTOROUR TARGETS MEASURE THE CARBON INTENSITY OF OUR SECTOR-SPECIFIC LENDING•

We have used sector-specific emissions intensity¹ metrics rather than absolute emissions² metrics for thedevelopment of our new sectoral targets because we believe it’s the most effective way to track each sector’s
progress and alignment with the Paris Agreement goals•

Emissions intensity metrics³ for banks are typically calculated by adding up all the emissions produced by eachcustomer, using asset and company-level data, and dividing this by a unit of production relevant to that sector•

Methods for each lending portfolio to calculate its overall average carbon intensity:• For power generation, we calculated: the percentage of lending to each customer (EAD), relative to our total
portfolio EAD, and then multiplied this ratio of debt by each customer’s emissions intensity (e.g. their carbon
emissions per megawatt-hour of electricity generated)• For commercial buildings, we calculated: the total emissions produced, divided by each building’s net lettablearea (m²)• This enables us compare our sector-specific customers to industry averages and benchmark against our peers

1.
2.
3.

Emissions intensity refers to volume of emissions per unit of production / unit of economic output
Absolute emissions refers to total quantity of greenhouse gas emissions being emitted
For example, Bank of England’s definition of current carbon intensity: Carbon intensity normalises a firm’s greenhouse gas emissions by its revenues, to capture the volume of emissions it produces for its size,
rather than how large a company it is. This metric is expressed in terms of the volume of carbon dioxide equivalent emissions per million pounds of revenue.
https://www.bankofengland.co.uk/markets/greening-the-corporate-bond-purchase-scheme

35

OUR OPERATIONSCOMMITTED TO MANAGING OUR SCOPE 1 AND 2 EMISSIONSThe COVID-19 pandemic saw ~95% of our non-branch staff working from home, significantly reducing resource
consumption across our property portfolio and consequently reducing our environmental footprint.
GHG emissions - scope 1 & 2 emissions decreased by 47%, tracking ahead of 2025 and 2030 reduction targets•
Business travel-related emissions reduced 91% (due to lockdowns and travel restrictions), avoiding 20,393
tonnes of greenhouse gas (GHG) emissions•
Closed our 111 Parramatta Rd office and relocated employees to energy efficient 242 Pitt St office,avoiding 750 tonnes of GHG annually
Renewable energy - in 2021 our operations were powered by 36% renewable energy•
In Australia, powered by 38,975 MWh of renewable energy from the ANZ Murra Warra Wind Farm turbinesand 255 MWh of renewable energy through on-site solar arrays at ANZ head office in Docklands,
Melbourne and our Melbourne data centres
Water - office water consumption decreased by 63% since 2017•
Water saving valves installed in kitchens and bathrooms in HK; carpet steam cleaning replacedwith low moisture cleaning, saving >75,000L pa at Docklands head office
Waste - waste to landfill has decreased by 65% since 2017•
80 tonnes of waste diverted from landfill during refurbishment in Docklands; new recycling
stations in major Australian offices
Paper - consumption has reduced by 64% since 2015
• Key reasons for continued paper use include internal risk or legislative requirements

36

EXAMPLE CUSTOMER DISCLOSURE TOWARDS LOW CARBON FUTURE
COLES – FOOD, GROCERY AND CONVENIENCE RETAILER
Coles’ ambition is to be “Australia’s most sustainable supermarket”•

In March 2021, Coles announced new targets to accelerate climate action and reduce greenhouse gas emissions. These included committing:• to deliver net-zero greenhouse gas emissions by 2050;• for the entire Coles Group to be powered by 100% renewable electricity by the end of FY25; and• to reduce combined Scope 1 and 2 greenhouse gas emissions by more than 75 per cent by the end of FY30 (from a FY20 baseline)•

As detailed in its Climate Position Statement, Coles acknowledges its responsibility to minimise its environmental footprint, and mitigate the environmental and social
impacts of climate change. It will do this by:•“building the resilience of our business, supply chain and community against climate change related impacts, both physical and transitional (managing climaterelated risks and opportunities)”;• “building a roadmap aligned with the Paris Agreement and taking action to reduce our climate impacts (decarbonisation)”; and• “using our position and voice to play a constructive role in influencing others to meet similar goals (influencing climate action)”

•

•

•

Coles’ $1.3bn in Sustainability-Linked Loans (SLL)
is the largest retail SLL to date in Australia. In Aug-2021, ANZ worked asa Joint Sustainability Coordinator on the SLL
Coles recently launched its Sustainability Strategy
under the focus areas of Together to Zero and Better Together whichsets out how Coles will work with its stakeholders to drive change andcreate a more sustainable future for generations of Australians ahead
ANZ has banked Coles since its demerger from Wesfarmers,
and is actively working with Coles to support it on its transition journey•“General Corporate Purposes” loan with pricing discount and premium triggers forachieving/missing agreed Sustainability Performance Targets (SPTs)•

SPTs are connected to Key Performance Indicators (KPIs) which align with Coles’
corporate sustainability targets. KPIs include:• Emissions: Scope 1 & 2 GHG emissions reduction in line with its corporate
target of reducing emissions by 75% by 2030
• Waste: Increase total waste diversion from landfill in line with its Together tozero waste strategy• Women in Leadership: Increase % of women in leadership positions in linewith its Better Together strategy

37

EXAMPLE CUSTOMER DISCLOSURE TOWARDS LOW CARBON FUTURE
COLES – FOOD, GROCERY AND CONVENIENCE RETAILER

Coles’ sustainability strategy
Sustainability strategy

Initiatives

Together to zero emissions••

Coles, in 2019, was the first major Australian retailer to announce a power purchase agreement for renewable energy
In March 2021, it announced its target to be powered by 100% renewable electricity by the end of FY25, and now has all
the agreements in place to meet this target, once the agreements are live

Together to zero waste

•
•
•
•

Diverted 80.6% of solid waste from landfill (as of end of FY21)
Stopped delivering paper catalogues to customers’ letterboxes
No longer selling single use plastic tableware products
No longer giving away plastic collectable toys

Together to zero hunger•

Donated the equivalent of >160 million meals to SecondBite since 2011

A team that is better together••

Percentage of women in leadership increased to 36.5% in FY21
Recognised as Gold Employer in 2021 Australian Workplace Equality LGBTQ Inclusion Award

A community that is better together••

Raising $40 million, since 2013, for children’s cancer charity, Redkite
Reached a new single event record in fundraising of more than $6.7 million for FightMND•

All Coles Own Brand seafood has been responsibly sourced since 2015. This includes fresh, thawed, frozen and canned
seafood and food products that contain seafood as a primary ingredient
Coles uses independent and internationally recognised certification and verification programs that support ethicalpractices and environmental protection in these supply chains

Sourcing that is better together••
Farming that is better together•$50m ‘Coles Nurture Fund’ – aimed at working with suppliers on innovation projects, including building supply chain
resilience through climate adaptation programs to mitigate impact of drought
Australian-first sourcing policy to provide customers with quality Australian-grown fresh produce as a first priority

38

BIODIVERSITYEXPANDING THE SCOPE OF OUR CUSTOMER ENGAGEMENT TO INCLUDE BIODIVERSITY FOCUS•

There is a link between climate change and biodiversity loss and we acknowledge the need to protect and restore ecosystems andmitigate biodiversity loss, including working to halt and reverse forest loss and land degradation•

We also understand the impacts – positive and negative – our customers can have on biodiversity•

We are:•Broadening our engagement with our largest emitting customers to include a focus on biodiversity•
Encouraging these customers to establish or strengthen their approach to biodiversity through effective board governance,
policies and strategies and disclosures•
Collaborating with industry groups and customers to identify investment opportunities in improved biodiversity or natural capitaloutcomes with commercial benefits•

Biodiversity is integrated into our Social and Environmental Risk Policy•

ANZ has joined the Taskforce on Nature-related Financial Disclosures (TNFD) forum

CASE STUDY: Through the Foundation for Regional & Rural Renewal (FRRR), Seeds
of Renewal aims to help build sustainable communities in regional Australia•

This year, the Karrkad-Kanjdji Trust received a $15,000 grant from ANZ to help protect
local biodiversity by monitoring vulnerable habitats in Arnhem Land

• The project funded a network of cameras to study the djabbo (northern quoll) in order tounderstand the impact of the Trust’s land management practices and programs on thispriority mammal species

39

ESG GOVERNANCE

BOARD OF DIRECTORSPaul O'Sullivan, Chairman

Audit
Committee

Risk
Committee

Ethics, Environment,
Social and Governance(EESG) Committee

Digital Business
And Technology
Committee

Human
Resources
Committee

Nomination and
Board Operations
Committee

Chair:
Paula Dwyer

Chair:
Graeme Liebelt

Chair:Paul O’Sullivan

Chair:
Jane Halton

Chair:
Ilana Atlas

Chair:Paul O’Sullivan

Ethics and Responsible BusinessCommittee (ERBC)

Customer Resolution
Portfolio

Risk Governance OversightCommittee

Accountable to the Board EESG Committee.
Chaired by CEO

Reports to Group Executive Australia Retailand Commercial

Chaired by CRO
Accountable to the Board

A leadership and decision making body thatexists to advance ANZ’s purpose. It
generally meets five times per year. It iscomprised of senior executives frombusiness divisions and Group functions

Brings together our existing complaint
management teams to oversee ANZ’s fairtreatment of customers, including internaland external dispute resolution, customer
advocacy, customer vulnerability and how
we identify and manage systemic issues

A leadership and decision making body thatexists to oversee ANZ’s response to theself-assessment of governance, culture andaccountability. It is comprised of Group
Executives from business divisions andGroup functions.
Reports to the Board

40

BOARD AND EXECUTIVE COMMITTEES WORK TOGETHER
INDICATIVE RESPONSIBILITIES DEMONSTRATE HOW COMMITTEES MANAGE ESG

Ethics, Environment, Social and Governance Board
Committee

Ethics and Responsible Business Management Committee

Purpose: oversee measures to advance ANZ’s purpose, focusing on
ethical, environmental, social and governance matters

Purpose: Operationalise Board objectives and make decisions on
issues and policies

Review and monitor ethical and
ESG risks and opportunities

Discuss and decide on ethical and
ESG risks and opportunities

Establish decision-making principles
and guide choices on industry
sectors, customers and transactions
we bank and how we bankOversight and approval of ANZ’s
corporate sustainability objectives

Oversight and approval of corporate
governance policies and principles

Review the adequacy, effectivenessand fairness of ANZ’s approach tocustomers experiencing
vulnerability

Monitor progress against ANZ’ssustainability priorities including
ESG targets and the ‘What We Care
About Most’ agenda

Oversight and approval of ESG
reportingOversight of elements ofWhistleblowing, including the policy
and the ANZ Code of Conduct

Brand and values are aligned withour community investment,
strategic partnerships andcorporate sponsorships

Review and decide sensitive
wholesale transactions

Oversight of the Ethics andResponsible Business Committee

41

BOARD ETHICS, ENVIRONMENT, SOCIAL AND GOVERNANCE COMMITTEE (EESG)
INDICATIVE AGENDA AND TOPICS COVERED, GENERALLY MEETS FOUR TIMES A YEAR

Our priority areas• Housing• Financial wellbeing• Environmental sustainability

How we bank
• Customer vulnerability strategy, including
accessibility• Customer fairness• Product suitability• Conduct• Reconciliation Action Plan

33%

8%
How we measure and communicate• Annual reporting suite, inc. ESG reporting• Setting and monitoring ESG targets• ESG external assurance• External assessments / reputational indicators

6%

Who we bank
• Carbon policy, transition plans forlargest emitting customers• Human Rights policy• Approach to emerging social issues,e.g. modern slavery, animal welfare

24%

29%

Governance• Materiality Assessment• Company Secretary reporting, inc. policy review,shareholding details, directorships• Committee forward agenda• Review of Ethics and Responsible Business Committee
minutes• Review of good ESG governance practices

ESG topics discussed by full Board or other Board sub-committees•

Employment conditions, inc. remuneration policy
and practices•

Financial crime, inc. Anti-Money
Laundering/Counter-Terrorism Financing•

Customer Remediation•

Cybersecurity•

Regulator enforcement activity

42

ETHICS AND RESPONSIBLE BUSINESS MANAGEMENT COMMITTEE (ERBC)
INDICATIVE AGENDA AND TOPICS COVERED, GENERALLY MEETS FIVE TIMES A YEAR

Our priority areas• Housing• Financial wellbeing• Environmental sustainability

How we bank
• Customers experiencing vulnerability• Product suitability• Accessibility and diversity• Changing community standards• COVID-19 Statement of Intent

34%

16%

How we measure and communicate• ESG targets – reviewing and monitoring• ESG reporting• Community sentiment ratings

Governance• Materiality Assessment• Social and Environmental Risk policy• Governance framework for external ESG
commitments• Good practices for ESG Committees

6%19%
Who we bank
• Industry sector & country specific reviews• Human rights policy and Modern Slavery• Carbon policy• Sensitive wholesale transactions

25%

ESG topics discussed by full Board or other Board sub-committees•

Chair: CEO•

GGM, Corporate Affairs•

GGM, Group Strategy•

Customer Advocate,
Australia•

GM Credit, Specialised Lending andHead of Social and Environmental Risk•

Group Executive,
Institutional•

Portfolio Lead, Home
Owners, Australia•

MD, Commercial Banking,Australia•

MD, Retail & BusinessBanking, New Zealand•

Regional Executive, PacificThird-party Advisor: Simon Longstaff, Executive Director, The Ethics Centre
43

OUR ESG RELATED DISCLOSURESESG Supplement

ESG information &progress against
our ESG targets
https://www.anz.com/shareho
lder/centre/reporting/sus
tainability/

ESG Briefing

Annual event tobrief investors
on ESG matters
https://www.anz.com/content/dam/anzcom/sharehold
er/ESG-Investorpresentation.pdf

Climate Change

Human Rights

Housing

Financial Wellbeing

Update on Climate
Change related
disclosures

Our approach tohuman rights

ANZ-CoreLogic Housing
Affordability Report, thepre-eminent guide to trends& drivers of housing
affordability across Australia

Our financial
wellbeing programs,
including ANZ Roy
Morgan financial
wellbeing indicator

https://www.anz.com.au/about-us/esgpriorities/environmentalsustainability/climatechange/

https://www.anz.com.au/about-us/esg-priorities/fairresponsiblebanking/human-rights/

https://www.anz.com.au/about-us/esgpriorities/housing/https://www.anz.com.au/about-us/esgpriorities/financialwellbeing/

44

FURTHER INFORMATION

https://www.anz.com/shareholder/centre/
Equity Investors

Jill Campbell

Group General Manager
Investor Relations+61 3 8654 7749
+61 412 047 448
jill.campbell@anz.com

Cameron Davis

Executive Manager
Investor Relations+61 3 8654 7716
+61 421 613 819
cameron.davis@anz.com

Harsh Vardhan

Senior Manager
Investor Relations+61 3 8655 0878
+61 466 848 027
harsh.vardhan@anz.com

Retail Investors

Debt Investors

Michelle Weerakoon

Scott Gifford

Manager
Shareholder Services & Events+61 3 8654 7682
+61 411 143 090
michelle.weerakoon@anz.com

Head of Debt
Investor Relations+61 3 8655 5683
+61 434 076 876
scott.gifford@anz.com

45