2020

ESG PRESENTATION &ESG REFERENCE PACK—

7 SEPTEMBER, 2020

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

CONTENTS
2020 ESG PRESENTATION & ESG REFERENCE PACKESG Presentations

2

CEO Presentation

2

Group Executive Australia Retail & Commercial Presentation

10

ESG Reference Pack

14

Case studies

16

Governance23

Sustainability

28

Remediation

33

Royal Commission & APRA Self-assessment

35

Carbon37

Human Rights & Modern Slavery

46

1

2020

ESG PRESENTATIONSHAYNE ELLIOTTCHIEF EXECUTIVE OFFICEROUR PURPOSEOUR PRIORITIES

1Suitable and affordable housing

2

Environmental sustainability

3

Financial wellbeing

Fundamental to our approach is a commitment
to fair and responsible banking

3

ESG TARGET PERFORMANCESCORECARD SNAPSHOT (March 2020)

March 2020

Progress vs target

1st of peers

On track

Fund and facilitate at least $50b by 2025 in sustainable solutions$4.1b

On track

Reduce scope 1 & 2 emissions by 24% by 2025 and 35% by 2030

-29%

On track

Help enable social & economic participation of 1m people by 2020

>998k

On track

Increase women in leadership to 33.1% by 2019 (34.1% by 2020)

33.1%

Off track829

Off track$315m

On track

2,160

On track

FAIR & RESPONSIBLE BANKING
Improve reputation and community trust1
ENVIRONMENTAL SUSTAINABILITYFINANCIAL WELLBEING

Recruit >1,000 people from under-represented groups by 2020
HOUSING
Fund and facilitate $1b of investment by 20232
NZD100m of interest free loans to insulate homes3

1. RepTrak® community sentiment indicator score (ranking)
2. To deliver ~3,200 more affordable, secure and sustainable homes to buy and rent (Australia)
3. # Loans approved (Value) for ANZ NZ mortgage holders
For full list of definitions and references refer to the ‘Sustainability’ section of the Reference Pack

(NZD 7.45m)

4OUR APPROACH

PROTECT

ADAPT

ENGAGE

PREPARE… our people,
our customers &shareholders… to thechanging
environment… even moreproactively with our
stakeholders… for the future

Our approach has guided a ‘statement of intent’ reflecting our commitment to supporting our customers

A summary of ANZ’s ‘statement of intent’ is included in the ESG Reference Pack

5

PROTECTING OUR CUSTOMERS, OUR PEOPLE, OUR ABILITY TO OPERATEOUR
CUSTOMERSOURPEOPLEBALANCESHEET~200,000

~90%

$44b

loans provided with COVID-19 relief
measuresof our people working from home
across 32 markets

increase in customer deposits(Sep 19 to Jun 20)

~$7b

85%

$1.3b

lending1 to Institutional customers in
March-20

1.
2.

Credit Risk Weighted Assets
July 2020 My voice COVID-19 Pulse survey

staff engagement score2

increase in CET1 capital(Sep 19 to Jun 20)

6

REVIEWING OUR RESPONSE TO THE PANDEMIC THROUGH AN ESG LENS

Ethics, Environment, Social and Governance
Board committee

Ethics and Responsible Business
Management committee

Oversees measures to advance ANZ’s purpose,
focusing on EES&G matters

Operationalises objectives and makes decisions on
issues and policies

INDICATIVE AGENDA AND TOPICS COVEREDINDICATIVE AGENDA AND TOPICS COVERED
10%

13%
10%

34%

Governance

9%

30%

13%

Who we bank

12%

E.G. Who we bank
• Industry sector reviews• Human rights policy• Carbon policy• Sensitive wholesale transactions• High risk customer management

How we bank

Our purpose & priorities

26%

43%

How we measure & communicate
7

STAKEHOLDER ENGAGEMENT

Customers

Government & Regulators

Employees

Non-Government Organisations (NGOs)

Shareholders

Industry
Associations

8

GROUP OBJECTIVES

Improve the financial wellbeing and experience of our customers
Maintain risk discipline focused on good customer and regulatory
outcomes
Build a diverse and adaptable team who listen and learn
Run core businesses well and deliver sustainable operational
improvements

9

2020

ESG PRESENTATIONMARK HANDGROUP EXECUTIVE AUSTRALIA RETAIL & COMMERCIALSUPPORTING OUR CUSTOMERSRETAIL

COMMERCIAL

Home loans with deferred repayments~22,000 business loans with deferred repayments(% of Home loan portfolio, July 2020)(Australia, deferrals by industry by % of EAD July 2020)

Commercial Property& Construction

9%
Other Industries
26%

19%
Agriculture,
Forestry
4% & Fishing

6%~84,000
home
loans~24,000
home
loans

14%

Health & 9%
Community Services
18%

Australia

NZ

Accom. Cafes& Restaurants

Retail Trade

10%
Other Property& Business Services

11

SUPPORTING OUR PEOPLE

Staff support to work from home
Culture and employee wellbeing initiatives• ‘HealthyMe’ digital app• Employee Assistance Program
Transition plans to the ‘future of work’

12

PROTECTING OUR STAKEHOLDERS

www.anz.com.au/security/protect-your-virtual-valuables/

13

2020

ESG PRESENTATION &ESG REFERENCE PACK—ESG REFERENCE PACKOUR PURPOSEONE OF THE WAYS WE ARE BRINGING OUR PURPOSE TO LIFE IS THROUGH HELPING TO ACT ON COMPLEX ISSUES THAT
MATTER TO SOCIETY AND ARE CORE TO OUR BUSINESS STRATEGY.
A COMMITMENT TO FAIR AND RESPONSIBLE BANKING UNDERPINS OUR APPROACH.

CHOICES ABOUT WHO WE SERVECHOICES ABOUT HOW WE OPERATE• WHO we bank

• HOW we organise ourselves• HOW we bank

• HOW we behave• WHAT we care about• HOW we measure & communicate ourprogress

WHAT WE CARE ABOUT
Housing

Environmental Sustainability

Our focus …

Leading to …

Our focus …

Leading to …

Homes to Buy

Home ownership

EnergyLower carbon emissions

Homes to Rent

Housing choice

Water

Water stewardship

Access to Housing

Housing security

Waste

Waste minimization

Financial Wellbeing
Our focus …

Leading to …

Financial AccessEconomic participation

Financial Fitness

Financial health

15

CASE STUDY – FINANCIAL WELLBEINGHELPING OUR CUSTOMERS TO SAVE, THROUGH INSIGHTS, NUDGES AND GOALS
1

SET AND TRACK A SAVINGS GOALS THROUGH THE ANZ APP• ANZ’s Adult Financial Wellbeing Survey found active saving and not borrowing foreveryday expenses, to be the greatest behavioural drivers of financial wellbeing.
• In Oct 2019 we launched ‘set a savings goal’ feature in the ANZ App to help
customers better manage their money and develop healthy savings habits.
• From July 2020, customers began receiving personalised in-app notifications,encouraging them to set a goal, stay on track and celebrate milestones along the way.
How our customers are feeling about the savings goal and notifications feature:• 1 in 10 active app users have set a goal to date.
• Top savings goals are: ‘House’ (24%), ‘Holiday’ (18%), ’Car’ (11%) and ‘Rainy day’(9%).
• Sent over 2.5m in app notifications. Customers with a ‘home goal’ were the mostengaged with these notifications.
• Customers with a goal have a savings balance 3x that of a customer without a goal.
• We’ve seen an incremental lift of nearly 7,500 more customers moving from ourtransactor to savers segment.

“Seeing the % rise and the photo attachedto the goal helps keep me focused and on
track. I remember what I’m saving for andit deters me from making any
withdrawals. It’s a great feature that has
definitely helped me.”16

CASE STUDY – SOCIAL & AFFORDABLE HOUSING: A NEW FIXED INCOMEASSET CLASS
2SOCIAL & AFFORDABLE HOUSING
HOUSING NEW ZEALAND, A SUBSIDIARY OF KĀINGA ORA HOMES & COMMUNITIES• Two transactions in April 2020
– NZD1Billion Dual Tranche Wellbeing Bond (5.1yr/10yr), April 2020
– NZD300m Inflation-Linked Wellbeing Bond (20yr), April 2020
• Kāinga Ora seeks to become a world-class public housing landlord by partnering with government and the property
and construction sector on urban development projects for communities in need
• Bonds fund new and retrofit social housing projects in accordance with New Zealand Government’s Living Standards
Framework• 4thand 5th issuances since March 2019, with outstanding Wellbeing Bonds totaling NZ$2.8 billion• Matthew Needham (Deputy Chief Executive): “This transaction is the next evolution on our wellbeing
bond programme, which we continue to incorporate into our programmes and practices.”
NATIONAL HOUSING FINANCE AND INVESTMENT CORPORATION• National Housing Finance and Investment Corporation (NHFIC) seeks to improve housing outcomes in Australia andreduce pressure on housing affordability• Bond funds 10 Community Housing Providers financing 2,736 properties• 3rd issuance in 18 months, with outstanding NHFIC bonds to A$1.192 billion• More outstanding Social Bonds than any other issuer in the Australian market• Nathan Dal Bon (CEO): “These funds will be channelled directly to community housing providers to support
Australian’s most in need at such a challenging time.”

17

CASE STUDY – ENVIRONMENTAL SUSTAINABILITYSUSTAINABLE FINANCE INITIATIVESANZ’S 2025 $50B SUSTAINABLE FINANCE TARGET

3

Half Year Progress•

Target to fund and facilitate at least $50 billion by 2025 towards
sustainable solutions for our customers•

Initiatives must improve environmental sustainability, increase accessto affordable housing, or promote financial wellbeing•

Since 1 October 2019, we have funded and facilitated $4.08 billion
in sustainable finance transactions including•–

Labelled green, social and sustainability bonds–

Labelled sustainability linked and green loans–

Renewable energy and low emissions transport loans andbonds$2.03 billion of transactions are on-balance sheet, whilst $2.05 billion
have been executed through advisory services or distribution toinvestors via bon markets•

Two thirds of Target transactions occurred in Australia, remaining third
across NZ, Asia, USA and Europe•

29 transactions have contributed towards 6 particular
Sustainable Development Goals (SDGs)$50B TARGET RESULTS - 1H VOLUMEBY SUSTAINABLE DEVELOPMENT GOAL

46%

5%

21%
6%
16%

6%

CASE STUDY – FAIR AND RESPONSIBLE BANKINGHELPING CUSTOMERS TO GET ON TOP OF PERSISTENT CREDIT CARD DEBT
4CONTACTING CONSUMER CREDIT CARD CUSTOMERS WHO ARE CARRYING PERSISTENT DEBT AND PAYING LITTLE OFF TO
GET THEM ON TO LOWER RATE CARDS AND ASSIST THEM TO PAY THEIR DEBT FASTER
ANZ announced sixteen commitments that responded to a number of the Banking Royal Commission’s recommendations andcomments, based on our understanding of what the community expects of us. One of the 16 commitments was helping customers get
on top of persistent credit card debt.
Why we made this commitment? To build on in-train work and to go to the spirit of Royal Commission process and Final Report. We
believe that it is a community standard and expectation that we assist our customers to benefit from our products where we can. We
are conscious that we must also take our customers’ choices into account when we undertake this type of work.
Where we are up to? We have completed this commitment by establishing a process to contact credit card customers who are carrying
persistent debt. We provide these customers financial education on how credit cards work and offer assistance plans to help them to
pay their debt faster.
As at 25 March 2020 we had contacted 18,195 customers, with 4,966 customers responding to our contact. Of those contacted 1,440
customers accepted the offer to transfer to an instalment plan at a reduced interest rate of 7%. A further 1,397 customers appreciatedthe financial education provided while the remaining 2,115 customers chose to take no action.
Note: The program was paused in March 2020 to respond to COVID-19 with support for our customers. This includes support for credit
card customers who are worried about managing their credit card debt. Once the situation has settled, the original program will bereassessed so we can continue to support our customers.

19

CREATING VALUE FOR OUR STAKEHOLDERS – 31 MARCH 2020

CUSTOMERSEMPLOYEESCOMMUNITYSHAREHOLDERS5~8.7m total retail, commercial
and Institutional customers~39,000 people employed(FTE)$142m contributed in community
investment in FY193>500,000 Retail & Institutional
shareholders$304b in retail & commercial
customer deposits in Australia and
New Zealand

829 people recruited (HY20) fromunder-represented groups,
including refugees, people withdisability and Indigenous
Australians since 2016

Activated disaster relief packages
in FY 19 for the Australian summer
bushfires and donated AU$1.5
million to bushfire relief efforts$1.4b
1H20 cash profit reported$344b in home lending inAustralia and New Zealand
Full mobile wallet offering,
including Apple PayTM,
GooglePayTM, Samsung PayTM,
FitBit PayTM and Garmin PayTM#1 Lead bank for trade services1

33.1% of women in leadership,(HY20), increase from 29.9% FY
20162

Donated AU$1.5 million and
NZ$2 million to a range ofcharities to support vulnerable
people impacted by COVID-19

Almost 1.5m hours of training
provided in FY19

134,930 volunteering hours
completed by employees in FY19
Almost 1m people reached throughtarget to help enable social andeconomic participation in FY194

49.9 cents
earnings per share
25 cents
per share fully franked
dividend announced for 1H120
4.7%
return on average ordinary
shareholders equity

All financial metrics are as at 31 March 2020 (P&L growth metrics for the half year ended 31 March 2020) unless otherwise stated.
1. Peter Lee Associates Large Corporate and Institutional Transactional Banking surveys, Australia and New Zealand 2004-2019. 2. Measures representation at the Senior Manager, Executive and Senior Executive
Levels. Includes all employees regardless of leave status but not contractors (which are included in FTE) 3. Figure includes forgone revenue (2019 = $109m), being the cost of providing low or fee-free accounts to a rangeof customers such as government benefit recipients, not-for-profit organisations and students. 4. Through our initiatives to support financial wellbeing including financial inclusion, employment and community programs,
and targeted banking products and services for small businesses and retail customers. 5. On a cash profit continuing operations basis.

20

NEW COVID-19 CUSTOMER SUPPORT: STATEMENT OF INTENT
We are committed to supporting our customers through the COVID-19 pandemic, and the recovery period that will
follow, in finding a solution that is respectful, fair and appropriate for them. Our approach is guided by four principles,
each with its own underlying commitments.

Protect our customers“We will communicate with all
customers who accept a deferralat key points during thisrepayment deferral period. We
will call all those customers most
severely impacted to discuss
their financial position andcapacity to recommence
repayments. All customers may
request an individual discussion.”“We will seek to ensure that
customers have reasonable time
to assess their options. We
recognise a customer’s personal
circumstances will shape theoptions available.”

Adapt to the changing
environment

Engage proactively with
our stakeholders“We know there will be difficult
situations where we need to help
customers wind up theirborrowings, including by potentiallyselling their assets or bringing theirbusiness to an end. When thishappens, we will be ethical andsensitive in our actions.”“Retail and small businesscustomers that are unlikely torecover financially in the longerterm will be given individualised
support by our specialist hardshipteam. In making this assessment
we will consider their essential
living costs and any other debts
they have.”“Where we become aware acustomer is experiencing
vulnerability beyond financial
difficulty, if appropriate, we willrefer them to community support
services, such as an independent
financial counsellor.”“Drawing on the lessons we havelearnt from the Royal
Commission, we will engage
honestly, transparently andcollaboratively with customers,
regulators, governments,
financial counsellors andconsumer advocates about ourapproach to the pandemic.”“We will incorporate customer
feedback into ourcommunications, helping to makesure they are clear and easy tounderstand.”Prepare for the future“We will continue to use
data and insights to inform
our customer support
measures and will
constantly re-assess theeffectiveness of ourapproach. We will also use
our insights to proactively
identify customers whoneed assistance and seek
to engage early.”“We will inform customers
who are dissatisfied with usthat they can make acomplaint to our external
dispute resolution provider,
Australian Financial
Complaints Authority”

21

COMMUNITY SUPPORT DURING COVID-19
Since March 2020, we have directed around $12 million to our community partners who are assisting those mostdisadvantaged in our communities. We are also delivering our financial literacy programs remotely so participants cancontinue learning key financial skills.
COMMUNITY FUNDING
Funds have been used to support:• Financial Counselling Australia, enabling specialist financial counselling services available to women who haveexperienced or are experiencing domestic and family violence• The Smith Family helping to build the digital inclusion and financial wellbeing of 56,000 disadvantaged families• The Brotherhood of St Laurence, to improve employability of disadvantaged Australians, including single parents, refugees andasylum seekers, and people living with disability.
FINANCIAL LITERACY PROGRAMS DURING COVID-19• Saver Plus is ANZ’s flagship matched savings and financial education program that helps participants develop a savings habit, build
financial resilience and improve financial capabilities.
• In April we implemented a COVID-19 policy to support those participants who no longer had the capacity to save tosuspend their participation and have early access to their matched savings funds, despite not meeting all requirements. We remain inclose contact with these participants to encourage them to resume participation when circumstances improve.
• We switched to remote delivery across all 60 sites so participants could continue their financial education.
• Remote delivery has reduced access barriers for some people. For example, single mother of two, Sharon (pseudonym) says being
able to access the program online has enabled her children to sit alongside her and participate in the program. Completing the online
modules with her children propelled her son into thinking about different ways to save money: “Spending leaks were a real focus for
my son. He actually said to me ‘Let’s not buy too much. It’s ok sometimes, but not every time. Then we can save that money’”Sharon recounts. “He’s been talking about his dream of a two story house for years. Now he sees how we can save for that house.”• We continue to see significant uptake of the program – there was a 16% increase in program enquiries in June 2020.
22

2020

ESG PRESENTATION &ESG REFERENCE PACK—

GOVERNANCE

ESG – GOVERNANCE OVERVIEWBOARD OF DIRECTORSDavid Gonski, Chairman

Audit Committee

Risk Committee

Chair:
Paula Dwyer

Chair:
Graeme Liebelt

Ethics and Responsible BusinessCommittee (ERBC)

Ethics, Environment,
Socialand GovernanceCommittee
Chair:David Gonski

Digital Businessand Technology
Committee

Human Resources
Committee

Nomination and
Board Operations
Committee

Chair:
Jane Halton

Chair:
Ilana Atlas

Chair:David Gonski

Customer Resolution Portfolio

Chaired by CEO

Reports to Group Executive Australia Retailand Commercial Banking

It’s a leadership & decision making bodythat exists to advance ANZ’s purpose. It
meets ~five times p/y. It is comprised ofsenior execs from business divisions &Group functions

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

Royal Commission & Self-Assessment
Oversight Group
Chaired by CRO and DCEO
Involves Group Executive Australia Retailand Commercial Banking, Group Executive
Talent and Culture, Group General Counsel,
GGM Communications and Public Affairs,
GGM Corporate Affairs.
Reports to the Board

24

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, socialand governance matters.

Purpose: Operationalise Board objectives and makedecisions on issues and policies

Oversight of the Ethics andResponsible BusinessCommittee

Review and monitor
ethical, environmental,social and governance risks
and opportunities

Discuss and decide on
ethical, environmental,social and governance risks
and opportunities

Establish decision-making
principles and guide choices
on industry sectors,
customers and transactions
we bank and how we bank

Code of Conduct review

Review of customer
complaints and otherconduct related matters

Review the adequacy,
effectiveness and fairnessof ANZ’s approach tocustomers experiencing
vulnerability

Define ESG agenda, set
ESG targets and monitor
progress

Oversight and approval of
corporate governancepolicies and principles

Ensure ANZ’s purpose,brand and values arealigned with ourcommunity investment,
strategic partnerships andcorporate sponsorships

Review and decidesensitive wholesaletransactions

Oversight and approval of
ESG reporting and targets

25

BOARD ETHICS, ENVIRONMENT, SOCIAL AND GOVERNANCE COMMITTEE (EESG)
INDICATIVE AGENDA AND TOPICS COVERED, GENERALLY MEETS FOUR TIMES A YEAR
How we measure and communicate• ESG reporting and targets• ESG external assurance• Climate risk analysis
13%• External assessments / reputational
indicators

Our purpose and priorities• Housing• Financial wellbeing• Environmental sustainability

30%

10%

How we bank
• CEO conduct report• Vulnerable customers• Product suitability• ESG implications of COVID-19

34%

13%

Governance• Governance and regulatory updates• Committee forward agenda• Review of Ethics and Responsible BusinessCommittee minutes• Materiality Assessment• Leading practices for ESG Board Committees

Who we bank
• Emerging social issues e.g. Modern slavery, watermarkets• Carbon policy, transition plans for largest emitting
customers• Human Rights policy

ESG topics discussed by full Board or other Board sub-committees• Royal Commission – governance over program of work
• Regulator enforcement activity• Customer remediation• Remuneration policy and practices
26

ETHICS AND RESPONSIBLE BUSINESS MANAGEMENT COMMITTEE (ERBC)
INDICATIVE AGENDA AND TOPICS COVERED, GENERALLY MEETS FIVE TIMES A YEAR
Governance• Materiality Assessment• Social and Environmental Risk policy• Governance framework for external
12%
ESG commitments

Our purpose and priorities• Housing• Financial wellbeing• Environmental sustainability

43%

9%

Who we bank
• Industry sector reviews• Human rights policy• Carbon policy• Sensitive wholesale transactions• High risk customer management

Committee membership
Chair: CEO

26%
How we bank
• Vulnerable customers• Product suitability• Accessibility and diversity

•
•

10%
How we measure andcommunicate• ESG targets – reviewing
and monitoring• ESG reporting

GGM, Corporate Affairs••
GM Credit, Specialised Lendingand Head of Social and•Environmental Risk•

GGM, Group Strategy•

Customer Advocate, Australia•

Group Executive, Institutional•

Portfolio Lead, Home Owners,
Australia

MD, Commercial Banking,Australia
MD, Retail & Business Banking,
New Zealand
Regional Executive, Pacific

3rd Party Advisor:• Simon Longstaff, Executive
Director, The Ethics Centre

27

2020

ESG PRESENTATION &ESG REFERENCE PACK—SUSTAINABILITY

ESG TARGET PERFORMANCESCORECARD SNAPSHOTWe are committed to the United Nations Sustainable Development Goals (SDGs). Our ESG targets support 11 of the 17 SDGs.

FAIR AND RESPONSIBLE BANKING
Improve reputation and community trust RepTrak® community sentiment indicator score (ranking1)

March 2020

Relevant SDGs

58 (1st)ENVIRONMENTAL SUSTAINABILITY
Fund and facilitate at least $50b by 2025 in sustainable solutions2$4.08bReduce scope 1 & 2 emissions by 24% by 2025 and 35% by 20303-29%

FINANCIAL WELLBEING
Help enable social and economic participation of 1 million people by 20204>998k5

Increasing women in leadership to 33.1% by 2019 (34.1% by 2020)

33.1%

Recruiting >1,000 people from under-represented groups by 2020

829

HOUSING
Fund and facilitate $1b of investment by 2023 to deliver ~3,200 more affordable, secure andsustainable homes to buy and rent (Australia)
NZD100m of interest free loans to insulate homes for ANZ NZ mortgage holders# Loans approved (Value)$315m
2,1606(NZD7.45m)

Note: This information has not been independently assured. KPMG will provide assurance over ANZ’s full year performance against targets in its annual ESG reporting to be released in November 2020.
1. RepTrak® community sentiment indicator ranking based on the four major Australian banks; 2. Performance includes initiatives that help improve environmental sustainability, increase access to affordable
housing and promote financial wellbeing. This target is new in 2020 and replaces the $15bn sustainable solutions target that we exceeded one year ahead of schedule in 2019 ($19.1bn); 3. Reducing the direct
impacts of our business activities on the environment; 4. Through our initiatives to support financial wellbeing including financial inclusion, employment and community programs, and targeted banking products
and services for small businesses and retail customers; 5. Measured at 30 September for each respective year – full year results available in November 2020; 6. Results as at 31 December 2019.
29

HOW WE MEASURE AND COMMUNICATE
EXTERNAL REPORT CARD – REPUTATION INDICATORS
Context:
Reputation indicators are increasingly being used by investors and analysts to understand our approach to ESG issues and to measure
our ESG performance against our peers. We are rated based on our ESG disclosures, analysis of media coverage and, in the case of DJSI,
a detailed survey. Indicators are firmly weighted towards governance and how we manage staff and customers.

In 2020, ANZ received a rating ofA (on a scale of AAA-CCC) in the
MSCI ESG Ratings assessment.

In 2020, ANZ received Prime
status with a rating of C (on ascale of A+ to D-) in the ISS ESG
Corporate Ratings assessment.

In 2020 received SAM Silver Class
distinction with a score of 82 (out of 100)in the 2019 Dow Jones Sustainability
Indices Corporate Sustainability
Assessment.

In June 2020, ANZ received an ESG Risk
Rating of 23.2 (out of 100, lower = better)
and was assessed by Sustainalytics to be at
medium risk of experiencing material
financial impacts from ESG factors.

Outcome:
Reputation indicators for ANZ and other major Australian banks show long-term, mid-range rank among major corporates. Our key
weakness, scrutinised in the Royal Commission as our failure to always responsibly deliver products and services, continues to impact our
performance although to a lesser extent than 12 months ago. All indicators are consistent.
Relevant ESG target:
Group scorecard, maintain strong performance on Dow Jones Sustainability Index.
Disclaimer: The use by ANZ of any ESG research data, logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation or promotion of
ANZ by those companies.
30

SUSTAINABILITY PERFORMANCE TRENDS
COMMUNITY INVESTMENT1MONEYMINDED & SAVER PLUS

131
75

137

Funded and facilitated ($b)

Estimated # of people reached

Total community investment ($m)
142

80,074
69,82690

ENVIRONMENTAL FINANCING$15B TARGET

88,308 90,927

19.1
11.5

65,549

6.9
2.5

2015

2016

2017

2018

2019

2015

2016

2017

2018

2019

EMPLOYEE ENGAGEMENT2ENVIRONMENTAL FOOTPRINTTARGET

Employee engagement score (%)

Scope 1 & 2 greenhouse gas emissions(k tonnes CO2-e)
210
194
181
171
157

76

2015

74

2016

72

73

2017

2018

77

2019

2015

2016

2017

2018

2019

2016

2017

2018

2019

WOMEN IN LEADERSHIP3
Representation (%)

29.5

29.9

2015

2016

31.1

32.0

32.5

2017

2018

2019

1. Figure includes forgone revenue (2019 = $109m), being the cost of providing low or fee-free accounts to a range of customers such as government benefit recipients, not-for-profit
organisations and students 2. The 2017 engagement survey was run as a pulse survey sent to 10% of the bank’s employees with a 57% response rate. For all other years the employee
engagement survey was sent to all staff 3. Measures representation at the Senior Manager, Executive and Senior Executive Levels. Includes all employees regardless of leave status but notcontractors (which are included in FTE)
31

EXTERNAL REPORTING
RECOGNITION

We achieved a CDP
climate disclosure scoreof A- in 2019

Member of the
FTSE4Good Index

Ranked amongst the top
100 companies forgender equality globallyby Equileap in 2019AWEI Platinum Status
LGBTI Employer of
Choice in 2019

Ranked amongst the Top
10 Best Workplaces toGive Back in Australia by
GoodCompany in 2019

We report in line with using
the recommendations of the
Financial Stability Board’s(FSB) Task Force on ClimateRelated Disclosures (TCFD)

As an Equator Principles
Financial Institution
signatory we report on our
implementation of the
Principles in our ESG
Supplement

In 2019 we became afounding signatory to the
UN Principles for
Responsible Banking.

We measure the value of
our community investment
in accordance with theLondon Benchmarking
Group (LBG) methodology

FRAMEWORKS

Our ESG reporting is
prepared in accordance with
the Global Reporting
Initiative Standards(Comprehensive level)

32

2020

ESG PRESENTATION &ESG REFERENCE PACK—REMEDIATIONCUSTOMER REMEDIATIONCUSTOMER REMEDIATIONCUMULATIVE CUSTOMER REMEDIATIONCONTINUING OPERATIONSCONTINUING & DISCONTINUED OPERATIONS

485

PRE TAX $m

PRE TAX $m

1,579

119

352

29

86

51

153

220

1H17

2H17

1H18

928
256

753
181
572

672

2H18

1H19

POST TAX $m

129
22

100
67
19

156
13

22

36

42

36

2H18

Net interest income

1.

1,286

2H19

1H20

112

157

1H17

2H17

1H18

334

1,401
428

534
127
407

657
180
477

882

973

2H18

1H19

2H19

1H20

Discontinued (Wealth businesses)

Continuing operations

71

35

1H18

40

546

1,157

1,216

110
337

422

1,832

1H19

2H19

1H20

Other operating income

Expenses

Balance Sheet1$1,094m provisions on Balance Sheet at Mar-20 ($1,139m at Sep-19)

Includes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims, penalties and litigation outcomes

34

2020

ESG PRESENTATION &ESG REFERENCE PACK—ROYAL COMMISSION & APRA SELF-ASSESSMENTROYAL COMMISSION & APRA SELF-ASSESSMENTOUR APPROACH, OUR RESPONSE
WE ARE TAKING ACTION TO THE ‘SPIRIT AND THE LETTER’ OF THE ROYAL COMMISSION
Governance – aligned response to the Royal Commission and
the APRA Self-Assessment• Our Royal Commission & APRA Self-Assessment Oversight Group isoverseeing our work and provides quarterly updates to the Board.
• Co-chaired by Deputy CEO and CRO, involving Group Executive
Australia Retail & Commercial Banking, Group Executive Talent andCulture, Group General Counsel, GGM Communications and Public
Affairs, GGM Corporate Affairs, Group Executive Institutional (fromFebruary 2020), Group Executive & CEO New Zealand (from August2020).
• Our Self-Assessment remediation plan (Roadmap) addresses our 5
Focus Areas (Culture; Governance and Accountability; Managementof Operational Risk; Remediation; and Simplification), and ourlessons from the Royal Commission.

ANZ Actions - Progress on our 16 commitments
11
Actioned4

Pending legislation change
Ongoing

1

Constructive engagement with reform• Engaging constructively with Government, regulators and industry as
they respond to the Royal Commission recommendations.

Our Royal Commission response• Made 16 commitments as part of our response to the Royal
Commission, to improve the treatment of retail customers, small
businesses and farmers in Australia.
• Completed 11 commitments to date. Progress includes action on
distressed agricultural loans, remuneration of front line staff, theSedgwick Review, culture and governance, and reporting on
remediation of existing failures.
• An update on our progress as at 21 August 2020 can be found at:https://www.anz.com/shareholder/centre/investor-toolkit/RoyalCommission/

Our APRA Self Assessment response• Identified programs of work and success measures that will address
the Focus Areas. These are reviewed and updated ongoing to ensure
they remain relevant.
• Success measures for each focus area will allow us to assess
whether our initiatives are improving what we do and how we do it.
• We have made continued progress in addressing the Focus Areas
since 2018, and remain committed to the Roadmap.

36

2020

ESG PRESENTATION &ESG REFERENCE PACK—CARBONOUR APPROACH TO CLIMATE CHANGE
We support an economy-wide shift : we support and encourage key industries to identify their risks and plan for thetransition, while simultaneously helping industries that are able to create new job opportunities for their workforces

HELP
OUR
CUSTOMERS… encouraging them toidentify climate risks &opportunities, createtransition plans & reportpublicly on theirprogress

SUPPORT
EMERGING
INDUSTRIES… to help grow theeconomy as it
transitions

REDUCEOUR OWN
IMPACT… by managing andreducing emissions fromour own operations

Initiatives:• In 2018 we started engaging with 100 of our largest emitting customers to encourage and support them to establish, or strengthen existing low carbon
transition plans by 2021, focusing on energy, transport, buildings food, beverage and agriculture. By the end of this year we aim to have engaged all 100.
• We are funding and facilitating up to $50b of investment in environmentally sustainable solutions by 2025 to help our customers lower carbon emissions
through increased energy efficiency, low emissions transport, green buildings, reforestation, renewable energy and battery storage, emerging technologies
and climate change adaptation measures.
• We are managing our exposure to thermal coal (thermal coal mining lending now constitutes less than 0.1% of our balance sheet); helping our utility
customers reduce emissions; we are only lending to new diversified customers; and we no longer finance the construction of conventional coal fired power
plants. We will announce a suite of new and upgraded carbon policy measures and targets at our FY Results in October 2020.
38

ANZ CARBON COMMITMENTS AND DISCLOSURE – FY19/20 HIGHLIGHTS
HOW ANZ’S LENDING IS SUPPORTING THE PARIS GOALS

Thermal Coal Mining Exposures:

Oil & Gas Extraction Exposures:• Since 2015 (when the Paris Agreement was reached), we
have more than halved our exposures to thermal coalmining ($1.70bn to ~$600m).

• Since 2015, our exposures to oil and gas extraction companies
has been relatively stable ($8.6bn to $8.5bn).

• Several of our diversified mining customers have also acted
to divest their thermal coal interests in recent years, orsignalled their intention not to invest in expansionary
capex.
• Our exposure to thermal coal mining is a small portion of
our overall lending (at 31 March 2020 our exposure was~$600m, less than 0.1% of our Group exposure at default).

• Our support of gas companies in recent years has helped toreduce or contain emissions in a number of ways:• Gas has played an important role in firming intermittent
renewable generation, which has facilitated a faster rollout ofthese technologies than what otherwise might have occurred• Australian LNG exports has enabled coal-to-gas switching in
fast-growing Asian countries that has played a key role inpreventing faster growth of global emissions1• Several of our customers have set, or are intending to set,targets to reduce fugitive emissions of methane in upstream
production.
• Our exposure to oil and gas extraction is a small portion of ouroverall lending (at 31 March 2020 our exposure was ~$8.5bn, or~0.8% of our Group exposure at default).

1.

International Energy Agency’s 2019 ‘Role of Gas’ report.

39

ANZ CARBON COMMITMENTS AND DISCLOSURE – FY19/20 HIGHLIGHTS
HOW ANZ’S LENDING IS SUPPORTING THE PARIS GOALS

Renewable Energy Exposures:• Since 2015, we have significantly expanded our lending support
to the renewable energy sector.
• In our project finance portfolio, lending to renewables projects
has grown by almost 56% to $1.37b (annualised growth of~12%), with ANZ’s finance in FY19 helping to bring online
488MW of wind and solar capacity; a further 989MW isscheduled to come online during FY20.

Project Finance Power Generation Portfolio(Sept’ 19)9%8%

Renewables• At the same time, the amount of our project finance portfolio
comprised of coal and gas generation has declined year-on-yearfrom 40% in FY15 to 17% at the end of FY19.
• We are also increasing support to utilities that have madecommitments to expand renewable energy capacity, and incertain cases, withdrawing support to utilities that continue tofocus on expanding coal-fired generation capacity.
• We are also a significant lender to Transmission & Distribution
companies whose investments in building a modern energy grid
over the coming years, will play an important role in keeping
the system stable and reliable through the transition.

Gas
Coal

83%

Our direct lending to renewable energy has
increased since 2015 to reach $1.37bn in FY19.

40

ANZ CARBON COMMITMENTS AND DISCLOSURE – FY19/20 HIGHLIGHTS
FUTURE FOCUS AREAS & ACTIONS AROUND CLIMATE CHANGE

TCFD Theme

Focus Areas 2020/21

Beyond 2020 Vision

Governance• Align with regulatory guidance on climate-related risk governance,
including stress testing of selected portfolios• An enhanced risk management framework that is
responsive to climate, and meets financial regulators’
requirements

Strategy• Consider extending scenario analysis to incorporate bushfire, floodand other risks relating to retail customers• Possible extension of emerging environmental and climate-relatedrisks to other segments of the home loan portfolio• Include climate risk reference in Agriculture related lending
guidance documents used by our front line bankers• ANZ business strategy more closely aligned to a
resilient and sustainable economy that supports theParis Agreement and Sustainable Development Goals

Risk Management• Encourage customers to develop & disclose their transition plans in
key sectors energy, transport, buildings and food, beverage andagriculture• Customer engagement to identify customer or sector-specifictransition or physical risks• Integrate assessment of climate-related risks into
our Group risk management framework• Standard discussions with business customers
include climate-related risks and opportunities• Assessment of customer transition plans part ofstandard lending decisions and portfolio analysis

Metrics & Targets• Complete transition plan 2020/21 engagement with high emitting
customers and consider how to integrate into customer assessments• New 6-year $50 billion target to fund & facilitate sustainable
solutions• New metrics for measuring impact of our progress on environmental
sustainability• New target to procure 100% renewable energy for ANZ’s operations
by 2025• Monitor industry standards for lending aligned with
the Paris Agreement goals• Reduce ANZ’s operational emissions in line with thedecarbonisation trajectory of the Paris Agreement
goals

41

RESOURCES PORTFOLIORESOURCES EXPOSURE AT DEFAULT (EAD) BY SECTOR

THERMAL COAL EXPOSURE (EAD)
$b

$b

20.0
1.7
0.6
1.3
2.9

16.1
1.2

0.4

1.1
1.7

14.0
0.8
0.3
1.0

15.3
0.7
0.7
0.9
1.2

17.3
0.8
0.7
1.0

1.4

4.9
4.0

3.5

18.9
0.6
0.8
1.0
1.6

1.5

5.2

1.8
1.6
1.4
1.2

6.4

4.4

1.0
0.8
0.6

8.6

7.8

7.0

7.4

8.2

8.5

0.4
0.2

Sep-15

Sep-16

Sep-17

Sep-18

Oil & Gas Extraction

Services to mining

Metallurgical Coal Mining

Metal Ore Mining

Other Mining

Thermal Coal Mining

Sep-19Mar-20

0.0
Sep-15

Sep-16

Sep-17

Sep-18Mar-19Sep-19Mar-2042

IMPLEMENTATION OF CUSTOMER TRANSITION PLAN TARGET
Background•Our climate change policy, includes a commitment to “encourage and support 100 of our largest emitting customers in the energy,transport, buildings and food, beverage and agricultural sectors to establish or strengthen their low carbon transition plans, by 2021”.

How will success be measured with this target?
•

Customers further reporting on their transition plans by 2021 to provide stakeholders with public, specific and time bound information.

•

To date we have analysed the carbon disclosures of over 90 of our largest emitting customers and engaged with more than 60 of theseto support them to establish, or strengthen, low carbon transition plans.

•

We aim to engage with all 100 customers by September 2020. This will help us to establish a ‘baseline’ for how our customers are
responding to climate-risk and inform our ongoing engagement with them.

Which customers are in scope?
•

The customer selection process is informed by criteria including:– Direct emissions, ie emissions from company owned or operated assets– Indirect emissions from their ‘value chains’, ie both upstream and downstream from their operational footprint– The size and nature of our relationships was also considered to maximise prospects for deeper engagement

Next steps•

ANZ will publicly report progress against the target in our full year reporting. We will also provide six-monthly updates to our Ethics andResponsible Business Committee and to the Board Ethics, Environment, Social and Governance Committee.
43

EXAMPLE CUSTOMER DISCLOSURE TOWARDS LOW CARBON FUTURE
TRANSURBAN – TOLL ROAD OPERATOR
Transurban’s Climate Change Framework aims to support its transition to a net-zero emissions future as well as
ensuring the resilience of its infrastructure and operations.
To support its transition to a net-zero emissions future, Transurban has focused on initiatives that help to reduce
emissions across its entire value chain, including:
Own Operations

Suppliers

Targets• 10% reduction in energy use over the period
2013-2023• 50% reduction in absolute emissions by 2030
from fuel and electricity use (against FY19
base)
• Targets validated by Science Based Targets
initiative (SBTi)• 22% intensity reduction for purchased
goods and services by 2030 from a FY19
base (tCO2e per VKT)
• 55% intensity reduction for capitalprojects by 2030 from a FY19 base(tCO2e per $M capex)• Targets validated by SBTi

Initiatives toachieve targets

•
•
•
•

Ventilation optimisation• Use of low carbon materials in projects
LED upgrades
including concrete, asphalt and steel
Fuel efficiency programs• Supplier commitments to renewable
Onsite renewables (235kW of solar PV installed
energy purchases; carbon neutrality; andwith more planned)
use of Zero-emission vehicles• Transition towards 100% renewable through• Obtain Infrastructure Sustainability (IS)renewable power purchase agreements (PPAs);
ratings for major projects in Australia
80% in QLD & NSW starting in 2021/2022• Transitioning to low/zero-emission vehicle fleet

Customers• NA• Engage customers on fueland emissions reduction• Support the uptake of zero
emissions vehicles• Trialling an eco-driving
program for QLD customers

Transurban has also committed to integrating climate risk within their relevant processes and systems, developing adaptation plans for its assets andaligning its reporting with the recommendations of the FSB Taskforce on Climate-related Financial Disclosures.

44

EXAMPLE CUSTOMER DISCLOSURE TOWARDS LOW CARBON FUTURE
SYNLAIT – MILK NUTRITION COMPANY
Synlait’s aim is to have a net-positive impact on the planet and re-imagine all aspects of its business for a low emissions
future. To meet this aim, Synlait has reviewed its environmental footprint and developed Sustainable Innovation Platforms
that inform its actions around environmental stewardship. Below is a summary of the initiatives they are taking to
mitigate carbon emissions across their value chain.

On-farm

Off-farm

Company Goal

• Contribute to the Paris Agreement target of staying well below 2°C of warming by 2100, and ideally, 1.5°C

Targets• On-farm climate target: 35% reduction in GHGs per kgof milk solids by 2028 (against 2017/18 base year)• Farmer suppliers account for 81% of company GHG
emissions (on-farm emissions).

• Off-farm climate target: 50% reduction in GHGs per kg of
product by 2028 (against 2017/18 base year)• 19% of its emissions are off-farm (manufacturing, supply chain)

Initiatives• Providing farms with access to practical on-farm GHG
mitigation options;• Providing incentive payments to farmers to implement avariety of GHG reduction measures;• Research completed on the sources of nitrous oxide
emissions and the impacts of various mitigation options;also exploring methane inhibitors• Providing incentive payments to farms that are palm
kernel expeller (PKE) free
• Conducting research into regenerative farming tounderstand how to measure and improve soil health• Installation of a large-scale electrode boiler at a new fresh milkplant; successful trials conducted in FY20 on replacing the use ofcoal with wood pellets on a single boiler• Focus on electrifying its operations wherever it can, including
replacing LPG powered forklifts with electric versions• Use of life cycle analysis (LCA) to evaluate lower emissions
product packaging options; and• Aiming to divert 99% of non-hazardous manufacturing waste
away from landfill by 2028

45

2020

ESG PRESENTATION &ESG REFERENCE PACK—HUMAN RIGHTS & MODERN SLAVERYREVIEWING OUR APPROACH TO HUMAN RIGHTS
We are acting on the Australian National Contact Point (ANCP) statement of the parties; And have a program of work
to improve our policy, process and disclosure.
WE ARE COMMITTED TO THE ANCP AGREEMENT BETWEEN ANZ AND EXTERNAL STAKEHOLDERS• In February 2020 ANZ, Inclusive Development International (IDI) and Equitable Cambodia (EC) reached an agreement on how to assist
Cambodian communities that were adversely affected by an economic land use concession granted for a sugarcane project.
• We acknowledge the due diligence on the project funded by its loan was inadequate and recognise the hardships faced by the affected
communities.
• The agreement includes:• A contribution by ANZ of the gross profit it earned from the loan to help alleviate the hardships faced by the affected communities andsupport their efforts toward rehabilitation.
• A commitment by ANZ to review and strengthen its human rights policies, including its customer social and environmental screening
processes, and specific grievance mechanism accessible to affected communities.
• Both these commitments are in progress with external stakeholders.
WE ARE REVIEWING OUR APPROACH AND DESIGNING A GRIEVANCE MECHANISM FOR COMMUNITIES• We are engaged with external stakeholders to align our human rights approach with the OECD Guidelines on Multinational Enterprises
and the UN Guiding Principles on Business and Human Rights.
• We recognise that individuals and communities can be affected by our business activities, and also those of our business customers.
• We are designing a grievance mechanism so that individuals and communities affected by our business customers can contact us. We
plan to finalise it in 2021.
• We will also increase our human rights disclosures in 2020.
47

OUR RESPONSE TO THE AUSTRALIAN MODERN SLAVERY ACTANZ will report against the Australian Modern Slavery Act’s mandatory criteria in 2020, describing how we identify andact on key modern slavery risks in our operations and supply chain.
OUR FOCUS IN FY20 IS ON RISK ASSESSMENT, BUILDING AWARENESS, POLICY REVIEWS AND IMPROVING DUE DILIGENCE• We have reported against the UK Modern Slavery Act for the past four years, which focused on our supply chain and operations. The
Australian Act is broader and extends the work we have been doing in our supply chain to our business operations, including lending tocustomers and our investments.
• Assessing the risks of modern slavery across our business is challenging. A cross functional working group helps identify, discuss andact on potential modern slavery risks across our operations and supply chain.
• We have existing processes in place to help identify where modern slavery risks could be and how we can respond. These include
financial crime transaction monitoring, customer due diligence, and screening of high risk products and services in our supply chain.
• New actions we’ve taken seek to build on this approach. For example all employees are required to complete our Mandatory Financial
Crimes Learning module that covers a modern slavery case study; building awareness of modern slavery through information sessions;high risk product tracking in our supply chain identifying raw materials included in branded promotional items.
WE PLAN TO IMPROVE OUR APPROACH IN FY21, BY FOCUSING ON:• Improving our risk assessment process• Targeted engagement with customers in potential ‘hot spots’ in our Commercial business• Industry typology/indicators for modern slavery• Continued supply chain tracking• Building awareness and training for our staff• Reviewing the effectiveness of relevant policies and programs in responding to modern slavery.
48

ADDITIONAL INFORMATIONANZ SHAREHOLDER WEBSITE: https://www.anz.com/shareholder/centre/

Royal Commission &COVID-19 update

Corporate Overview &Sustainability

AASB9

Update on implementation of

Progress against our Environment,

AASB9 overview and stages

Hayne recommendations andSocial & Governance (ESG) targets

response to COVID-19 pandemic
https://www.anz.com/shareholder/cen
tre/investor-toolkit/

https://www.anz.com/shareholder/cen
tre/reporting/sustainability/

https://www.anz.com/shareholder/cen
tre/investor-toolkit/

49

FURTHER INFORMATIONOur Shareholder informationanz.com/shareholder/centre/

Equity Investors

Jill Campbell

Cameron Davis

Retail Investors

Debt Investors

Michelle Weerakoon

Scott Gifford

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

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

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

Harsh Vardhan

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

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

DISCLAIMER & IMPORTANT NOTICE: The material in this presentation is general background information about the Bank’s activities current 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 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 beconsidered, with or without professional advice when deciding if an investment is appropriateThis presentation may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to ANZ’sbusiness and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices.
When used in this presentation, the words “estimate”, “project”, “intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they relate to
ANZ and its management, are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Such statements constitute “forward-looking statements” for the purposes of the United States Private
Securities Litigation 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.

50