2022
APPROACH TO CLIMATECHANGEINVESTOR REFERENCE PACK
25 NOVEMBER 2022

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

ANZ 2022 Approach to Climate Change Investor Reference PackDISCLAIMER & IMPORTANT NOTICEThis presentation should be read in conjunction with ANZ’s 2022 Climate-related Financial Disclosures report available here:
https://www.anz.com.au/about-us/esg/environmental-sustainability/climate-change/
The material in this presentation is general background information about ANZ’s activities current as at the date of the presentation. It is
information given in summary form and does not purport to be complete. It is not intended to be and should not be relied upon as advice toinvestors or potential investors and does not take into account the investment objectives, financial situation or needs of any particularinvestor. These should be considered, with or without professional advice when deciding if an investment is appropriate.
This presentation may contain forward-looking statements or opinions including statements regarding our intent, belief or current expectations
with respect to ANZ’s business operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions
and risk management practices. When used in this presentation, the words ‘forecast’, ‘estimate’, ‘project’, ‘intend’, ‘anticipate’, ‘believe’, ‘expect’,‘may’, ‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’, ‘could’, ‘should’ and similar expressions, as they relate to ANZ and its management, are intended to
identify forward-looking statements or opinions. Those statements: are usually predictive in character; or may be affected by inaccurate
assumptions or unknown risks and uncertainties; or may differ materially from results ultimately achieved. As such, these statements should not
be relied upon when 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 UnitedStates Private Securities Litigation Reform Act of 1995. ANZ does not undertake any obligation to publicly release the result of any revisions tothese forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

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ANZ 2022 Approach to Climate Change Investor Reference Pack

CONTENTSOVERVIEWOur progress in aligning our lending to the Paris goals
ENVIRONMENTAL SUSTAINABILITY

Supporting our customers and steering our portfolio
CLIMATE RISK
More finance for customers on the right path
STAKEHOLDER ENGAGEMENT
Customer engagement to support emissions reductions
ADDITIONAL REFERENCE MATERIAL

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9
20
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25

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ANZ 2022 Approach to Climate Change Investor Reference Pack

ACCELERATING OUR APPROACH FOR THE TRANSITION TO NET ZERO
Today we are accelerating our support for the transition to net zero:•

We have set a new $100 billion by 2030 sustainable solutions target to back our customers lowering their carbon emissions
and achieving improved sustainability outcomes (FY23–FY30). This will be periodically reviewed and revised to ensure it
continues to match our ambitiono

For our largest emitters with good transition plans - around 60 per cent of this group - this means more financeo

To assist further, we will focus on financing corporate customers’ energy efficiency plans to reduce their energy costs•

We will align our lending to four new sectoral pathways and targets in oil & gas, aluminium, cement and steel. These are in
addition to our two existing pathways and targets for power generation and large-scale commercial property; by the end of
November we’ll have targets for six priority sectors•

For our largest emitting business customers who have not improved their transition plans by 2025, after significant
engagement, we will reduce our exposure

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ANZ 2022 Approach to Climate Change Investor Reference Pack

PROGRESS IN ALIGNING OUR LENDING TO THE PARIS GOALS•

Our pathways, targets and reporting demonstrate how we are aligning our lending to the Paris Agreement goals•

We were the first Australian bank to join the Net-Zero Banking Alliance (NZBA) in 2021 and set emissions intensity pathways
and targets - for power generation and large-scale commercial real estate. In doing so, we became one of 19 banks globallyto set targets ahead of schedule•

We are on track to set 2030 targets for nine priority sectors – with six set as of today – aimed at ensuring at least 75% of ourportfolio emissions are on a net zero pathway by end 2024•

Other priority sectors are well progressed. Our direct exposure to thermal coal mining has reduced by ~83% since 2015; ourexposure is now less than 0.02% of Group exposure at default (EAD). And we are on track to exit all direct lending to thermal
coal mining1 well ahead of our 2030 target•

Our Climate Change Commitment sets out our “more finance for customers on the right path” targets, available atanz.com.au/about-us/esg/environmental-sustainability/climate-change/•

We will back customers that have the right plans and commitments in place•

Our disclosure is TCFD2-aligned and our target setting guided by the Partnership for Carbon Accounting Financials (PCAF)
standard•

Our 2022 Climate-related Financial Disclosures report and Financed Emissions Methodology are available at anz.com.au/aboutus/esg/reporting/1.

Excluding some residual exposures to rehabilitation bonds as per our policy

2.

Taskforce on Climate-related Financial Disclosures

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ANZ 2022 Approach to Climate Change Investor Reference Pack

SUPPORTING OUR CUSTOMERS AND STEERING OUR PORTFOLIO
Ambition to be the leading Australia and New Zealand-based bank in supporting customers to transition to net zero
emissions
Key priority areas and sectors we will pursue

Banking thedecarbonisationand electrificationof thetransportation
value chain

Increasing our
support forcompanies totransition
to low
carbon

1.
2.
3.
4.
5.

Supporting
sustainability inresource extraction¹,
basic materials² andnew technologies³
Enabling thetransition
towards lower
emissionsbuildings⁴

Offering
solutions to, andpartnering with,sustainability-focusedfinancial institutions⁵

Assistingsustainable
food, beverage andcommodities
practices andsupply chains

Supporting sustainable resource extraction in areas such as iron ore, lithium, nickel, cobalt, rare earths, copper and bauxite
Supporting basic materials production including green steel and low-carbon aluminium production
Supporting new technology projects focused on upstream hydrogen and carbon capture use and storage
Initial focus on financing high-efficiency residential buildings and retrofits
Supplying green investment options for environmental sustainability-focused funds/insurers and partnering with financial institutions to deliver alternative capital5

ANZ 2022 Approach to Climate Change Investor Reference Pack

ANZ’S CAPABILITY IN FINANCING SUSTAINABILITY
GREEN, SOCIAL, SUSTAINABILITY,SUSTAINABILITY-LINKED AND TRANSITIONLOANSGREEN, SOCIAL, SUSTAINABILITY,SUSTAINABILITY-LINKED AND TRANSITIONBONDSGREEN AND SUSTAINABLE
INFRASTRUCTURE PROJECT FINANCE

ANZ/CLEAN ENERGY FINANCECORPORATION ENERGY EFFICIENCY ASSETFINANCE PROGRAM

Lending to deploy capital into green
and social initiatives, where borrowers
are required to invest in qualifying
green and/or social assets or where
loan terms are linked to improved
performance against agreed
sustainability performance targets

Distribution of capital into green,social, transition and sustainability
initiatives, e.g. green buildings,
renewable energy or where bondterms are linked to improved
performance against agreed
sustainability targets

Project financing to support
thedevelopment of long-termsustainable infrastructure

Financing that incentivises small-tomedium sized business customers toinvest in energy efficient and renewableenergy technologies that will help
reduce their energy costs and carbon
emissions

Spotlight on Sustainable Finance
Sustainable Finance volumes

Sustainable Finance transactions1, #AUD365bn+57%

Total volume (AUD equivalent) of sustainable finance transactions1 since 2015
including Green, Social, Sustainability, Sustainability-Linked and Transition Bonds, Loans,
Trade Finance and Derivatives, across Australia, New Zealand, Asia, Europe/UK and America
in AUD, NZD, USD, SGD, CNH, HKD, JPY, GBP and EUR

AUD5.2bn

ANZ as an Issuer has raised AUD5.2b (AUD equivalent)
including AUD600m Green Bond (May 2015), EUR750m Sustainability (SDG) Bond (Feb 2018)
EUR1.0bn Sustainability (SDG) Bond (Nov 2019), AUD1.25bn Sustainability (SDG) Bond (Aug2020), EUR750m Sustainability (SDG) bond (Jan 2021)

All data current as at 30/09/2022
1. Institutional labelled products only

127
81
39

FY20

FY21

FY22

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ANZ 2022 Approach to Climate Change Investor Reference Pack

ANZ’S $50 BILLION SUSTAINABLE SOLUTIONS TARGET
Helping improve the environmental sustainability of customers
We remain committed to our existing target to fund and facilitate at least AUD50 billion by 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,
which we are on track to exceed
That is why we are setting a new 8 year AUD100 billion by 2030 sustainable solutions target to back our customers lowering their carbon emissions andachieving improved sustainability outcomes (FY23–FY30). This will be periodically reviewed and revised to ensure it continues to match our ambition.
FY22 progress1• We have funded and facilitated AUD40.04 billion since October 2019, with 332 transactions contributing towards 10 Sustainable Development Goals• AUD25.8 billion of transactions are on balance sheet loans and other credit lines provided to borrowers by ANZ• AUD14.2 billion have been facilitated, including through advisory services; ESG-format bonds; and loans initially underwritten by ANZ andsubsequently sold on to other lenders

Facilitated3

Funded2
Sustainability-Linked facilities
Affordable Housing
Other Social

ESG-format Bonds

EnergyAUD25.8bn(Sep-22)

Transport
Green Building
Water

AUD14.2bn(Sep-22)

Advisory
Green Buildings / Renewable Loan Distribution

Waste
Info. & Communication Technology
Environmental Markets

1.
2.

3.

This information has been independently assured by KPMG as part of the 2022 ESG Supplement and 2022 ESG Supplement Data Pack assurance engagement.
Energy: includes Wind/Solar/Battery/Transmission Infrastructure/Energy Transition/Energy Efficiency. Transport: low carbon transportation projects such as light rail, electric vehicle manufacturing. Environmental markets: corporateloans for businesses in environmental/carbon project development which facilitate the transition to net zero or create nature positive outcomes. Information & Communication Technology: networks, management andcommunication tools which facilitate the transition to net zero, e.g. power management, broadband. Sustainability-linked Facilities: corporate loans to borrowers across multiple industry sectors where terms are linked to improved
performance against agreed environmental and/ or social targets that reflect the borrower’s material sustainability risks, e.g. emissions reduction, increased renewable energy consumption, labour force diversity. Other Social: includes
credit lines to global development banks and agencies providing support to emerging economies, and social component of Sustainability Loans.
ESG-format Bonds: Green, Social, Sustainable, Sustainability-Linked and Transition Bonds and other ESG-related bonds within the sustainable finance market. Green Buildings/Renewable Loan Distribution: loans initially underwritten
by ANZ and subsequently sold on to other lenders, e.g. other banks, fund managers and super funds.

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ANZ 2022 Approach to Climate Change Investor Reference Pack

MANAGING CLIMATE RISK
Actively managing climate risk within our group risk management framework
The risks and the opportunities of climate change• Engaging with our largest emitting business customers on the work they’re doing to transition to a low carbon future• Understanding significant reductions in the cost of energy• Understanding how the transition to net zero emissions will impact global demand for natural resources and the flow-on effects to prices• Engaging with regulators and industry on climate-related policies and guidance for banks and financial institutions

Recent actions to actively manage climate risk
We continue to improve our management of climate risks through workstreams focused on regulatory monitoring, policy governance, risk appetite, data and analytics. This year
we focused on:• reviewing and assessing current and emerging regulatory requirements across the jurisdictions in which we operate;• refining our Risk Appetite Statements for Institutional and included climate risk in lending criteria documents in the Australia Retail, Commercial and New Zealandportfolios; and• participating in APRA’s Climate Vulnerability Assessment
Our next steps involve:• developing a data strategy to help us identify and source reliable data to improve how we manage climate risks;• ensuring we have a consistent approach to meet evolving regulatory requirements across the jurisdictions in which we operate; and• extending our Climate Change Risk Assessment process to Institutional customers in higher emitting sectors including resources and energy – this is currently being piloted
in Project Finance.

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ANZ 2022 Approach to Climate Change Investor Reference Pack

MORE FINANCE FOR CUSTOMERS ON THE RIGHT PATH
Absolute emissions and emissions intensity targets set our pathways•

Our pathways set our strategy and course out to net zero by 2050 and use credible decarbonisation scenarios•

The pathways allow us to:o Determine how each sector is performing against a Paris-aligned patho Better pinpoint and manage customers that may be more exposed to transition risks; and help them to capture
the growing opportunities that come with the transitiono Assess the speed and extent to which we are transitioning our exposure to key sectors

o Provide transparency about how our financing is aligned with climate scenarios•

We will use these pathways to steer our lending decisions in line with the Paris Agreement goals•

We expect the transition is likely to be uneven – and there will be challenges in some sectors more than others

9ANZ 2022 Approach to Climate Change Investor Reference Pack

FINANCE TO BACK CUSTOMERS ON THE RIGHT PATH
New targets set for four carbon intensive sectors
We have set a new absolute emissions reduction target for oil and gas

Oil and Gas1

Oil and Gas
Absolute Emissions (Mt CO2-e)

NEW TARGET:

18

26% absolute emissions reduction by 2030

16

• A variety of opportunities exist for the oil and gas sector to
reduce emissions across the value chain• A priority for oil and gas companies is to minimise methaneleaks through a focus on leak detection and repair• Over time we will weight our financing to customers withstronger emissions reduction targets and diversification
strategies

ANZ vs. target pathway
+7% ⚫

14
12
10
8
6
4
2
0
2020

2025

2030

2035

2040

2045

2050

Actual Performance
IEA Net Zero Emissions 2050 Pathway
2030 Target (-26%)
1.

We measure the portfolio emissions for the oil and gas sector using an ‘absolute emissions’ approach. We assess financed emissions on an ‘all products’ basis. Refer to ANZ’s Financed
Emissions Methodology for detail⚫ >10% above the pathway⚫ <10% above pathway⚫ Below pathway

10

ANZ 2022 Approach to Climate Change Investor Reference Pack

FINANCE TO BACK CUSTOMERS ON THE RIGHT PATH
New targets set for four carbon intensive sectors
We have set a new emissions intensity reduction target for aluminium

Aluminium1
NEW TARGET:
30% emissions intensity reduction by 2030
• The opportunity for decarbonisation for the aluminium sector
is significant and is focused on a switch to renewable energy

Aluminium
GHG2 Intensity (tCO2-e/t aluminium)
12108• Efforts to decarbonise the grid will be necessary for
decarbonisation of the aluminium sector

6• Our 2021 portfolio baseline of 8.30 tCO2/tonne aluminium isbelow the 2021 global average of 10.29 tCO2/tonne aluminium

4• Over time we will weight our lending to customers withstronger emissions targets

ANZ vs. target pathway-4.8% ⚫

2
0
2020

2025

2030

2035

2040

2045

2050

Actual Performance
International Aluminium Institute 1.5 pathway
2030 Target (-30%)
Global average International Aluminium Institute 1.5 pathway
1.

We measure the portfolio emissions in the aluminium sector on an ‘emissions intensity’ basis. Refer to ANZ’s Financed Emissions Methodology for detail2.

Greenhouse gas emissions (GHG)⚫ >10% above the pathway⚫ <10% above pathway⚫ Below pathway

11

ANZ 2022 Approach to Climate Change Investor Reference Pack

FINANCE TO BACK CUSTOMERS ON THE RIGHT PATH
New targets set for four carbon intensive sectors
We have set a new emissions intensity reduction target for cement

Cement1

CementGHG2 Intensity (tCO2-e/t Cement)

NEW TARGET:

0.7

20% emissions intensity reduction by 2030

0.6

• The opportunity for decarbonisation for the cement sector will
rely on substituting clinker for alternate cementitious materials• Industry bodies have articulated the need for carbon capture,utilisation and storage becoming commercially viable tocapture emissions from the chemical reaction of limestone toachieve net-zero by 2050 for the industry• Our 2021 portfolio baseline of 0.61 tCO2/tonne cement ismarginally above the 2021 global average of 0.59 tCO2/tonne
cement• Over time we will weight our lending to customers withstronger emissions targets

ANZ vs. target pathway-2.5% ⚫

0.5
0.4
0.3
0.2
0.1
0.0
2020

2025

2030

2035

2040

2045

2050

Actual Performance
IEA Net Zero Emissions 2050 Pathway
2030 Target (-20%)
Global average IEA tracking report 22

1.

We measure the portfolio emissions in the cement sector on an ‘emissions intensity’ basis. In line with the 2022 SBTi Cement Guidance, when we refer to our intensity target in tCO2-e/t cement, wehave actually set an intensity target per tonne of ‘cementitious product’ rather than per tonne of ‘cement’. Refer to ANZ’s Financed Emissions Methodology for detail2.

Greenhouse gas emissions (GHG)⚫ >10% above the pathway⚫ <10% above pathway⚫ Below pathway

12

ANZ 2022 Approach to Climate Change Investor Reference Pack

FINANCE TO BACK CUSTOMERS ON THE RIGHT PATH
New targets set for four carbon intensive sectors
We have set a new emissions intensity reduction target for steel

Steel1
NEW TARGET:

Steel
GHG2 Intensity (tCO2-e/t Steel)
2.5

ANZ vs. target pathway+5.9% ⚫

28% emissions intensity reduction by 2030
• The opportunities for carbon emission reductions for the steel
sector are well defined, however the technologies facilitatingthese reductions are not yet commercially available and will
require ‘breakthrough technologies’ such as carbon capture
utilization/storage or direct reduction of iron-ore using
renewable energy• Our 2021 portfolio baseline of 1.90 tCO2-e/tonne steel is inline with the 2020 global average of 1.89 tCO2-e/tonne steel• Over time we will weight our lending to customers withstronger emissions targets.

2.0
1.5
1.0
0.5
0.0
2020

2025

2030

2035

2040

2045

2050

Actual Performance
IEA Net Zero Emissions 2050 Pathway
2030 Target (-28%)
World Steel 2020 average emissions intensity
1.

We measure the portfolio emissions in the steel sector on an ‘emissions intensity’ basis. Refer to ANZ’s Financed Emissions Methodology for detail⚫ >10% above the pathway⚫ <10% above pathway⚫ Below pathway

13

ANZ 2022 Approach to Climate Change Investor Reference Pack

PROGRESS TOWARDS OUR PORTFOLIO EMISSIONS TARGET PATHWAYS – LARGE-SCALECOMMERCIAL BUILDINGSWe set emissions intensity reduction targets for large-scale commercial buildings in 2021

Large-scale commercial property
EXISTING TARGET:
60% emissions intensity reduction by 2030 for major commercial
buildings in Australia owned by our large REIT and funds customers• We will finance the opportunities for faster and deeper cuts in emissions
presented by: improved energy efficiency; greater electrification of final
energy use; voluntary purchases of green electricity; and self-generation ofelectricity from solar PV installations• Major customers have already committed to achieving net zero emissions
targets by 2030 and are making good progress, investing in renewableenergy, the electrification of building infrastructure and energy efficientmeasures

Commercial Real Estate - Shopping Centres
GHG1 Intensity, kg CO2-e/m2NLA (Net Lettable Area)
60

40
20
0

National Australian Built Environment Rating Scheme

2035

2030 Target (-60%)

2040

2045

2050

IEA Beyond 2°C Scenario (B2DS) Alignment Pathway

ANZ vs. target pathway- 26% ⚫

80

20

2.

2030

GHG1 Intensity, kg CO2-e/m2NLA (Net Lettable Area)• Portfolio emissions intensity in the Commercial Building sector continues
to reduce and we are below our 2030 target pathways

Greenhouse gas emissions (GHG)

2025

Commercial Real Estate - Office Buildings

60

1.

2020

Actual Performance• Building assets covered by the target represent around 20–25% of our
total exposures to the non-residential building sector• All new large-scale offices financed by ANZ in the commercial building
sector are required to have a 5-star NABERS2 rating or above

ANZ vs. target pathway- 12% ⚫

80

40

0

2020

2025

Actual Performance

2030

2035

2030 Target (-60%)

2040

2045

2050

IEA Beyond 2°C Scenario (B2DS) Alignment Pathway⚫ >10% above the pathway⚫ <10% above pathway⚫ Below pathway

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ANZ 2022 Approach to Climate Change Investor Reference Pack

PROGRESS TOWARDS OUR PORTFOLIO EMISSIONS TARGET PATHWAYS – POWER GENERATION
Financial challenges of a changing energy sector• Wholesale electricity prices increased to record highs in parts of Australia earlier this year. Electricity companies routinely hedge the price of their
future energy generation on the ASX electricity futures market, to mitigate against price fluctuations• Due to these record high wholesale prices, companies using the electricity futures market, including some existing ANZ customers, faced unusuallyhigh margin calls on their existing hedge contracts – requiring them to post cash collateral to margin accounts to cover these positions• We have observed similar developments internationally this year. In the UK, the ‘Energy Markets Financing Scheme’1 is designed to support viableenergy firms with major operations in the UK to deal with the unprecedented volatility triggered by Russia’s invasion of Ukraine. These firms will beable to apply for government-backed guarantees to secure commercial financing and meet large margin calls from energy price volatility• In August 2022, the Australian Energy Market Operator2 forecasted electricity reliability concerns over the next 10 years, with urgent investment inelectricity generation, storage and transmission required• Within this context, our challenge is to finance the new green energy infrastructure required to help achieve net zero emissions, while ensuringexisting providers - which are making these investments - are supported while this new infrastructure is being built. These companies serve
important roles in the supply and stability of the energy market while the broader operating environment transitions in line with the Paris
Agreement goals

1.

Energy Markets Financing Scheme opens today | Bank of England

2.

AEMO | Critical investment needed to manage reliability gaps

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ANZ 2022 Approach to Climate Change Investor Reference Pack

PROGRESS TOWARDS OUR PORTFOLIO EMISSIONS TARGET PATHWAYS – POWER GENERATIONWe set an emissions intensity reduction target for power generation in 2021

Power Generation

Power generation
GHG1 Intensity (kg CO2/MWh)

EXISTING TARGET:

500

50% emissions intensity reduction by 2030
for our global power generation portfolio

400• We know decarbonising will require an increase in electricity generation. The challenge
will be to meet that demand growth with clean energy sources – our target we set in2021 seeks to meet this by influencing the types of customers and projects we support

300• Our 2030 target of 119kgCO₂/MWh is a portfolio average. The target is set against a2020 baseline of ~240kg CO₂/MWh

200• To ensure the ongoing completeness, accuracy and consistency of our reporting, we arerestating our 2020 emissions intensity baseline. This is due to improvements in ourability to identify generation asset(s) that our financing is linked to100• Engagement with power generation customers is focused on how they intend to
reduce the emissions intensity of power supplied to their customers• The emissions intensity of our Power Generation portfolio increased this year due toshort term financing for existing customers to manage unprecedented energy market
volatility. This does not translate to an increase in ‘real world’ emissions, as they areexisting customers and assets• We remain committed to our 2030 target pathway and remain well below the IEA Net
Zero Emissions by 2050 Scenario pathway
1.

Greenhouse gas emissions (GHG)

ANZ vs. target pathway+ 47% ⚫

02020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Actual Performance
IEA Net Zero Emissions by 2050 Pathway
2030 Target Pathway⚫ >10% above the pathway⚫ <10% above pathway⚫ Below pathway

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ANZ 2022 Approach to Climate Change Investor Reference Pack

BACKING CUSTOMER DECARBONISATION
Illustrative examples of customer pathways that align with our portfolio targets

Paris-aligned
targets set theirpath

OIL AND GASALUMINIUM“Oil and Gas Company Corp.”“Aluminium Company Corp.”

In 2021: Announced intention to be a net zero energy company by2050 or sooner (covering full life cycle of energy products)

In 2021: Disclosed science-based GHG emissions intensity reduction
targets• Current emissions intensity 6.0 tCO₂-e/t aluminium

By 2030: Reduce absolute Scope 1 & 2 emissions by 50%; Reduce
absolute Scope 3 emissions (use of sold product) by 40%• 80% reduction emissions in methane emissions• Eliminate routine gas flaring by 2025
By 2050: Aiming for net zero across operations, production and sales
by 2050 or sooner

Examples ofParis-aligned
investments

Company increasingly invests in:• Minimizing methane leaks through a focus on leak detection andrepair
• Avoidance of non-emergency flaring and venting• Electrification of upstream operations• Diversifying portfolios into cleaner energy technologies such as
renewable electricity, hydrogen, biofuels and biogases etc• Capture and permanent storage of remaining emissions orbalancing them with credible offsets

By 2030: Reduce emissions intensity by 40%• Target of 3.6 tCO₂/t aluminium
By 2050: Achieve net zero emissions

Company increasingly invests in:• Switching to renewable energy in conjunction with global trend
towards grid decarbonisation• Research and development into low/no carbon anodes

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ANZ 2022 Approach to Climate Change Investor Reference Pack

BACKING CUSTOMER DECARBONISATION
Illustrative examples of customer pathways that align with our portfolio targets

Paris-aligned
targets set theirpath

CEMENT

STEEL“Cement Company Corp.”“Steel Company Corp.”

In 2021: Disclosed science-based GHG emissions intensity reduction
targets• Current emissions intensity 0.68 tCO₂-e/t cement

In 2021: Disclosed science-based GHG emissions intensity reduction
targets• Current emissions intensity 3.0 tCO₂-e/t steel

By 2030: Reduce emissions intensity by 20%• Target of 0.54 tCO₂-e/t cement

By 2030: Reduce emissions intensity by 33%• Target of 2.0 tCO2-e/t steel• Increased steel recycling and use of renewable energy

From 2030 to 2040: Upscaling and commercialisation of Carbon
Capture utilization and storage (CCUS) projects
By 2050: Achieve net zero emissions

From 2030 to 2040:• Upscaling and commercialisation of CCUS and green steel
production
By 2050: Achieve net zero emissions

Examples ofParis-aligned
investments

Company increasingly invests in:• Plant retrofit and upgrade to take on alternative fuels• Increased supplementary cementitious product• Research and development into carbon capture and storage
technology

Company increasingly invests in:• Switching to renewable energy in conjunction with global trend
towards grid decarbonisation• Efficiency upgrades and retrofits• Steel recycling• Research and development into CCUS technology and direct
reduction of iron-ore without the use of fossil fuels
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ANZ 2022 Approach to Climate Change Investor Reference Pack

BACKING CUSTOMER DECARBONISATION
Illustrative examples of customer pathways that align with our portfolio targets

Paris-aligned
targets set theirpath

Examples ofParis-aligned
investments

1.

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

In 2020: Disclosed Paris-aligned plans and decarbonisation strategy

In 2020: Disclosed science-based GHG emissions intensity reduction
targets• Current emissions intensity 630kg CO₂/MWh

By 2025/2030• Low carbon fuel alternatives for machinery• Require min. NABERS¹ 5-star energy rating on offices• Suppliers to reduce emissions from building materials

By 2030: Reduce emissions by 50%• Target of 315kg CO₂/MWh

By 2040/2050: Reach net zero emissions• All green leases for tenants• Renewable energy tariffs• Zero operational emissions• Phased out diesel and gas

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

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

To aid transition, company develops lower-emission base load
alternatives to coal fired generation which is being progressively
retiredNational Australian Built Environment Rating System

By 2050: Achieve net zero emissions

Company increasingly invests in:• Large-scale renewables and energy infrastructure including windand solar farms• Electricity storage technologies such as batteries and pumped
hydro (long duration storage)
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ANZ 2022 Approach to Climate Change Investor Reference Pack

CUSTOMER ENGAGEMENT TO SUPPORT EMISSIONS REDUCTIONS
100 of our largest emitting business customers•

Among our Australian banking peers, we have the most advanced
engagement process with our largest emitting business customers•

We have been discussing transition plans with 100 of our largest emitting
business customers since 2018, we broadened this to our customers
efforts to protect biodiversity in 2022•

In FY22 we engaged with 99 of our largest emitting business customers•

61% of these customers now have well developed or advanced transition
plans versus 42% by end FY21•

Overall good progress is being made, with 29 customers upgraded since
FY21•

We consider three key elements constitute a robust low carbon transition
plan:

•

1.

o

governanceotargetsodisclosures (preferably aligned with the Taskforce on Climate-related
Financial Disclosures)

These customers produced more than 147 million tonnes of direct (Scope
1) CO2 emissions during 2020–21 for their Australian-based operations.
This is around 30% of the national total for Australia

100 of our largest emitting business customers
by transition plan category1
38

36

27

27

23

22

15
11

A

B

A - ADVANCED
B - WELL DEVELOPEDC- UNDERDEVELOPED / STARTING OUT
D - NO PUBLIC PLANSC

D
Sep 2021
Sep 2022

We replaced six customers in 2022 due to exits or significantly reduced exposures, or due to mergers and acquisition activities. Replacements on this list are typically from a similar sector, located in the same country or region, asimilar level of exposure and emissions and at a similar stage of their transition planning

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ANZ 2022 Approach to Climate Change Investor Reference Pack

CUSTOMER ENGAGEMENT TO SUPPORT BIODIVERSITY PROTECTION
100 of our largest emitting business customers
100 of our largest emitting business customers
biodiversity status1••••

Biodiversity risk is recognised across our ‘sensitive sector’ lending
policies
It is a focus area acknowledged in our Climate Change
Commitment and as an emerging risk in our Annual Report
Biodiversity has this year also been included in discussions with
our largest emitting business customers
Discussion to date have been positive - with increased customer
awareness and improvements in the way they measure impacts of
their business on nature and vice versa•

Engagement is helping refine our screening, improving ourknowledge, enhancing capacity to further engage•

We have joined the TNFD2 Forum to support their work. They
play an important role in driving widespread and improved
disclosures of biodiversity impacts

Customers
100
90
80

76

70
58

60

50

50
40
30

20
10
0

Governance
Customers Engaged

1.
2.

Targets,
policies or
strategies

Disclosures

We replaced six customers in 2022 due to exits or significantly reduced exposures, or due to mergers and acquisition activities. Replacements on this list are typically from a similar sector, located in the same country or region, asimilar level of exposure and emissions and at a similar stage of their transition planning
Taskforce on Nature-related Financial Disclosures

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ANZ 2022 Approach to Climate Change Investor Reference Pack

SEEKING IMPROVED TRANSITION PLANS FROM SOME CUSTOMERS
100 of our largest emitting business customers
Good progress, more work to be done
• Within each industry our customers have different starting points. Many have improved their governance, strategies, targets and disclosures toadvance their transition planning• In FY22 there were ~60% of customers with more advanced plans. Up from ~40% in FY21
• We provide support with insights into enhanced customer practices. We encourage those further advanced to find ways to strengthen theirapproach and provide options for how we could potentially assist, including setting ‘stretch’ targets linked to improved financing terms• We expect our new 8-year sustainable solutions target of $100bn by 2030 will further assist our largest emitting customers to invest in emissions
reduction. We will continue to prioritise our support for customers who are committed to improving their plans• This support will also focus on customers in the C and D categories. We are seeking improved plans from these businesses by 2025 and will increase
our engagement to encourage further progress• While we will aim to support C and D category customers to improve, if significant engagement doesn’t see positive momentum we will reduce our
exposure

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ANZ 2022 Approach to Climate Change Investor Reference Pack

PROGRESS WITH OUR 100 LARGEST EMITTING BUSINESS CUSTOMERSExamples of improvement through categories(A) ADVANCED(B) WELL DEVELOPED(C) UNDERDEVELOPED /STARTING OUT(D) NO PUBLIC PLANS

ENERGY COMPANY

DIVERSIFIED INDUSTRIAL
COMPANYLARGE COMMODITIES COMPANY

LARGE RETAILER

Governance

Governance

Governance

GovernanceTargets

Targets

Targets

Targets

Disclosures

Disclosures

Disclosures

Disclosures

CUSTOMER• Acknowledges climate risk is a material
risk and opportunity; has welldeveloped plans and actions (byreference to their governance, targets,disclosures, and committed to net zero
emissions by 2050)• Climate resilience is a key pillar of its
sustainability strategy• Public goal of net zero emissions by
2050 across its portfolios• Strong governance in place to manage
climate risk
• TCFD1-aligned reporting

CUSTOMER• At a well developed stage with welldeveloped plans and actions• Public climate change commitment;
climate issues are considered by
Sustainability Management Committeethat report to their Board• 2030 emissions reductions targets inplace• A long-term vision of striving for net
zero by 2050
• Reports using the TCFD guidelines,
scope to improve

CUSTOMER• At an underdeveloped/starting out
stage: acknowledgement, but withlimited plans and/or actions• Sustainability and climate risk
discussed with Board Risk Committee
at regular intervals; Chairman and CEO
oversee their climate approach• Has targets to reduce ‘emissions
intensity’ across some of its operations• Moving towards TCFD-aligned
reporting; has a ‘TCFD index’ in its
reporting2

CUSTOMER• No public plans evident; however, isestablishing an Executive Sustainability
Committee which will provide greater
oversight• Developing sustainability projects at abusiness and franchisee level• Has engaged an external consultant tohelp develop a sustainability
framework• Acknowledges the need to develop atransition plan, though unclear at thisstage whether it will be made public• Has not reported against TCFD

In place / met
In progress
1.

Taskforce on Climate-related Financial Disclosures

2.

Others in category C may be reporting against TCFD, with uplift required in key areas such as governance, metrics and targets

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ANZ 2022 Approach to Climate Change Investor Reference Pack

PROGRESS WITH OUR 100 LARGEST EMITTING BUSINESS CUSTOMERSExamples of improvement through categories
INDUSTRIAL COMPANY
During our engagement, customer has moved up from Category D to Category B
GovernanceTargets

Disclosures
CUSTOMER•

The customer is at a well developed stage with clearly defined plans and actions that have evolved significantly since 2021•

A clear governance framework is in place, outlining senior management oversight of climate change and nature-related risks and opportunities. Issues and opportunities
are considered by the Environmental Policy and Risk & Sustainability Committee•

Public targets and strategies are in place to reduce emissions and support government policies up to 2030 in key markets. Metrics and targets have been set to assess andmanage impacts and dependencies on nature and associated risks and opportunities•

First TCFD report published in 2021 Annual Report, including a pathway disclosure and a commitment to have Scope 1 & 2 emissions reduction target independently
validated by the Science Based Targets Initiative

In place / met

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ANZ 2022 Approach to Climate Change Investor Reference Pack

OUR ESG RELATED DISCLOSURESESG Supplement
ESG
information& progressagainst our
ESG targets
https://www.anz.com.au/aboutus/esg/reporting/esg-reporting/

Human Rights
Our
approachtohumanrightshttps://www.anz.com.au/aboutus/esg-priorities/fairresponsible-banking/humanrights/

ESG Briefing
Annualevent tobrief
investors on
ESG matters
https://www.anz.com/content/dam/anzc
om/shareholder/2022-ESGinvestor-presentation-andreference-pack.pdf

Housing
ANZ-CoreLogic
Housing
Affordability
Report, the preeminent guide totrends & driversof housing
affordability
across Australia
https://www.anz.com.au/about-us/esgpriorities/housing/

Climate Change Disclosures
Climate changecommitment
and climate
related financial
disclosures
https://www.anz.com.au/aboutus/esg-priorities/environmentalsustainability/climate-change/

Financial Wellbeing
Our financial
wellbeing
programs, incl.
ANZ RoyMorganfinancial
wellbeingindicator
https://www.anz.com.au/aboutus/esg-priorities/financialwellbeing/

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ANZ 2022 Approach to Climate Change Investor Reference Pack

FURTHER INFORMATION

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

Equity Investors

Jill Campbell

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

Cameron Davis

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

Harsh Vardhan

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

Retail Investors

Debt Investors

Michelle Weerakoon

Scott Gifford

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

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

Steven Aquilina

Associate Director
Investor Relations+61 3 8654 7778
+61 447 744 542
steven.aquilina@anz.com

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