2023

ANZ SOCIAL AND ENVIRONMENTALSUSTAINABILITY TARGETMETHODOLOGY2

ANZ Social and Environmental Sustainability Target Methodology 2023

OVERVIEW OF THE ANZ SOCIAL AND
ENVIRONMENTAL SUSTAINABILITY TARGETANZ1 commenced a new social andenvironmental sustainability target on
1 April 2023, committing to fund andfacilitate at least $100 billion in socialand environmental outcomes throughcustomer activities and direct investments
by ANZ (referred to in this document as‘eligible transactions’).
The $100 billion social and environmental
sustainability target (‘the target’) is aligned to ANZ’s
purpose, supports the United Nations Sustainable
Development Goals (SDGs)2 and is consistent with
our role as a founding signatory to the United
Nations Principles of Responsible Banking.
Monetary amounts in this document are reported
in Australian dollars, unless otherwise stated.
This target methodology (‘the Methodology’)should be read with the Disclaimer & Important
Notices set out at the end of this document.
Table 1 sets out the evolution of ANZ’s targets
which began in 2015. All targets began at zeroand for prior targets, the target timeframe refers
to the actual duration of the target, rather than
the announced duration.

TABLE 1

TargetSupport transition to a low carbon economy
Facilitate at least $10 billion in investment by 2020
in low carbon and sustainable solutions, including
renewable energy generation, green buildings
and less emissions intensive manufacturing
and transport.

Target Amount

Target Timeframe$10 billion(expanded to $15 billion)

1 October 2015 to
30 September 2019

Fund and facilitate at least $100 billion by 2030
in social and environmental outcomes throughcustomer activities and direct investments by ANZ.

This Methodology outlines ANZ's approach
for assessing the eligibility of transactions forinclusion in the target, and reporting on progress
towards the target across the following areas:

1. Determining eligibility

a. Eligible banking activities, assessmentand measurement: Banking activities that
contribute to the target, including funding
and facilitation of customer financing, andANZ’s own direct investments, and$50 billion

Fund and facilitate at least $50 billion4 by 30
September 2025 towards sustainable solutions
for our customers, including initiatives that help
improve environmental sustainability, support
disaster resilience, increase access to affordable
housing and promote financial wellbeing.
Social and environmental sustainability target

Overview

1. Determining eligibility through:The target amount increased in 2018 to $15 billion3
while retaining the same five-year timeframe.
Sustainable solutions

Purpose of this Methodology

1 October 2019 to
31 March 2023

b. Eligible social and/or environmental
activities: The eligible social and/or
environmental activities that contribute to
the target, and their alignment with the SDGs.
2. Governance and reporting processes within
ANZ to verify the eligibility of transactions and tomonitor and report progress towards the target.

$100 billion

1 April 2023 to
30 September 2030

The target includes initiatives that help lower
carbon emissions, protect nature and biodiversity,
increase access to affordable housing and promote
financial wellbeing.

1. In this Methodology “ANZ” refers to ANZ Group Holdings Limited (ABN 16 659 510 791) and its subsidiaries. 2. On 1 January 2016, the SDGs came into effect. The 17 goals and 169 targets are aimed at solving the world’s most pressing challenges by 2030. 3. ANZ surpassed the target of $15 billion during
2019, reaching over $19 billion by 30 September 2019. 4. The $50 billion sustainable solutions target was on track to be met in advance of the announced target date of 2025, having reached a balance of almost $47 billion as of 31 March 2023.

2. Eligible banking activities,
assessment and measurement
3. Eligible social and/or
environmental activities
4. Governance and reporting
Disclaimer & Important Notices

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ANZ Social and Environmental Sustainability Target Methodology 2023

1. DETERMINING ELIGIBILITY
A transaction is eligible for inclusion in
ANZ’s target if it meets the requirements for:FIGURE 1• eligible banking activities, and• eligible social and/or
environmental activities.
Figure 1 provides an overview of how ANZ
determines if a customer transaction is eligible
for inclusion towards the target.

ANZ BUSINESS IDENTIFIES TRANSACTION FOR POTENTIAL INCLUSIONLABELLED SUSTAINABLE FINANCE

Eligible banking
activities

Sustainability-Linked
Transactions where
pricing is linked tosustainability
performance targets

ANZ direct investments are subject to the same
review and governance processes depicted in
Figure 1.
Eligiblesocial and/or
environmental
activities

Governance andreporting

OTHER TRANSACTIONS (UNLABELLED)

Activities which contribute to one or more of the 17 UN SDGs

1. Determining eligibility
2. Eligible banking activities,
assessment and measurement

Use of proceeds
Labelled sustainable financetransactions where proceeds
are required to be used tofund qualifying green and/or
social assets

Overview

Customer transactions funded or facilitatedby ANZ through its eligible banking activities

3. Eligible social and/or
environmental activities
4. Governance and reporting
Disclaimer & Important Notices

Activities align to at least one of the Eligible Categories
as defined in the ANZ SDG Bond Framework

Decision on transaction eligibility and inclusion by target forum

External reporting of progress against target

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ANZ Social and Environmental Sustainability Target Methodology 2023

2. ELIGIBLE BANKING ACTIVITIES, ASSESSMENT AND MEASUREMENT
A transaction will be an eligible banking
activity if:• it is an activity described in section
2.1, and• it is assessed as eligible in accordancewith section 2.2
The amount attributed to the eligible banking
activity for inclusion towards the target isdetermined in accordance with section 2.2.
Eligible banking activities are assessed against
ANZ’s internal standards, policies and guidelines,
as applicable.

2.1 Activities

2.2 Assessment and measurement

Overview

ANZ banking activities covered by the target
fall under the following categories:

Assessment

1. Determining eligibility

1. Customer Transactions:a. Funding – where ANZ has extended
committed limits to customers for lending,
trade and markets products requiring acredit decision and capital allocation.
b. Facilitation – where ANZ has advised,
structured, underwritten, coordinatedor distributed in relation to a customer’s
capital raising (e.g. bonds, loans, equity).
2.	
ANZ Direct Investments including green,social, sustainability and sustainability-linked(GSSS) bond purchases held on balance sheet
and equity investments held on balance sheet.
Customer transactions incorporate labelledsustainable finance products and unlabelled social
and/or environmental sustainability activities.
The eligibility of ANZ direct investments towards
the target is determined by the nature of theindividual investment and the underlying social
and/or environmental activity e.g. inclusionof labelled bond purchases would follow thelabelled sustainable finance pathway in Figure 1.

The target includes funding, facilitation anddirect investments by ANZ since 1 April 2023
above a threshold of $1 million.
ANZ’s internal specialist teams determine whether
a transaction qualifies as a labelled sustainablefinance transaction for the purposes ofthe Methodology.

2. Eligible banking activities,
assessment and measurement
3. Eligible social and/or
environmental activities
4. Governance and reporting• For ‘use of proceeds’ transactions, we consider
whether the proceeds are for financing
qualifying green, and/or social projects,
assets or business activities.
• For sustainability-linked transactions where
pricing is linked to sustainability performancetargets, we consider the level of ambition andthe materiality of the targets to the customer’ssustainability strategy.
• For both categories we:– assess whether the transaction adheres
to ANZ’s internal standards, policies andguidelines, as applicable;– draw from recognised market guidelines
or principles where applicable, such as the
Asia Pacific Loan Market Association (APLMA),
Loan Market Association (LMA) and Loan
Syndications and Trading Association (LSTA)
Green Loan Principles, Social Loan Principles
and Sustainability-Linked Loan Principles;International Capital Markets Association(ICMA) Green, Social and Sustainability-Linked
Bond Principles; ICMA Sustainability Bond
Guidelines; and Orange Bond Initiative Orange
Bond Principles.

Disclaimer & Important Notices

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ANZ Social and Environmental Sustainability Target Methodology 2023

Measurement

TABLE 2

In measuring the amount for inclusion towards
the target, ANZ takes into account the portion of
the transaction that meets the eligibility criteria.5

Banking Activity

Products & Services include

Measurement basis

Key Guidance, Principles & Frameworks6

Funding7

Loans

Total committed amountAll funding:

The measurement of eligible banking activities
and the key guidance, principles and frameworks
relating to them, are summarised in Table 2.

Overview• ANZ Social and Environmental Sustainability Target Methodology• APLMA/LMA/LSTA Sustainability-Linked Loan Principles

Markets e.g. derivatives
Bonds

Capital raised where ANZ
has a facilitation role8• APLMA/LMA/LSTA Green Loan Principles

3. Eligible social and/or
environmental activities• APLMA/LMA/LSTA Social Loan Principles

4. Governance and reportingAll facilitation:• ANZ Social and Environmental Sustainability Target Methodology
Labelled sustainable finance:

Advisory• ICMA Sustainability-Linked Bond Principles• ICMA Green Bond Principles• ICMA Social Bond Principles

Loans• Orange Bond Principles
ANZ Direct
Investments

Treasury investments9

Value of bond purchases
held on balance sheet

Labelled bond purchases:• ICMA Sustainability Bond Guidelines• ICMA Sustainability-Linked Bond Principles• ICMA Green Bond Principles

Equity investments

2. Eligible banking activities,
assessment and measurement

Labelled sustainable finance:

Trade e.g. guarantees, standby lettersof credit, sustainable supply chain

Facilitation

1. Determining eligibility

Total investment amount• ICMA Social Bond Principles• Orange Bond Principles
Equity investments:• ANZ Social and Environmental Sustainability Target Methodology

5. For example, including the proportion of a property loan related to eligible green buildings (under this Methodology). 6. Illustrative only. Other guidance, principles, and frameworks may also be used to inform our assessment for inclusion. 7. Includes new transactions, increases to facilities andrefinanced transactions. Refinanced transactions are only included where ANZ is extending the funding term. ANZ excludes refinancing within 12 months of financial close of prior financing activity (unless the refinancing is taking out bridging finance), and extensions which are included under theoriginal credit decision. 8. The facilitation amount is ANZ’s proportionate share of capital raised (e.g. equity, bond or loan amount) where ANZ has advised, structured, underwritten, coordinated or distributed. The facilitation amount is reduced by ANZ’s final committed funding or investment amount(as applicable) and where ANZ has multiple facilitation roles a facilitation amount will only be counted once. 9. Treasury investments may qualify towards the target where they are liquidity portfolio investments (GSSS bond purchases held on balance sheet). Treasury investments are to be held by ANZ
for a minimum of 12 months before the investment counts towards the target.

Disclaimer & Important Notices

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ANZ Social and Environmental Sustainability Target Methodology 2023

3. ELIGIBLE SOCIAL AND/OR ENVIRONMENTAL ACTIVITIES
3.1 Eligible social and/or environmental activities for unlabelled transactions
Unlabelled transactions (including ANZ equity investments) involving an eligible social and/or environmental activity must align to at least one of the
Eligible Categories as defined in the ANZ SDG Bond Framework at the time of the transaction.
Table 3 sets out the eligible social and environmental categories drawn from the current ANZ SDG Bond Framework as at 30 September 2023. The ANZ
SDG Bond Framework is currently under review and will be updated as appropriate, considering evolving market frameworks, principles and guidance.
TABLE 3

Primary Sustainable
Development Goal10

Social and Environmental Category• Access to essential services

Primary Sustainable
Development Goal10

3.2 Eligible activities for labelledsustainable finance transactions
An ANZ labelled sustainable finance transaction(including ANZ direct investments in GSSS bonds)
will involve an eligible social and/or environmental
activity if it aligns to any one or more of the 17 UN
SDGs; ANZ labelled sustainable finance transactions
are not limited to the Eligible Categories as definedin the ANZ SDG Bond Framework.

Social and Environmental Category• Socioeconomic advancement and empowerment• Socioeconomic advancement and empowerment• Affordable basic infrastructure• Access to essential services• Socioeconomic advancement and empowerment• Affordable housing• Affordable basic infrastructure• Access to essential services• Affordable basic infrastructure• Sustainable water and wastewater management• Clean transportation• Pollution prevention and control• Socioeconomic advancement and empowerment• Renewable energy• Energy efficiency• Employment generation• Climate change adaptation• Socioeconomic advancement and empowerment• Environmentally sustainable managementof living natural resources and land use• Green buildings• Terrestrial and aquatic biodiversity conservation• Climate change adaptation

10. The ‘Social and Environmental Category’ described in this Methodology is referred to in the ANZ SDG Bond Framework as the ‘GBP/SBP Project Category’. The ANZ SDG Bond Framework provides some examples of what would be considered eligible activities (refer ‘Examples of Eligible Assets’).

Overview
1. Determining eligibility
2. Eligible banking activities,
assessment and measurement

3. Eligible social and/or
environmental activities
4. Governance and reporting
Disclaimer & Important Notices

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ANZ Social and Environmental Sustainability Target Methodology 2023

4. GOVERNANCE AND REPORTING
ANZ has a governance process in place tovalidate eligible transactions and monitor
and report progress towards the target.
Each potentially qualifying transaction isreviewed against the target eligibility criteria.
Transactions are recorded in a central repositoryand subject to a validation process which may
involve further enquiries to determine whether thetransaction should be included in the target. These
steps are overseen by Group ESG Governance, which
is separate to the ANZ businesses that are involvedin the eligible banking activities.
The target forum11 members are responsible forreviewing transactions for eligibility and the forum
has the authority to decide if transactions should not
be included towards the target. The forum also has
the authority to later remove a transaction from thetarget where it is agreed a transaction did not satisfy
the eligibility criteria and was incorrectly included.
Transactions will be eligible for inclusion if they
involve an eligible banking activity and an eligiblesocial and/or environmental activity.

Progress against the target is submitted to thefollowing ANZ committees:• Ethics and Responsible Banking Committee(each quarter), and• Board Ethics, Environment, Social, GovernanceCommittee (six monthly).
We report publicly on progress against thetarget annually and through our half year results.
Transactions will be reported in the half in which
they are assessed as being eligible for the target.
ANZ aims to regularly review this target
Methodology to ensure the target, and theeligibility criteria, are aligned to evolving market
developments including guidelines, framework,
standards, principles and regulatory requirements.
ANZ may amend this Methodology which may resultin the inclusion of new activities and any materialchanges will be transparently disclosed. Changes
in Methodology and the target eligibility criteria
will not be applied retrospectively.

11. The target forum includes representation from across ANZ, including from the relevant contributing businesses, the Risk function and Group ESG.

Overview
1. Determining eligibility
2. Eligible banking activities,
assessment and measurement
3. Eligible social and/or
environmental activities

4. Governance and reporting
Disclaimer & Important Notices

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ANZ Social and Environmental Sustainability Target Methodology 2023

DISCLAIMER &IMPORTANT NOTICESThe Methodology is in summary form and does
not purport to be complete. It has a sustainability
focus and does not reflect the totality of ANZ’sbusiness activities. For a more complete overview
of ANZ’s business, see the ANZ Annual Reportavailable at anz.com/shareholder/centre/.
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 theinvestment objectives, financial situation orneeds of any particular investor. These should beconsidered, with or without professional advice,when deciding if an investment is appropriate.

Forward-looking statements

Climate-related information

This Methodology may contain forward-looking
statements or opinions including statements
regarding our intent, belief or current expectations
with respect to ANZ’s business operations, market
conditions, results of operations and financial
condition, sustainability objectives or targets,
specific provisions and risk management practices.
When used in the Methodology, the words 'goal','target', 'pathway', ‘may’, ‘will’, ‘would’, ‘should’ andsimilar expressions, as they relate to ANZ and its
management, are intended to identify forwardlooking statements or opinions. Those statements
are usually predictive in character; or may beaffected by inaccurate assumptions or unknown
risks and uncertainties or may differ materiallyfrom results ultimately achieved. As such, thesestatements should not be relied upon when
making investment decisions. These statements
only speak as at the date of publication and no
representation is made as to their correctness
on or after this date. Forward-looking statements
constitute ‘forward-looking statements’ for the
purposes of the United States Private Securities
Litigation Reform Act of 1995. ANZ does notundertake any obligation to publicly release theresult of any revisions to these forward-looking
statements to reflect events or circumstances
after the date hereof to reflect the occurrenceof unanticipated events.

This Methodology may contain climate-related
statements, including in relation to climate-relatedrisks, opportunities, goals and ambitions. Climaterelated information is subject to significant
uncertainty, challenges and risks that may affectthe application of this Methodology and theusefulness, accuracy and completeness of theclimate-related statements it contains. These
uncertainties, challenges and risks include:
1. Availability and reliability of data – emissions
and climate-related data may be incomplete,inconsistent, unreliable or unavailable (including
information from ANZ’s clients), and it may benecessary to rely on assumptions, estimates orproxies where that is the case.
2. Uncertain methodologies and modelling –methodologies, frameworks and standards
used for calculations of climate-related metrics,
modelling and climate data are not universally
applied, are rapidly evolving and subject to change.
This may impact the data modelling, approaches,
and targets used in preparation and applicationof this Methodology.
3. Complexity of calculations and estimates –Estimating emissions reduction is complex
and relies on assumptions and judgments,
often made in respect of long periods of time.
4. Changes to climate-related governing
frameworks – changes to climate-related policy,
laws, regulations and market practices, standards
and developments, including those resulting fromlegal proceedings and regulatory investigations.

5. Lack of consistency in definitions and climatescience terminology subject to changes –definitions and standards for climate-related data
and assessment frameworks used across industries
and jurisdictions may vary, and terminology
and concepts relating to climate science anddecarbonisation pathways may evolve andchange over time. These inconsistencies andchanges can also make comparisons between
different organisations’ climate targets andachievements difficult or inappropriate.
6. Reliance on third parties for data or
involvement – ANZ may need to rely on
assistance, data or other information fromexternal data and methodology providers orother 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 and governmental andnon-governmental organisations).
Due to these challenges, uncertainties and risks,statements, assumptions, judgments, calculations,estimates or proxies made or used by ANZ in
preparing or applying this Methodology may
turn out to be incorrect, inaccurate or incomplete.
Readers should conduct their own independent
analysis and not rely on the information forinvestment decision-making.
The information in this notice should be readwith the qualifications, limitations and guidance
included throughout the Methodology.

Overview
1. Determining eligibility
2. Eligible banking activities,
assessment and measurement
3. Eligible social and/or
environmental activities
4. Governance and reporting

Disclaimer & Important Notices

anz.com/esgreport

ANZ Group Holdings Limited (ANZ) ABN 16 659 510 791.
9/833 Collins Street, Docklands Victoria 3008 Australia.
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