ANZ ESG INVESTOR RONDTABLE – LONDON
31 May 2022
OVERVIEW
Investor roundtable hosted by ANZ Group Executive Institutional, Mark Whelan, ANZ Chief Risk Officer,
Kevin Corbally and ANZ Group General Manager ESG, Gerard Brown.
The roundtable, hosted via telephone conference, provided an opportunity to discuss and expand on
ANZ's approach to aligning with net zero by 2050, including ANZ’s customer engagement to financelower emissions.
TRANSCRIPTION – ABRIDGED VERSION

Gerard Brown:

Thank you. Good morning everyone. This is Gerard Brown speaking and with
me is the Head of Institutional, Mark Whelan, and the CRO Kevin Corbally.
I'll make some brief remarks and then we'll pass to Mark and then Kevin andthen we'll go to Q&A.
Firstly, I'd like to reference our disclosures from 26 November last year
when we spoke to our environmental sustainability strategy and our climatechange commitment. Today we wanted to give Northern Hemisphere
shareholders in particular the opportunity to speak with us about that. Ourparticular focus is on an update on the strategies rollout, how we're
supporting our customers and industries in the transition, and how we'realigning our lending decisions to Paris Agreement.
With those remarks I'll hand over to Mark.

Mark Whelan:

Thanks Gerard … I wanted to cover effectively just three areas.
First of all, the governance structure that we have in place to develop,
monitor and action our climate actions with our customers and within the
Bank.
The second… to give you some updates on the progress that we've madewhich are against some key indicators so you can see what we're doing andthe results that we're getting.
Then finally, I thought I'd touch on our partnership with Pollination which weannounced a little bit earlier in the year.
Now I would say at the beginning the approach that we're taking withregards to climate, we see significant opportunities. We know there's anumber of risks and challenges with regards to the transition that we're allfacing, but we see more opportunities in addressing those risks and working

ANZ ESG INVESTOR RONDTABLE – LONDON
31 May 2022with our customers which is effectively the attitude that we're taking within
the Bank. We've structured ourselves internally to ensure that we haveappropriate governance, development of our strategy, execution of thatstrategy, and overall oversight and governance from the Board. I will justrun you through briefly how we've done that.
First [we have] a subcommittee of the Board that's been formed, which is
our EESG committee. That's chaired by Paul O'Sullivan. It's effectively there
to oversee the strategy and approve the strategy, monitor our performanceagainst that and challenge us based on what we're seeing in the market andany changes that we're seeing in this pretty fast-moving area. We report up
to the Board in each Board meeting and each subcommittee Board meeting.
The second area that we have that we've formed internally is our ethics andresponsible business committee. Now that's chaired by Shayne [Elliott]. It's
got a broader remit than the EESG committee, and it's effectively focused onthings like reputation, our business practices across all parts of thebusiness, things like responsible banking, sensitive sectors, and reputational
issues, and picks up elements of what we're doing with regards to climate. A
number of deals may go to that committee for review post our
implementation to ensure that we're meeting our requirements and external
disclosures, et cetera, and if there's any sensitive transaction we refer thatup to that committee.
The third area is our climate and advisory forum… I chair that and it's moreof an execution forum. We've established our disclosures, our policies, ourstrategies, and this particular forum is around ensuring that we're executing
to them and growing and supporting our customers but also looking at thoseopportunities.
Now this is a Group-wide focus, it's not just Institutional, and has reps fromall business divisions across the Bank, and geographic areas. It's
represented by Risk, so Kevin Corbally sits on that, corporate affairs with
Gerard Brown sitting on it, strategy and also communications. We meetmonthly and effectively set targets and disclosures.
We review products, where we are with our products and development,
review our customer impacts that we're having with the top 100 emittersand the progress with that particularly, but also a number of customers arecoming to us so we'll refer to the activities we have with those that sit

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31 May 2022
outside the top 100. Any market and regulatory changes that we're seeingthat we need to be aligned to, and also progress on our investment
approach.
The other key area that we monitor within this committee is our training andeducation of our staff and implementations of our policies throughout the
Bank so that we're ensuring that our decisions are aligned with ourcommitments externally. This is very effective in keeping the Group
informed, but more importantly, coordinating activities right across theGroup and we find it a very effective committee.
Where are with our progress? I'll concentrate on six areas which reflect the
key indicators we're monitoring and how we're progressing and give you an
update on that.
We made a $50 billion low emission target commitment back in 2019. We
are progressing very well against that to 2025 was the expected end date.
At the end of September last year we were about $22 billion of that target;
we think that's now in this first half we would have put on about another $6
billion against that so it looks about $28 billion. My full expectation is that
we'll hit that 2025 target between 12 and 18 months ahead of schedule. The
volume of transactions that we're seeing that meet the criteria here are stillquite strong.
To give you an example of that, the second thing that we do monitor is oursustainable finance market participation, so how are we going vis-à-vis what
we're seeing in the marketplace. In 2020… we've participated in 39 deals
with total volumes of about $59 billion. In 2021, we did 81 deals… that
represented $119 billion in transactions. If you look at it on a global scale,we think we're around about 4% to 5% of global market activity
participating in it, so we're quite happy with our position.
Third area has been our engagement with our 100 emitters…we've engaged
with all of the 100 emitters over the last two years, even despite the COVID
situation we all found ourselves in, and we've now had multiple interactions
with each of them, so that's progressed very well.
We look at what they are doing in three areas: their governance they havethemselves, the disclosures that they're making to the market, and how
they're going against their targets. We measure their ability to meet each ofthese and where they are via an ABCD sort of classification. Now, 88% of

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31 May 2022
that 100 now have governance in place, 51% have disclosures, and 76%
have specific targets so there's still some way to go but we're certainly
seeing it move in the right direction and we measure this on a quarterly
basis.
Fourth area is governance. 25% of what we see going through the ERBC
agenda, the second forum I mentioned, is on who we bank and why webank, which obviously picks up the climate initiative, and there's obviously
other things that are measured there but we would expect that number tobe holding around that area as climate remains a specific focus of us as aGroup.
The fifth area is Scope 1 and 2 emissions and we see that for the Bank hascome down about 47% since 2015, so we have good momentum there, andthen finally in our thermal coal exposures which are down significantly overthe course of the last six years where it's now at a very minimal amount of
our overall portfolio. We also measure the direct exposures we have torenewables, which is up about 45% over that period.
The final thing before I pass to Kevin is around our partnership with
Pollination. We're very excited about this. We made an equity investment inthis organisation and we also have entered into an MOU with them aroundhow we will work with them cooperatively on specific transactions and areas
where we may not. Pollination you will know have a very strong advisory
capability. They are active in funds both in a joint venture but also
standalone funds within Pollination and they also have the ability with thecustomer basically working with - to being involved in some transactions
which will feed the funds, but also obviously have banking opportunities.
In dealing with and looking at Pollination, we felt what they had was first of
all a very strong culture aligned to the way that we were approaching this,which we felt was very important as we do with any particular partner, but
secondly, their skillset was highly complementary to what ANZ had. While
we have a small advisory function that works more into our corporate area,
Pollination deal with the largest companies around the world and we felt thatworking with them as they work with their customers to develop strategies,
we can be a recipient in delivering product and also lending et cetera thatwill support the transition.

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31 May 2022
So we’re very excited about this, we’ve already identified about eightopportunities with them that are underway, and we’ve already identified
around 28 strategic clients that we think that we can do significant workwith. So, that’s in its early days so we’re expecting big things from thepollination partnership which will obviously support our approach to climate
and the transition. I’ll finish there and pass to you, Kevin.
Kevin Corbally:

Thanks Mark, I thought it might be helpful to provide a little bit of an updatefrom our last disclosures last November in terms of some recent regulatory
developments both in Australia and in New Zealand.
I might start with New Zealand where some of you may be aware that in
December of last year a law was passed such that New Zealand became thefirst country in the world to make climate reporting mandatory for large
publicly listed companies, for banks, for asset managers and also for
insurers. Really the reporting is around governance, risk management andstrategies for mitigating climate change impacts, pretty much in line with
the TCFD and would commence for most companies, or in our case anyway
in terms of financial year 2024.
Turning then to Australia, a couple of recent developments.
One was that APRA, the prudential regulator, undertook itself - asked arange of banks, the 21 largest banks in Australia, to complete a selfassessment survey on governance of climate risk. The report on that is dueout we believe in July from APRA in terms of the findings.
Secondly, APRA, and in fact I signed off literally the day that I left to comehere, asked the five major banks to complete what it called a climate
vulnerability assessment which was an exploratory exercise investigating
both physical and transition risk of climate change. Probably somewhat
similar to what some of you may be familiar here that the Bank of Englandundertook an exercise which was the Climate Biannual Exploratory Scenario,
so CBES that the Bank of England launched last week, and I think there’s areport in the last week or so in terms of the findings of that…But in APRA’scontext, what we had was a couple of elements of it. One was a climate
scenario analysis using two scenarios and they’re both from the Network forGreening the Financial System, so the NGFS. The first one was a hot house
world which basically saw no action from governments around the world andthat global temperatures would exceed three degrees above pre-industrial

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31 May 2022
levels, and that resulted obviously in some serious environmental impacts,
extreme weather events, destroyed ecosystems, increasing sea levels…
Then the second piece was a delayed transition scenario where the policy
measures are effectively delayed until 2030 and then implemented in a way
to get to net zero emissions by 2050, and ultimately global warming underthat scenario would see temperatures increase by 1.8 degrees by 2050.
Then the second component of what they did or asked the banks tocomplete was a counterparty assessment where we were asked toundertake a detailed qualitative and quantitative assessment of a sample of
25 counterparties who were selected based on the materiality of the
exposure in their industry classification.
As I said, I literally signed that off before I left to come here, so we believe
APRA’s looking right now at the results from all of the banks who
participated in that exercise, and I have no doubt they’ll look to publish thefindings in the coming months. So, that was all I just wanted to update froma regulatory perspective.
Gerard, can I just hand back to you and I think we’re going to go to somequestions….
Gerard Brown:… To kick things off I’ll speak a little bit more about the top 100 emitter
engagement program, which historically at least we’ve had quite a deal ofinterest in. Mark’s touched on it already.
As mentioned, a number of these companies would be on possibly their thirdor fourth cycle of engagement with us in relation to this program. Really
what we’re looking for there as the disclosed material indicated last year andin particular on slides 24 and 25 [ESG investor pack, Roundtable, 26
November 2021] are a number of elements.
Very important to us is governance, so as Mark outlined our own climatechange governance arrangements, what governance arrangements are inplace at a particular customer in relation to their climate change responseplans. In relation to the plans themselves, we look for plans that are
credible, specific and timebound with medium-term and long-term targets.
Also, we look to their disclosure, the substance and robustness of thedisclosure and which forum, which governance forums within theorganisation signs off on those disclosures.

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31 May 2022
As the material we disclosed at the end of last year indicates on slide 25[ESG investor pack, Roundtable, 26 November 2021], we do grade thecompany’s concern which overall those companies account for about 30% ofAustralia’s national emissions. As you can see in the material, we’ve
provided some examples there of what we will regard as good practice andwe set out here an energy company which has got specific plans,
acknowledges climate risk, that climate resilience is a key part of its
sustainability strategy. It’s got public goals, it’s got TCFD aligned report itand strong governance.
As Mark referenced, we’re seeing companies move up the continuum from D
towards A. We have in the past had questions about what do we do if wehave a customer who for argument sake has been sitting at C for several
years? We would continue to engage with that company and try to assist in
the development of their approach and thinking.
But then obviously over time if they didn’t further mature with theirapproach, then we’d need to have further discussions with the companies
concerned. So, that’s just trying to bring that aspect of it alive a little bit.
People might be interested to know that regulators are particularlyinterested in this aspect of our work, and they engage with us quite closely
about it. They see it as making an important and credible contribution to thetransition of the Australian economy in particular and no doubt, as Kevincontinues to engage with our regulators on these issues, this work willcontinue to be an important part of that.
Participant question… I have two questions, the first one is what is your percentage exposure inyour loan book toward the oil and gas industry and are you actively working
to reduce this exposure? My second question is, are there any activities thatyou exclude from your loan book? For example being new oil and gas sales…
or other activities? Thank you.

Gerard Brown:

This is Gerard speaking and I’ll deal with the latter in relation to how do wethink about oil and gas customers, future plans?
Our engagement with the oil and gas customers, the centre of gravity inrelation to that is their climate transition plans. We’re looking for theelements that I touched on earlier. If they were considering new
developments, we would look at that through the lens of their transition
plans and how were they proposing to manage the issues that would arise

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31 May 2022
as a result of that. To date, those specific issues haven’t arisen as yet, they
may in the future but that should give you a good sense of the lens throughwhich we would look at that.
In relation to the exposures questions, I’ll just hand over to Kevin.
Kevin Corbally:… thank you for the question. In terms of the size of our exposure relative
to the size of our loan book, it is approximately 0.8% of our loan book.

Participant question:

Hi, thank you and thank you for that broad overview of the areas you’re
working on. I’m interested in the progress you’re making with the hundred
biggest emitters and particularly in fact what sort of challenges and what
are the largest challenges you face in terms of engaging these people in thisjourney?

Mark Whelan:… Mark Whelan here. It’s actually been a bit of a journey, we’ve been
engaging with top 100 emitters now for well over two, three years and it’sfair to say I think in the initial discussions that we had with them, there wasa little bit of questioning about why we were there in some circumstances.
The approach that we’d taken was that we weren’t there to tell them what
to do, we were there and seeking to understand the approach and theattitude that they had to climate change and their position on that from theBoard down and the way that they were positioning for that.
Many discussions, some were difficult, I have to say, others were we would
discover that the companies were very engaged in determining what theyneeded to do to support transition and for climate change. So, it was quite
varied, I think over the course of the two to three years the discussions
have matured a lot, there’s more structure to the discussions. Those areasthat I talked to around looking at disclosures and targets, setting thempublicly, meeting them, have basically formed the basis of our discussions
with them, so we can see what have they committed to, how are theyactioning that and what the progress is.
So, I think the discussions have matured now, of the top 100 I think as you
can see through the slide that Gerard referenced, there was still 20 odd or
20% that had not necessarily started the journey as well as we had thought.
Since then I think some have moved up into category C. It’s an evolution I
suppose that we’re seeing and the pace that we’re seeing particularly withour bigger emitters, I think’s moved to a whole new level in the last 18
months. So, I wouldn’t see it necessarily as a challenge now about getting

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31 May 2022
the discussions occurring, it’s more now getting the pace to move to areasthat we feel are appropriate with the 2050. But they're much more fulsome
discussions, to be frank, and significantly, more mature than I would say
happened at the beginning.
Participant question

Just a follow-up question, if I may? So, have you got to a stage where you
haven't been able to move a company forward, or come to an agreementwith them? If that's the case, what action do you take?

Mark Whelan:

Yes, we have, in one particular sector, and when that's occurred, we've
agreed what our transition to exit would be, and we've actioned that...
We have exited some relationships when we've felt that they’ve notengaged, and they'd had no real commitment. Then when that happens, weusually add someone else on, so we keep the 100 emitter whole.

Participant question:

Thank you for arranging the call. Can I just ask, have your transition plans,or the transition plan of your customers changed? I know it hasn’t beenlong, but has it changed since the election of this new government? I guessa more progressive government when it comes to climate transition? What
are your thoughts on what the medium term looks like under this new
government, please? Thank you.

Gerard Brown:

This is Gerard speaking. It's a little bit difficult to tell, at this stage. You're
probably aware that the then opposition’s platform was more thematic thanspecific, and they have some decisions that need to be made in relation to
how are they going to proceed with the national target and a range of
supporting initiatives? There's quite a bit of water to pass under the bridgein relation to that.
Another factor, as I'm sure you're aware, is that the upper house inAustralia, the Senate, will be controlled by the Greens Party, and I'm surethe incoming government is probably recalibrating their plans in that
context. We'd anticipate that between now and the end of the calendar year
we'll get a firmer view of how specifically they intend to pursue the broad
themes that they've set out in their election campaign.
So, the short answer to that is, it's too early to tell.

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Gerard Brown:

It almost goes without saying that subsequent to the call, which Cameron
Davis, from our investor relations team is listening in on, very happy to takefollow-up questions…
Well, thank you. Everyone for your interest, and again, repeat the offer, if
you’ve got follow-up queries, don’t hesitate to get in touch.
I should also mention that in the first half of September we'll be conducting
a broader ESG market briefing, as we have done for the last several years,
and obviously, today's subject matter will be an important part of that, andCameron Davis and our investor relations team will be in touch about that indue course.
So, thank you again, everyone. Appreciate you giving us some time thismorning. Thank you.
[END OF TRANSCRIPT – ABRIDGED VERSION]