Sustainability Review 2018
2018
SUSTAINABILITY
REVIEW
CONTENTS
Our 2018 reporting suite 1
2018 sustainability snapshot 2
Chairman’s message 4
CEO’s message 5
Banking Royal Commission 6
About our business 8
Governance and risk management 9
What matters most 10
2019 sustainability targets 12
Improving culture and conduct 14
Employee wellbeing and engagement 16
Improving customer outcomes 17
Supporting vulnerable customers 19
Managing customer complaints 21
Digital transformation 23
Cyber security and data protection 25
Financial crime 27
Respecting human rights 28
Sustainable procurement 30
Responsible business lending 31
Climate change — managing risks and opportunities 35
Financing the transition to a low carbon economy 41
Reducing our environmental footprint 43
Housing 46
Financial wellbeing 49
Workplace participation and diversity 55
Supporting Indigenous Australians 60
Building an accessible and inclusive bank 62
Community investment 65
Tax transparency 69
2018 sustainability performance summary 71
KPMG limited assurance report 89
OUR 2018
REPORTING
SUITE
This report discusses our performance against our material
social, environmental and economic opportunities and challenges.
This report is structured in three sections. The first outlines how
we do business, including our purpose, values and Sustainability
Framework; our approach to the identification and prioritisation
of material issues; and governance and risk management
(including social and environmental issues). The second details
our management approach and performance relevant to
materially significant issues aligning with our Sustainability
Framework, including our priority areas of financial wellbeing,
environmental sustainability and housing. The third section
is our detailed sustainability performance data.
We have been using the Global Reporting Initiative (GRI) framework
for our sustainability reporting for more than a decade. This report has
been prepared in accordance with the GRI Standards: Comprehensive
option. A complete GRI Index is available on anz.com/cs.
We have continued to map our material issues and sustainability
targets to relevant United Nations Sustainable Development Goals
(SDGs). The 17 goals and 169 targets are aimed at solving the world’s
most pressing sustainable development challenges — ending
global poverty, protecting our planet and ensuring human rights
— over the next 15 years. Business has an important role to play
in achieving the SDGs and we recognise that stakeholders want
more granular information as to how business is contributing.
In response to stakeholder feedback, in addition to mapping the
goals, throughout the report this year we have sought to identify
the relevant SDG targets to which we are making a contribution.
This report covers all ANZ operations worldwide over which,
unless otherwise stated, we have operational control for the
financial year commencing on 1 October 2017 and ending
30 September 2018. Monetary amounts in this document
are reported in Australian dollars, unless otherwise stated.
KPMG has provided independent limited assurance in respect
of this Sustainability Review, including considering whether the
appropriate indicators have been reported in accordance with
the GRI Sustainability Reporting Standards Comprehensive level
of disclosure. A copy of KPMG’s independent limited assurance
report is on pages 89–90.
We produce a suite of reports to meet the evolving needs and
requirements of a wide range of stakeholders. This Sustainability
Review complements the 2018 Annual Review which concisely
describes how our business model, strategy, governance and
risk management processes incorporate our most material issues
and delivering value for our shareholders and other stakeholders.
It draws on aspects of the International Integrated Reporting
Framework. Our 2018 Annual Report principally details our
financial information. Both reports are available on
anz.com/annualreport.
Our 2018 Corporate Governance Statement discloses how we
have complied with the ASX Corporate Governance Council’s
‘Corporate Governance Principles and Recommendations —
3rd edition’. We also provide our Principal Risks and Uncertainties.
These documents are available on anz.com/corporategovernance.
We will continue to evolve and improve our reporting suite
over the coming years and welcome feedback on this report.
Please address any questions, comments or suggestions
to corporate.sustainability@anz.com.
The reports available for stakeholders are as follows:
1. 2018 ANZ Sustainability Review anz.com/cs
2. 2018 Corporate Governance Statement anz.com/corporategovernance
3. 2018 Annual Review anz.com/annualreport
4. 2018 Annual Report anz.com/annualreport
Other financial disclosures are available on shareholder.anz.com.
1
OUR 2018 REPORTING SUITE
people reached through our
MoneyMinded, MoneyBusiness
and Saver Plus programs since 2002
1
1.
Refer to page 88 for methodology.
2.
Global scope 1 and 2 emissions against a 2015 baseline.
3.
Includes Aboriginal and Torres Strait Islander people, people with disability and refugees.
4.
Total taxes borne by the Group, includes unrecovered GST/VAT, employee related taxes
and other taxes. Inclusive of discontinued operations.
5.
Measures representation at the Senior Manager, Executive and Senior Executive levels.
Includes all employees regardless of leave status but not contractors (who are included
in FTE).
6.
Figure includes forgone revenue of $107 million, 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.
7.
Peter Lee Associates 2018 Large Corporate and Institutional Relationship Banking surveys,
Australia and New Zealand. In New Zealand ranked against the Top 4 competitors.
8.
Roy Morgan Research Single Source, Australian population aged 14+, Main Financial
Institution, six-month rolling average to Sep’ 18. Ranking based on the four major
Australian banks.
taxes paid
4
$3,188
MILLIONHOURS
MILLION
volunteered
by employees
representation
of women in
leadership roles
5
124,113
$1371ST3RD32%
in community investment
6
Australia and New Zealand
Institutional Net Promoter Score
7
Net Promoter
Score Retail Australia
8
RANKEDRANKED
510
PEOPLE
from under-represented
groups recruited since 2016
3
reduction in
greenhouse gas
emissions
2
18%
2018
SUSTAINABILITY
SNAPSHOT
$11.5
BILLION
MORE THAN
621,000
funded and facilitated in
low carbon and sustainable
solutions since 2015
fi
ANZ 2018 SUSTAINABILITY REVIEW
CASE STUDY
FINANCIAL
WELLBEING
SUPPORTING COMMUNITIES IN DIFFICULT TIMES
This year we announced a number of relief measures to assist
farmers and communities affected by the ongoing drought
in Australia, including donations of $500,000 to Financial
Counselling Australia and $500,000 to the Foundation
for Rural and Regional Renewal (FRRR).
Natalie Egleton, CEO of FRRR said, “FRRR has worked with
ANZ over many years to support rural and regional communities
through the Seeds of Renewal grants program. This new donation
builds on ANZ’s support of those communities and enables
FRRR to provide grants to relieve the current symptoms and
stressors of drought, and to support long-term recovery.
The donation will be directed to a significant national expansion
of the existing Tackling Tough Times Together (TTTT) and Back
to School programs to support drought-affected communities
around Australia.”
Through the TTTT program, grants of up to $20,000, $60,000
and $150,000 are available for community strengthening projects
to reduce social isolation, support leadership development and
training, build capability and sustainability for local communities,
and stimulate economic activity and cash flow within communities.
The Back to School program provides $50 vouchers to students
in need, to assist in purchasing essential school supplies
(e.g. school uniforms, clothing, shoes, school bags and stationery
items) necessary to engage and participate in school.
2018 SUSTAINABILITY SNAPSHOT
3
CHAIRMAN’S
MESSAGE
DAVID GONSKI, AC
THIS SIMPLIFICATION OF OUR
BUSINESS IS CRITICAL. WE KNOW A
SIMPLER BANK IS MORE FOCUSED
AND EASIER TO MANAGE IN AN
ENVIRONMENT WHERE REGULATION
AND COMPLIANCE IS INCREASING.
WE ARE UNANIMOUS IN OUR
RESOLVE TO BUILD A COMPANY
OF WHICH WE AND ALL OF OUR
STAKEHOLDERS CAN BE PROUD.
4
ANZ 2018 SUSTAINABILITY REVIEW
Fundamental to our Sustainability Framework, which was
refreshed this year, is fair and responsible banking. We have set
a range of targets for the coming year which I believe demonstrate
our commitment to maintaining high standards of conduct and
improving outcomes for our customers.
While the needs of our customers must be our key priority,
through our focus on financial wellbeing, environmental
sustainability and housing, we are also contributing to the broader
sustainability agenda. Our work in these areas is aligned with our
purpose and business strategy, and also contributes to a number
of the United Nations Sustainable Development Goals (SDGs).
The over subscription to our inaugural SDGs bond, launched
earlier this year in the European wholesale debt capital markets
— raising €750 million to fund ANZ loans and expenditures
that directly promote nine of the United Nations’ 17 SDGs —
highlights growing demand for socially responsible investment.
As discussed throughout this report, strong and effective
partnerships are fundamental to achieving positive impacts
that improve social and environmental outcomes. Our financial
wellbeing programs, for example, could not be delivered without
the dedication of our community partners and I take this
opportunity to thank them.
Finally, I would also like to thank our people — I feel confident
that with their continued dedication we will deliver on our
strategy, creating sustained value for our customers, employees,
shareholders and the community, well into the future.
David Gonski, AC
CHAIRMAN
This was a challenging year for both ANZ and the entire
banking industry.
The Royal Commission into Misconduct in the Banking,
Superannuation and Financial Services Industry has been
confronting for all of us at ANZ, including the Board.
We recognise that in the last decade we have failed in some
circumstances to do the right thing and to keep the needs of our
customers as our priority. The Board and senior management will
improve transparency with customers and ensure that the balance
between earnings and providing worthwhile, fair and desired
services is maintained at all times.
The Ethics, Environment, Social and Governance Committee
of the Board, which I chair, is active and well informed. Throughout
the year we have undertaken strategic, governance and oversight
activities on issues including customer remediation, implementation
of the new Banking Code of Practice, organisational culture, the
development of ANZ’s ethical decision making framework and
performance against sustainability targets.
CEO’S
MESSAGE
SHAYNE ELLIOTT
FOR ANZ TO HAVE A SUSTAINABLE,
LONG-TERM FUTURE, WE NEED
TO BE SIMPLER, DO A FEW
THINGS REALLY WELL, AND
KEEP OUR PROMISES.
5
CHAIRMAN AND CEO MESSAGE
Keep our promises and keep on listening and learning. If we fail
to live up to our promises to customers, we will acknowledge our
failures and learn from them. Our culture is critical to living up
to this — continuing to create a stronger sense of core purpose
and ethics will help to increase accountability and build
community trust.
Public disclosure of our performance against measurable
sustainability targets is an important part of holding ourselves
to account. While the Royal Commission has highlighted times
where we have let our customers and the community down,
as is discussed throughout this report, we continue to make
many valuable contributions, including:
-reaching more than 621,000 people through our MoneyMinded,
MoneyBusiness and Saver Plus programs since 2002, as part
of our target to help enable social and economic participation
of 1 million people by 2020;
-helping more than 550 New Zealand households damp proof
their homes by working with the government to provide
$100 million in interest free loans for insulation; and
-funding and facilitating $11.5 billion in low carbon and
sustainable solutions since 2015, including ‘green’ buildings
and renewable energy.
I would like to thank our people who work hard every day to do
a better job for our customers, shareholders and our community.
We know we still have a significant job ahead of us, and as a team
we are committed to delivering a better bank — a bank that can
truly shape a world where people and communities thrive.
Shayne Elliott
CHIEF EXECUTIVE OFFICER
We operate in a complex environment across 34 markets,
navigating a range of sensitive issues with potentially significant
social and economic impacts. For this reason, just as we report
on our financial performance, it is equally important that we
report on our sustainability performance — explaining how
we manage our most material environmental, social and
governance (ESG) risks and opportunities.
Communicating transparently and openly is critical to rebuilding
community confidence. The Royal Commission has highlighted
failures by ANZ and our industry and has helped us to reflect
on the type of organisation we want to be.
There are two key things we are focusing our efforts on to become
a better bank.
Be simpler and faster. We want to do fewer things and do them
really well — while ensuring they are aligned to our purpose.
In the past we have taken too long to identify, report and to fix
customer issues. This report outlines a number of the initiatives
we have underway to improve customer outcomes, including for
our most vulnerable customers.
BANKING ROYAL
COMMISSION
The Royal Commission’s Interim Report lays out conduct of
a standard below what the community expects and, in some
cases, what the law requires. The observations of the Commission
have rightly dismayed and disappointed Australians.
We have acknowledged to the Commission that ANZ has engaged
in misconduct and conduct falling below community standards
and expectations.
These acknowledgements include that:
-we failed our responsible lending obligations for some car loans;
-financial advice customers paid fees for advice reviews we did
not provide; and
-there have been cases of inappropriate financial advice, together
with other poor conduct by advisers.
The Commission found that in other cases ANZ had failed to meet
community standards and expectations or may have a case to
answer as to misconduct.
The Commission’s Interim Report strengthens our resolve to make
ANZ simpler and better able to serve our customers.
We are improving the accountability of our senior executives for
failures that harm customers. This includes the implementation
of the Banking Executive Accountability Regime (BEAR).
We are also reducing the complexity of the bank, including
by reducing the number of products we offer. While no excuse
for customer harm, complexity makes it harder to identify and
fix problems.
Other steps we are taking to improve customer outcomes
are discussed on pages 17–18.
We will continue to engage constructively with the Royal
Commission as it finishes its work. Our hope is that the Royal
Commission serves as a watershed in the restoration of trust
in financial services. This trust is necessary if financial services
are to help Australians save, borrow and grow their wealth.
The Royal Commission into
Misconduct in the Banking,
Superannuation and Financial
Services Industry has conducted
seven rounds of hearings into:
1 consumer lending;
2 financial advice;
3 loans to small and
medium enterprises;
4 issues affecting Australians who
live in remote and regional
communities;
5 superannuation;
6 insurance; and
7 causes and responses.
On 28 September 2018, the Royal
Commission submitted its Interim
Report on the first four hearing rounds.
ANZ submitted its response to the
Interim Report on 26 October 2018.
The Commissioner has been asked to
submit his final report by 1 February 2019.
6
ANZ 2018 SUSTAINABILITY REVIEW
7
8
1456890263731416
OUR APPROACH TO SUSTAINABILITY
Our Sustainability Framework supports our business strategy,
reflects our most material issues and is aligned with our purpose.
This year we refreshed our Framework.
At the core of our Framework is Fair and responsible banking —
keeping pace with the expectations of our customers, employees
and the community, behaving fairly and responsibly and
maintaining high standards of conduct.
Our three priority areas are:
Environmental sustainability — supporting household, business
and financial practices that improve environmental sustainability.
Housing — improving the availability of suitable and affordable
housing options for all Australians and New Zealanders.
Financial wellbeing — improving the financial wellbeing of our
customers, employees and the community by helping them make
the most of their money throughout their lives.
Founded in 1835 and headquartered in
Australia, we provide banking and financial
products and services to around eight
million individual and business customers.
We operate in and across 34 markets.
OUR CULTURE AND VALUES
Our values are the foundation of how we work and are
supported by our Code of Conduct (Code). All employees
and contractors must comply with the Code, which contains
guiding principles and sets the standards for the way
we do business at ANZ.
We care about:
ABOUT OUR
BUSINESS
OUR PURPOSE
Our purpose is to shape a world where people and communities
thrive. That means striving to create a balanced, sustainable society
in which everyone can take part and build a better life. One of the
ways we are bringing our purpose to life is through contributing
solutions to complex issues that matter to society and are core to
our business and strategy. We are focusing our efforts on financial
wellbeing, environmental sustainability and housing, contributing
to these challenges by: developing innovative and responsible
financial products and services; participating in relevant
policy development and research; strengthening stakeholder
partnerships; and harnessing the skills of our people.
INTEGRITY
COLLABORATION
ACCOUNTABILITY
RESPECT
EXCELLENCE
GOVERNANCE AND
RISK MANAGEMENT
GOVERNANCE AND RISK MANAGEMENT
The Board is responsible for the
oversight of ANZ and its sound and
prudent management, with specific
duties as set out in its charter available
on anz.com/corporategovernance.
There are five principal Board Committees — the Audit Committee,
the Ethics, Environment, Social and Governance (EESG) Committee,
the Risk Committee, the Human Resources Committee and the
Digital Business and Technology Committee. Each Committee
has its own charter setting out its roles and responsibilities.
At management level, the Group Executive Committee (ExCo)
comprises ANZ’s most senior executives. There is a delegations of
authority framework that clearly outlines those matters delegated
to the CEO and other members of senior management. In addition,
there are a number of formally established management committees
that deal with particular sets of ongoing issues.
For further detail on ANZ’s governance framework see
our 2018 Corporate Governance Statement available
on anz.com/corporategovernance.
OUR APPROACH TO ENVIRONMENTAL,
SOCIAL AND GOVERNANCE (ESG)
RISK MANAGEMENT
How we manage environmental, social and governance
issues is rightly impacting the governance of the company.
In 2018 we renamed both the Board Environmental, Social
and Governance Committee and the Responsible Business
Committee to include Ethics, providing management with
a further vehicle to raise ethical and conduct issues.
Our most material ESG risks (see page 10) are captured and
managed within the Group’s Material Risks (see page 38 of
the 2018 Annual Report available at anz.com/annualreport).
ETHICS, ENVIRONMENT, SOCIAL
AND GOVERNANCE COMMITTEE
The EESG Committee, led by ANZ’s Chairman, has a specific
focus on sustainability, approving the bank’s sustainability
targets and reviewing progress in achieving them. It also
advises management on ESG issues and reviews minutes
from management committees regarding sustainability issues.
The Board is responsible for establishing and overseeing the
bank’s risk management framework, with the Board Risk Committee
responsible for developing and monitoring compliance with ANZ’s
risk management policies. Management reports concerning the
implications of new and emerging risks are reviewed by the Risk
Committee. This may include risks that arise from the social and
environmental impacts of our lending decisions.
Oversight activities and issues discussed by the EESG
Committee during 2018 are outlined in the 2018 Annual Review
on pages 30–31 available on anz.com/annualreport.
ETHICS AND RESPONSIBLE
BUSINESS COMMITTEE
The Ethics and Responsible Business Committee (ERBC), chaired
by the CEO, is comprised of senior executives from business
divisions and Group functions, including Risk, Corporate Affairs
and Human Resources. The Committee is a leadership and
decision making body that exists to advance ANZ’s purpose.
Among other responsibilities, the ERBC agrees and sets ANZ’s risk
appetite for industry sectors to align with the bank’s purpose and
values. It oversees ‘who we bank’ and ‘how we bank them’ making
sure we align our lending decisions and products, services and
processes with our purpose. It also monitors current and emerging
ESG risks and opportunities, debating and agreeing a wide range
of issues, particularly those that have the potential to impact the
bank’s reputation.
The issues discussed are often complex, and this is one of the
reasons why this year we asked Dr Simon Longstaff from The Ethics
Centre to join the Committee. Dr Longstaff provides a valuable
independent voice and ethical perspective to the complex
decisions we make every day.
Issues discussed during 2018 have included the development
of an ethical decision-making framework to guide our lending
decisions; how we are supporting our customers in the transition
to a low carbon economy; checking the strength of our policies
with respect to live animal exports; the use of credit cards for
gambling and our responsibility for assisting customers showing
early signs of financial stress. This final issue led to a trial program
to proactively identify people showing signs of stress with credit
card use and directly intervene with actions to help them get
back on track.
9
WHAT MATTERS
MOST
OUR MATERIALITY PROCESS
Through our annual materiality assessment we engage with
internal and external stakeholders to inform the identification
of our social and environmental risks and opportunities.
We seek to identify those issues that have the most potential
to impact our ability to operate successfully and create value
for our stakeholders.
These issues may change over time, reflecting changes
in our business and external operating environment and
the expectations of stakeholders. We use the results of the
assessment to inform our business strategy thinking and our
Sustainability Framework, reporting and targets, and to guide
the content of this report and the applicable GRI Standards.
A complete GRI content index is available on anz.com/cs.
The key steps in our 2018 materiality process:
-compiled a list of potential material issues using a range
of inputs, including material risks (see pages 38–39 of the
2018 Annual Report), a media scan, stakeholder feedback,
employee surveys, peer review, industry trends and the
United Nations SDGs. This resulted in a shortlist of 14 material
issues for review and discussion by stakeholders (see complete
list on page 11);
-identified a representative sample of stakeholders for
consultation on the relative importance of these issues.
This included a cross-section of senior ANZ employees
as well as external stakeholders, with geographic spread
across Australia, New Zealand and Asia. Internal stakeholders
included risk, business governance and regulatory affairs,
customer operations, technology, communications and public
affairs, human resources, branch managers, business bank
and ‘C suite’. External stakeholders included investors, business
customers, consumer bodies, industry associations and a
range of NGOs focused on social and environmental issues;
-selected stakeholders completed a short survey providing
quantitative data on the relative priority of the issues.
Stakeholders were asked to rank the list of issues according
to their importance and to discuss their ‘top three’;
-undertook one-on-one interviews with 29 stakeholders
providing qualitative content, informing our understanding
of the current and future context of each issue, including the
potential for it to impact our value creation over time; and
-identified a prioritised list of material issues and the
context behind each.
OUR MOST MATERIAL ISSUES
This year, stakeholders ranked the following issues (risks or
opportunities) as having the most potential to impact our
value creation in the short, medium and long term. Several
of our Fair and responsible banking targets (see page 12) seek
to improve our performance with respect to these issues.
Fairness and ethical conduct
This is the highest ranked issue, with the Royal Commission strongly
influencing stakeholder sentiment in Australia. Operating in a fair
and ethical manner is seen by stakeholders as fundamental if we
are to demonstrate we are trustworthy. Stakeholders commented
on the specific issues of financial incentives resulting in poor
customer outcomes, products with poor value for customers
and conduct issues.
Fraud and data security
This could significantly disrupt the bank’s operations and impact
our reputation in the event of a breach. Ensuring we have strong
internal controls and risk management frameworks in place to
mitigate this is critical. Ongoing education of our customers and
the wider community about online risks and improving their
own data security is also considered important.
Customer experience
Delivering a positive customer experience is a key way in which
we can differentiate ourselves from competitors and deliver
sustainable business performance in the long term. Stakeholders
also highlighted fairness, transparency, accessibility and simplicity
of products as critical to demonstrating to customers that they
can trust us to provide them with the right products and services
for their circumstances.
Corporate governance
Organisations with strong corporate governance processes and
policies in place are likely to perform better in the longer term.
This year stakeholders told us that the bank needs to identify and
act on misconduct and failures to meet community standards and
expectations quickly, and improve remediation. This is the first time
this issue has been ranked in the top five, reflecting stakeholder
concerns following the significant failures highlighted at the
Royal Commission.
Digital innovation
This is core to our strategy and a key factor in driving positive
customer experience. Customer expectations are being redefined
by their experiences with companies using technology in new
ways to deliver better service. Today, the smartphone is our most
popular ‘branch’. It is now more important than ever that we work
hard to keep up with digital change and customer expectations
to make banking easier for our customers.
10
ANZ 2018 SUSTAINABILITY REVIEW
OUR MATERIAL ISSUES (STAKEHOLDER RANKING)
Our material
issues and rankingDescription of issue
Relevant United Nations
Sustainable Development Goals
Fairness and
ethical conduct
A strong corporate culture, known for ethics, values, fairness and
transparency. Simple and understandable products and communications
(ie. product disclosure, including bank fees and charges) and appropriate
hardship/collections policies.
Fraud and
data security
Policies and processes in place to prevent fraud and protect customer
data and privacy. Includes customer access to personal data.
Customer
experience
Delivering value and improved customer experience through appropriate
financial products and services for all customers, small business and personal.
Corporate
governance
Appropriate governance frameworks in place (ie. processes and policies,
including those relating to risk management, executive remuneration
and accountability) to ensure ANZ is managed in the long-term
interests of stakeholders.
Digital
innovation
Keeping pace with digital innovation to ensure we are offering our customers
competitive and convenient products and services in a rapidly changing market.
Responsible
business lending
Social and environmental impacts that may result from our business
lending, particularly our lending to large business customers (eg. lending
to sensitive sectors such as mining, military etc.). Includes our due diligence
processes in relation to our customers' human rights obligations.
Financial
wellbeing
Promoting and enabling access to safe and affordable products and services,
particularly for lower-income and vulnerable consumers. Work with cross-sector
partners to help customers, employees and the broader community meet
current financial commitments and needs, and improve their financial resilience.
Financial system
stability and regulation
Financial system stability and regulation of the banking sector, including
government policy relating to access to markets and bank licences.
Anti-money laundering
and terrorism financing
Compliance with international sanctions, anti-money laundering
and terrorism financing requirements.
Diverse and inclusive
workforce
Attracting and retaining an engaged, diverse and inclusive workforce
to help us serve our customers better and drive strong business
performance across the markets in which we operate.
Climate changeManaging the business risks and opportunities associated with climate
change. Includes the role we play in supporting our customers to transition
to a low carbon economy.
Labour rights and
employee wellbeing
Fair and equitable wages, freedom of association, safe working conditions
(including effective policies to maintain physical and mental health and
wellbeing), fair hours, no discrimination, regular work and whistleblower policies.
Investing in the
community
Supporting the communities in which we operate through workplace
giving and volunteering; and recovery from natural disasters.
Sustainable
supply chain
Environmental and social impacts of our procurement practices (ie. identifying
and managing the risks and opportunities associated with our supply chain).
11
WHAT MATTERS MOST
2019 SUSTAINABILITY
TARGETS
Note: all proposed targets are based on financial year end 30 September, with the exception of environmental footprint targets which follow a 30 June year end in line with Australian
greenhouse gas regulatory reporting year. All targets are Group wide unless otherwise noted.
FAIR AND RESPONSIBLE BANKING
Keeping pace with the expectations of our customers, employees and the community, behaving fairly and responsibly,
and maintaining high standards of conduct.
Targets
Implement strengthened Consequence Management Framework, applicable to employees in breach of our Code of Conduct, by 2019.
Improve (or where ranked #1, maintain) our Net Promoter Score ranking relative to peers in our Retail, Commercial
and Institutional businesses (Australia and New Zealand).
Continue to allocate dedicated resources to customer remediation to improve our processes and ensure that by 2020 we have:
-decreased the time taken to reimburse customers; and
-delivered an education program to employees to share ‘lessons learnt’ from customer remediation and to prevent future
remediation from occurring (Australia Division).
Communicate with more than 700,000 of our retail and commercial customers by 2019 to help them get more value from
our products and services and establish positive financial behaviours, such as improved savings habits (Australia).
Implement new Dispute Resolution Principles by 2019 (Australia).
Each year we set public sustainability targets that reflect our
Sustainability Framework priorities, support the delivery of our
business strategy and respond to our most material issues.
Progress against our targets is reviewed by the ERBC, and twice
a year by the Board EESG Committee. Performance against our
2018 targets, many of which are aligned with the United Nations
SDGs, is discussed throughout this report.
2018 SUSTAINABILITY
TARGETS PERFORMANCE
This year we have achieved or made good progress
against the majority of our targets.
32%
63%
5%
ACHIEVED
PARTIALLY ACHIEVED
OR IN PROGRESS
DID NOT ACHIEVE
We are committed to the United Nations SDGs and
our Framework, together with public targets that
we set annually, support 10 of the 17 SDGs:
12
ANZ 2018 SUSTAINABILITY REVIEW
FINANCIAL WELLBEING
Improving the financial wellbeing of our people, customers and communities by helping them make
the most of their money throughout their lives
Targets
Relevant United Nations
Sustainable Development Goals
Help enable social and economic participation of 1 million people by 2020 through our initiatives to
support financial wellbeing, including our financial inclusion, employment and community programs,
and targeted banking products and services for small business and retail customers.
Build a diverse and inclusive workforce by:
-increasing the representation of Women in Leadership to 33.1% by 2019 (34.1% by 2020); and
-recruiting >1,000 people from under-represented groups including Indigenous Australians,
people with disability and refugees, by 2020.
HOUSING
Improving the availability of suitable and affordable housing options for all Australians and New Zealanders
Targets
Relevant United Nations
Sustainable Development Goals
Fund and facilitate $1 billion of investment by 2023 to deliver around 3,200 more affordable,
secure and sustainable homes to buy and rent (Australia).
Provide NZ$100 million of interest free loans to insulate homes for ANZ mortgage holders
(New Zealand).
Offer all ANZ first home buyers access to financial coaching support (Australia and New Zealand).
ENVIRONMENTAL SUSTAINABILITY
Supporting household, business and financial practices that improve environmental sustainability
Targets
Relevant United Nations
Sustainable Development Goals
Fund and facilitate at least $15 billion by 2020 towards environmentally sustainable solutions
for our customers, including initiatives that help lower carbon emissions, improve water
stewardship and minimise waste.
Encourage and support 100 of our largest emitting customers in the energy, transport, buildings
and food, beverage and agricultural sectors to establish, and where appropriate, strengthen
existing low carbon transition plans, by 2021.
Reduce the direct impact of our business activities on the environment by:
-reducing scope 1 and 2 emissions by 24% by 2025 and by 35% by 2030 (against a 2015 baseline);
-increasing renewable energy use in our Australian operations by 13% by 2020 (against a 2017 baseline);
-reducing paper consumption in Australia and New Zealand (office and customer paper use only)
by 40% by 2020 (against 2015 baseline);
-increasing recycling rates in our Australian commercial offices (>20,000m
2
) by 12% by 2020
(against a 2017 baseline); and
-reducing water consumption in our Australian commercial offices (>10,000m
2
) by 15% by 2020
(against a 2015 baseline).
13
2019 SUSTAINABILITY TARGETS
IMPROVING CULTURE
AND CONDUCT
Our strategic priority is to deliver a purpose
and values-led transformation of the bank.
Earlier this year we engaged with our extended leadership team
(200 of our most influential leaders) to help shape our aspirational
culture — what it means in practice and the critical role they play
in our cultural transformation
Target
Improve senior leaders’ role modelling of ANZ values
by 2% to 74% in 2018.
Performance
Perception of senior leaders’ role modelling of ANZ Values
has decreased from 2016 by 1% to 71%.
We took steps to support our cultural transformation, with a focus
on increasing accountability, improving customer outcomes and
restoring community trust. We also continued to develop the key
capabilities essential to our digital transformation. Progress this
year has included:
-We established a Responsible Banking group within our Australian
Retail and Commercial Business, with specialist teams dedicated
to customer remediation, as well as product suitability and
responsible lending (discussed on page 17).
-We have commenced work to strengthen our accountability
and consequences framework to ensure that employees,
including leaders, are held accountable when things go wrong
and proportionate consequences are consistently applied. This
work includes improving the tools and information our leaders
have access to, so that they are better supported when making
decisions on employee performance and remuneration (including
deferred remuneration). The Consequence Review Group
(previously known as the Clawback Review Group) oversees the
appropriate management of accountability and consequence
in the bank and is chaired by the CEO. We are also introducing
a system that integrates and centralises information on material
risk and compliance events for the purpose of accountability and
consequence management.
-We are strengthening governance, with the development of a new
Accountability and Governance model for culture aligned with
the Banking Executive Accountability Regime and agreed to by
the Board. This model provides greater transparency around who
is accountable for what with respect to ANZ’s culture and driving
action to help us achieve our aspirational culture.
-We continued to roll out our ‘New Ways of Working’, encouraging
accountability through increased transparency of what teams
and individuals are working on and ensuring our customers’ best
interests are always at the centre of what we do. This new way of
working fosters learning through reviews on projects or activities
completed and iterating what we have done to evolve our
approach and deliver better customer outcomes.
-We launched our ‘New Ways of Leading’ — the leadership
behaviours we believe are most critical to our transformation,
culture and rapidly evolving environment, and have begun to
embed these across the organisation. These behaviours include:
Be Curious; Create Shared Clarity; Empower People; Connect with
Empathy; and Grow People Selflessly. We are supporting and
empowering our leaders to develop their capabilities and meet
our behavioural expectations of them. These expectations have
also been incorporated into interview guides and selection tools
for leader recruitment; and our people processes for identifying
potential and supporting career growth and succession planning.
OUR CULTURE IS CHANGING
Our aspirational culture incorporates our purpose, values,
Code of Conduct and ‘winning behaviours’ to ensure we
are continuously improving and adapting for our customers.
We strive to be:
- Customer centred — we are human, open and
authentic; we use technology and data and combine
it with empathy to strengthen relationships and create
solutions for customers; we care about our customers,
our colleagues and the community, and speak up
if we see the need for change.
- Always learning — we are curious and believe we can
all keep learning and growing; we try stuff out and are
not afraid to fail; we value what we learn as well as what
we achieve; we use data to help us improve.
- Making things simple — we are guided daily by our
purpose and values; we try to simplify everything we do;
we create clear boundaries and the freedom to act within
them; we focus on outcomes, not process or hierarchy.
14
ANZ 2018 SUSTAINABILITY REVIEW
-To help us create an ‘always learning’ culture we have invested
in an enterprise learning platform that aggregates internal and
external learning, enabling our people to access learning that
meets their specific needs anywhere, anytime, on any device.
We also introduced the ‘Live Learn Grow’ series, designed to
be accessible across the geographies in which we operate
and includes live events, videos, podcasts, interactive and
self-directed activities.
CODE OF CONDUCT
Our Code of Conduct (Code) sets the expected standards of
behaviour linked to our values. Our Code explicitly requires all
employees and contractors to act with honesty and integrity
and to comply with the law as well as all of our policies and
procedures. The Code is supported by a suite of policies
1
that
are reviewed regularly to ensure they reflect any changes in law
and otherwise remain fit for purpose. We expect our banking
partners (such as suppliers, service providers and other relevant
third parties) to adopt and maintain similar conduct and ethics
principles to those outlined in the Code and supporting policies.
All employees and contractors are required to complete the
Essentials training courses within two months of commencement
and then on an annual basis. The courses include training on
‘Living the Code’, ‘Equal Opportunity Essentials’ (including in relation
to sexual harassment), and ‘Compliance Essentials’ (including in
relation to Anti-Money Laundering and Operational Risk Essentials).
The Living the Code course reinforces the importance of our values
and Code, and seeks a declaration of compliance with the Code.
By completing the course, participants are confirming they
understand the Code’s principles and have complied with them
over the last 12 months. In 2018 99% of our employees and
contractors completed the training. From 2019, individuals
who fail to complete this training (or other mandatory learning
requirements) within 30 days of the due date are (in the absence
of genuinely exceptional circumstances) ineligible for any salary
increase or bonus as part of our annual remuneration review.
This year we introduced monthly calls with members of the
Executive Committee for new employees giving them an
opportunity to understand our behavioural expectations directly
from our leaders. We also made a Performance Assessment Guide
available to all employees, clearly articulating the impact to overall
performance outcomes and remuneration when an employee’s
behaviour does not meet expectations.
Where there is evidence that someone may have breached our
Code and policies, we investigate and, where such allegations
are substantiated, take appropriate disciplinary action.
This includes formal warnings, dismissal and, where relevant
for more senior employees, bonuses being reduced. In 2018,
there were 1,114 alleged breaches of our Code across our
operations, down from 1,443 alleged breaches in 2017. Breaches
ranged from conflict of interest through to allegations of fraud,
bullying, discrimination and email misuse. Outcomes following
investigations of breaches this year included 140 resignations,
226 terminations and 743 warnings.
WHISTLEBLOWER POLICY
Our purpose and values set the standard for how we do business
and encourage openness, integrity and accountability. Every
employee is responsible for assisting in the prevention, detection
and reporting of conduct that is inconsistent with our values
and Code and policies. Our Whistleblower Policy ensures that all
employees, contractors and external auditors can raise concerns
regarding actual or suspected contraventions of our ethical and
legal standards freely and without fear of repercussions. The policy
provides a number of avenues for disclosure, including internally
through a Whistleblower Protection Officer (WPO), and externally
via confidential phone, email and web-based mechanisms,
operated by a third-party provider (Deloitte).
Our Group Integrity team is responsible for investigations
into allegations of internal fraud, bribery and corruption involving
employees and contractors. If the issue reported involves unlawful
criminal conduct, then the WPO will also consider whether
the matter should be referred directly to the police. Where the
whistleblower has concerns about the resolution of the matter
they may escalate it to the Chief Compliance Officer.
In late 2017 we established a Whistleblower Advisory Group,
comprised of a broad cross-section of employees across the
bank. These employees provide advice to the Whistleblower
Program on policy changes and communications strategies
to help promote whistleblowing. We also recruited a full-time
Whistleblower Program Lead to manage the program and
added four investigator roles to our Group Integrity team.
Our Group Integrity team delivered more than 65 awareness
sessions throughout the year, which included information on
whistleblowing to employees across our regions. This year, reports
under our Whistleblower Policy increased, with 137 disclosures
made (up from 121 in 2017). The majority of the reports did not
uncover any significant issues. In cases where investigations
revealed that our policies had been breached, we took
appropriate action, including dismissal.
1.
A copy of our Code of Conduct and the full list of policies is available on https://shareholder.anz.com/our-company/corporate-governance.
15
FAIR AND RESPONSIBLE BANKING
EMPLOYEE WELLBEING
AND ENGAGEMENT
We provide an environment that enables
our employees to participate fully in the
workplace and perform at their best.
An engaged workforce will help us to
meet external challenges and achieve
our business strategy.
Our Health and Safety Policy applies to everyone who works at
ANZ, including our contractors. Health and safety risks vary across
our business and our health, safety and wellbeing plans include
risk controls to account for these differences. Strategic health safety
and wellbeing priorities are developed on an annual basis and
monitored and reviewed by senior management throughout the
year. Measurable objectives and targets are set and the Board
monitors and reviews the priorities and undertakes twice-yearly
performance overviews. The policy is reviewed every two years
and approved by our CEO.
This year we have increased our focus on employee wellbeing.
Our vision is to create a positive work environment where our
people can thrive. For us, wellbeing encompasses the areas
of mental, physical, social and financial wellbeing.
Our mental health program includes a range of tools, resources and
training aimed at supporting our employees. Resilience programs
are available to all employees and include training on essential skills,
such as stress management and coping skills.
We have continued to implement mental health awareness training
to frontline managers in our retail environment in Australia and are
rolling out an online training program to all people leaders, available
in all our geographies. Our Employee Assistance Program (EAP)
is available to all employees and their immediate family members.
The EAP provides confidential, free counselling and guidance for
work and personal problems, and includes online resources covering
topics such as managing stress, mindfulness, and relaxation.
We encourage early reporting of incidents/illness and hazards,
in order to effectively support the wellbeing of our employees.
This also allows us to identify any trends so we can implement
relevant prevention programs to minimise injuries and enable
employees to remain at work, or return to work as soon as possible.
Data relating to our health and safety performance in 2018 is
available on page 82. This year we have seen an increase in ‘lost time
injuries’ however, there are no new identifiable trends. The majority
of these injuries continue to be related to slips, trips, ergonomics
and injuries caused by bumping into stationary objects.
We also support the social and financial wellbeing of our employees
through a number of programs and initiatives that are discussed
in further detail in the Financial Wellbeing, Community Investment
and Diversity and Inclusion pages of this report.
EMPLOYEE ENGAGEMENT
Target
Improve employee engagement by 6% to 80%
by 2020 (against a 2016 baseline score of 74%).
Performance
Employee engagement decreased from
2016 by 1% to 73%.
We have experienced another year of organisational and cultural
transformation, continuing to roll out our New Ways of Working
(NWOW ) in the Australia and Technology Divisions.
This year we ran an employee engagement survey for all of our
employees, after opting for a shorter employee engagement ‘pulse’
survey in 2017. Over 30,000 employees participated, providing
valuable feedback and insights on various aspects of our purpose,
values, culture and conduct.
While engagement has remained relatively stable despite
organisational change and increased regulatory and community
pressure (including the introduction of the Banking Executive
Accountability Regime and the Royal Commission), we recognise
that we still have much to do in terms of supporting our employees.
There are a number of initiatives that we are working on to listen
to and support our people. These include:
-strengthening our leadership behaviours through the launch
of our New Ways of Leading, supported by people leader
webcasts and calls with Shayne Elliott and other Executive
Committee members;
-improving our reward, performance, recruitment and learning
processes, focusing on creating a better employee experience;
-exploring new employee listening strategies such as our
‘#askmeanything’ series that encouraged employees to ask
members of our Executive Committee questions on a broad
range of topics including NWOW, automation and the use of
artificial intelligence, the economy and our leave and flexible
working policies; and
-continuing to embed our values, ensuring there are appropriate
consequences for behaviours not aligned to our values.
Performance management plays an important part in building high
performing teams and a successful organisation. We encourage
all employees to have regular performance and career discussions
with their managers throughout the year, in addition to the
formal performance assessment process eligible employees
must participate in annually.
16
ANZ 2018 SUSTAINABILITY REVIEW
CUSTOMER REMEDIATION
PRINCIPLES
-customer focused — fair, honest and efficient;
-comprehensive, timely and transparent decision-making;
-appropriate governance and oversight;
-clear communication to customers impacted
by a remediation issue; and
-where relevant, a commitment to paying refunds or
compensation to customers without undue delay.
During the year, we have participated in a
large number of reforms, at an industry and
bank level, to improve customer outcomes
and restore community trust. We recognise
that getting the basics of customer service
right is essential to underpinning our social
licence as a bank.
CHANGES TO REMUNERATION
We are implementing all recommendations from Stephen
Sedgwick’s ‘Retail Banking Remuneration Review’, which is focused
on strengthening the alignment of retail bank incentives, practices
and good customer outcomes.
We have made significant progress, with actions completed since
commencement of the program including: changing frontline
employee incentive and recognition plans so that no rewards are
directly linked to sales; removing the payment of volume-based
incentives to aggregators, brokers and introducers; changing
employee performance management plans; and focusing our
efforts on initiatives that will support the achievement of
sustainable culture change.
We are on track to complete all recommendations ahead of expected
timeframes and will make further changes as quickly as possible to
ensure we achieve full alignment. Management provides regular
updates to the Board Human Resources Committee on progress.
We will continue to report externally through the Australian Banking
Association’s (ABA) reporting framework.
NEW BANKING CODE OF PRACTICE
We are implementing strengthened protections for consumer
and small business customers arising from the new Banking Code
of Practice (Code). The Code has been revised to better reflect
community standards and will be binding and enforceable.
Changes include:
-loan contracts for small businesses that are written in plain
English and easier to understand — we have simplified our main
contract for small business customers, halving contract length
and increasing customer safeguards;
-active promotion of affordable banking products, specifically
assisting people on low incomes to pick appropriate products;
-assistance for potentially vulnerable customers — we have
developed a new Vulnerable Customer mandatory learning
module to help our employees identify and assist customers
experiencing vulnerability;
-abolition of fees and commissions on lenders mortgage
insurance; and
-an end to unsolicited offers of credit card increases.
BETTER PRODUCTS AND SERVICES
At the end of 2016, we appointed former Commonwealth
Ombudsman Colin Neave as our first Customer Fairness Adviser
— signalling the start of a number of changes we knew we
needed to make.
Customer remediation principles developed by Mr Neave, the
key elements of which are above, have guided our work this year
to fix systemic errors, refund impacted customers more quickly
and learn from our mistakes so as not to repeat them in future.
We have established a Responsible Banking group within our
Australian Retail and Commercial Business, with specialist teams
dedicated to customer remediation, as well as product suitability
and responsible lending.
Our Product Suitability Program aims to achieve fair customer
outcomes via proactive customer contact, triggered by
behavioural indicators in our data. It is intended to help our
customers derive greater value from our products.
We have focused initially on potentially vulnerable customers,
particularly those with persistent credit card debt or with potential
for future financial stress. During the year, our bankers provided
financial education and coaching to around 2,000 customers with
persistent credit card debt on how to use, and pay down, their credit
card. In addition, those customers were offered a lower interest rate
for 12 months, or a product transfer (e.g. from a ‘rewards’ card to
a low-rate card). The results of the pilot were encouraging, with
customers initially increasing their monthly payments and using
their credit cards less, with lower arrears levels.
We are also building product suitability into our product review
processes — for example, we are proactively contacting our home
loan customers paying interest only before they move to principal
and interest payments, to enable them to plan for, and successfully
manage, the transition to higher payments.
IMPROVING CUSTOMER
OUTCOMES
17
FAIR AND RESPONSIBLE BANKING
The agile transformation of our workforce — our New Ways of
Working — means we are in a better position to implement
changes in a timely manner with minimum disruption to our
customers. There is more to do, but our changes so far are already
making ANZ easier to manage and better for customers.
An ongoing challenge is how best to serve the banking needs
of our customers located in rural and regional areas who may
be disproportionately impacted by branch closures. As discussed
on page 23 we are working on how best to provide alternative
banking options.
CUSTOMER EXPERIENCE
We recognise we must listen to our customers and use their
feedback to improve our products and services, and to drive
a customer-centric culture.
One way in which we measure the experience of our customers
is through Net Promoter Score. Net Promotor Score enables us to
gauge whether we are meeting customer needs and expectations
and how we are performing relative to peers. It is measured by
asking customers how likely they are to recommend ANZ (on a
0–10 scale) and is calculated by subtracting the percentage of
detractors (those who give a score of 0–6) from the percentage
of promoters (those who give a 9 or 10).
Target
Create the best experience for our customers, measured
by: improving Net Promoter Score relative to peers (Retail,
Corporate and Commercial and Institutional customers).
Performance
Australia
-Retail: ranking increased to 3rd from 4th at end of 2017
1
-Business and Private Bank: ranking increased
to 3rd from 4th at end of 2017
2
-Institutional: ranking increased to 1st from
2nd at end of 2017
3
New Zealand
-Retail: ranking of 4th remained steady from end of 2017
4
-Commercial and Agricultural: ranking of 5th
remained steady from end of 2017
5
-Institutional: ranking increased to 1st from 3rd
at end of 2017
6
One way in which we are listening to and learning from our customers
is through our Net Promoter System (NPS).
Customer feedback is integral to our Net Promoter System (NPS),
facilitating continuous learning for both customer facing and
non-customer facing teams. We use a Voice of Customer (VOC)
system to collect, review and analyse feedback at key points during
customer interactions. This year we received 297,000 pieces of
customer feedback providing insight into customers’ experiences —
both positive and negative — which will inform the actions we take
to improve customer experience.
As part of our New Ways of Working, we have established
a NPS Centre of Expertise, with the purpose of rolling out NPS across
selected teams in Australia. We have completed the roll-out of NPS
in our branch network in Australia and commenced pilots in our
Commercial Contact Centre and Small Business Banking teams.
NPS has now been embedded into 630 branches across Australia,
92 teams across the Customer Contact Centre and 19 teams in
Commercial and Business Servicing and Sales.
For non-customer facing teams, we have commenced work to improve
the customer experience for Home Loans, Transaction Accounts and
Business. A number of initiatives are also underway to streamline
customer on-boarding and application processes for several products.
Our Australia Division Customer Council, established in 2017,
is comprised of senior ANZ leaders and provides leadership and
governance over customer focused activities across Australia Division.
This includes overseeing the design, implementation and embedding
of the NPS and ongoing efforts to improve the customer experience
while making sure customer issues are a key priority for the bank.
1.
Roy Morgan Research Single Source, Australian population aged 14+, Main Financial Institution, six-month rolling average to Sep’18. Ranking based on the four major Australian banks.
2.
DBM Business Financial Services Monitor. Base: Business and Private Banking (<$100m annual turnover) Main Financial Institution customers. Data based on business banking NPS only
(excludes Private Bank NPS). Six-month average to Sep’18. Ranking based on the four major Australian banks.
3.
Peter Lee Associates 2018 Large Corporate and Institutional Relationship Banking survey, Australia.
4.
Retail Market Monitor, Camorra Research, Retail, Sep’18 (monthly). Ranking based on the five major Retail banks in New Zealand.
5.
Business Finance Monitor, TNS Kantar Research. Base: Commercial ($3m–$150m annual turnover) and Agricultural (>500K annual turnover) customers, Q3’18 (quarterly). Ranking based
on the five major Commercial and Agricultural banks in New Zealand.
6.
Peter Lee Associates 2018 Large Corporate and Institutional Relationship Banking survey, New Zealand, ranked against the Top 4 competitors.
The four core elements of our Net Promoter System are:
-sustained leadership commitment;
-a reliable and trusted customer metric (the Net
Promoter Score);
-customer-focused ‘listen, learn and act’ behaviours
embedded in customer facing and head office teams
(the ‘inner’ and ‘outer loops’); and
-enabling elements such as a measurement platform and
dashboard, analytics and aligned performance objectives.
18
ANZ 2018 SUSTAINABILITY REVIEW
SUPPORTING VULNERABLE
CUSTOMERS
We have a role to play in helping build
the financial wellbeing of those potentially
vulnerable to financial exclusion, such
as customers experiencing financial
hardship, people who live on low incomes
and people with low levels of money
management capabilities and confidence.
We have refreshed our approach to working with vulnerable
customers with new oversight and accountability and a more
consistent, bank-wide approach to issues faced by vulnerable
customers. Our Vulnerable Customer Forum (the Forum), an
internal group focused on how we can better assist vulnerable
customers, is developing a Vulnerable Customer Policy and formal
framework. This will improve our ability to identify customers at risk,
provide appropriate support and develop employee capability
and understanding of the many facets of vulnerability.
The recent changes to the Banking Code of Practice and Royal
Commission hearings have highlighted the need to act on the
specific circumstances of Aboriginal and Torres Strait Islander
customers, particularly in remote areas. The Forum will work
alongside our Reconciliation Action Plan (RAP) Committee take
action to meet the needs of potentially vulnerable Aboriginal
and Torres Strait Islander customers. Our RAP is discussed further
on pages 59–61.
A focus on collective action and responsibility has seen us continue
our commitment to the Financial Inclusion Action Plan (FIAP)
program, managed by Good Shepherd Microfinance and supported
by the Australian Government. This year, rather than publishing
a separate FIAP, we have consolidated our key actions with those
of our Accessibility and Inclusion Plan to provide a clearer picture
of how our approach to accessibility, financial inclusion and diversity
aligns with our purpose. We discuss this further on page 62.
We have also joined the Thriving Communities Partnership
(TCP), a cross-sector collaboration involving utilities, financial
services, telecommunications and transport providers, focused
on developing and implementing policies, practices and initiatives
to improve support for customers experiencing vulnerability
or hardship.
VULNERABLE
CUSTOMER TRAINING
We seek to minimise the risk of our customers experiencing
financial abuse. Our frontline employees often encounter
customers who may be in vulnerable circumstances, which
increases their risk of experiencing financial abuse.
We have been developing a consistent, bank-wide
approach to improving the identification of customers at
risk, to improve support provided and develop employee
capability and understanding of customer needs.
A key component to our approach is Supporting Vulnerable
Customers, a mandatory online learning course for frontline
employees to build their ability to: recognise if a customer
may be in a vulnerable situation: communicate with respect,
fairness and compassion; and to choose the appropriate
support to assist them. The course delivers content through
video, audio and interactive components, and includes
a number of scenarios that employees may encounter.
Supporting Vulnerable Customers will contribute to meeting
our obligations to vulnerable customers under the new
Banking Code of Practice. The course was introduced as
mandatory learning for more than 5,900 branch employees
and mobile lenders in September 2018, with roll out to over
3,000 employees in our Call Centre and Operations to follow.
Awareness training is also being provided to our senior leaders.
HIGHLIGHTS
GAMBLING RESTRICTIONS
From December 2018, we are introducing a restriction
on the use of credit cards for gambling transactions beyond
85% of the account credit limit. This change is designed
to reduce harm for potentially vulnerable customers using
ANZ credit cards for gambling while minimising unintended
consequences for the general population of card users.
We consulted with industry and community groups before
deciding to implement this measure. We are also considering
introducing a self-exclusion mechanism where customers can
‘opt out’ of the ability to perform gambling transactions on their
credit cards. These initiatives operate alongside our responsible
lending policies which are designed to ensure that credit is only
provided to those who can afford it. This helps prevent problem
gamblers from getting credit they cannot service.
HIGHLIGHTS
19
FAIR AND RESPONSIBLE BANKING
CUSTOMER HARDSHIP
There are times when our customers may be unable to meet their
financial commitments. Some customers may struggle to meet
their loan repayment obligations for a period of time, but may get
back on track if they are given the time and flexibility to deal with
their situation. Events such as job loss, unexpected medical needs
or a relationship breakdown can lead to these difficulties. Whatever
the reason, we are committed to working with customers who are
in hardship and experiencing financial difficulty, and seek to assist
them fairly, respectfully and with dignity.
In 2018 we received 37,313 requests for hardship assistance
in Australia, a decrease of 8.4% from 2017, reflecting a smaller
Asset Finance portfolio and improvements in cars and loans
delinquency. Data relating to requests for hardship assistance
is available on page 85 of this report.
Assistance offered to our hardship customers includes
payment moratoriums, temporarily reducing payments, debt
waiver, long-term payment arrangements, referral to a financial
counsellor and information in relation to budgeting and financial
literacy. Customers have access to a financial counsellor hotline
managed by Customer Connect, our customer hardship team, and
supported by an independent financial counsellor liaison officer.
Each Customer Connect team member receives specialised
training enabling them to deal effectively and empathetically
with customers experiencing hardship. We continue to refer
customers requiring holistic support and not just financial
counselling services to CareRing (refer to the case study
below for further details).
This year we ran a hardship awareness campaign for our Australian
Branch Network and Contact Centre employees to ensure our
frontline employees are able to identify common indicators of
financial difficulty from customer accounts and interactions and
refer customers displaying these indicators to Customer Connect
as necessary.
We also have laid the foundations for implementation of
‘Way Forward Debt Solutions’, the new Australian Banking
Association supported initiative that provides a free of charge
debt management service acting in the best interest of customers.
Once implemented, Way Forward Debt Solutions will support
people in financial difficulty to return to financial stability.
Our recently released approach to accessibility and financial
inclusion outlines the range of actions we are taking to improve
support for those potentially vulnerable to financial exclusion
including those who experience financial hardship. Our Approach
to Accessibility and Financial Inclusion is available for download
from anz.com/cs.
KILDONAN CareRing
We understand that customers experiencing financial hardship
may also be struggling with unemployment, a family situation,
health concern or other bills. In recognition of the need for a
more holistic approach, ANZ and Uniting (Kildonan) launched
CareRing for our customers in hardship in 2015.
Customers requiring more than financial counselling assistance
are referred to CareRing, a centralised, single point of contact
connecting customers to a coordinated range of support
services including housing support, social worker counselling,
drug and alcohol services, home energy assessments and
employment services. Clients of the CareRing program can also
be referred to our MoneyMinded program to develop their basic
budgeting skills.
Since its inception, we have referred more than 1,200 customers
in hardship to the CareRing program, with 181 referred in the
2018 financial year. Unemployment and ill health were the
primary causes of financial stress for customers.
More than 50% of customers referred to CareRing experienced
three or more indicators of financial hardship — such as not
being able to pay a credit card, mortgage/rent, or utility bill on
time; needing to ask friends or family for help; or asking for help
from a welfare agency — highlighting the often multi-faceted
nature of financial hardship. Almost two-thirds of customers
referred received at least one type of assistance from CareRing.
CASE STUDY
20
ANZ 2018 SUSTAINABILITY REVIEW
MANAGING CUSTOMER
COMPLAINTS
When our customers are dissatisfied with
our products or services we have multiple
channels available to lodge a complaint.
We endeavour to resolve matters quickly
and fairly.
We encourage our frontline employees to resolve complaints on
first contact. If this is not possible the complaint can be escalated
to the relevant internal dispute resolution (IDR) team. Alternatively,
our customers can complain directly to the IDR team. A dedicated
specialist will then investigate the complaint and seek to resolve it
with the customer. If a customer is not satisfied with the proposed
resolution of their complaint, they may escalate their complaint
to our Customer Advocate or the Australian Financial Complaints
Authority
1
in Australia, or the Banking Ombudsman Scheme
or Insurance and Financial Services Ombudsman in New Zealand.
In Australia and New Zealand, regular reporting and insights
are provided to stakeholders across the bank and used to drive
continuous improvement. In Australia Division, a central database
for complaints and reporting dashboards shows trends for
complaint type, product, and channels and is accessible to all teams
and distribution channels. The Complaints Leadership Team meets
monthly with representatives from across the teams and distribution
channels to discuss trends, initiatives, performance and potential
systemic issues.
Our Wealth Australia Division produces regular reports including
information on root cause analysis, verbatim insights, emerging
trends, volumes and initiatives underway. Monthly complaint forums
are held with stakeholders from across the business, including
product, risk, contact centre and operations to inform,
drive complaint reduction and improve the customer experience.
In New Zealand, complaints are analysed daily by Customer
Relations Complaints Managers, who identify emerging trends and
share relevant insights in weekly and monthly reports distributed
to stakeholders across the bank including product owners, channel
owners and risk. Additionally, a monthly complaints report is
prepared for the New Zealand Leadership Team and for each
meeting of the ANZ Bank New Zealand Limited Board.
From 2018, quarterly reports on complaint themes, volumes,
systemic issues and long standing cases across Australia Division,
Australia Wealth Division and New Zealand Division are reviewed
and discussed by the Board EESG Committee.
Data relating to complaints is available on pages 84–85 of this report.
AUSTRALIA — RETAIL AND
COMMERCIAL CUSTOMERS
Retail and commercial complaint volumes increased 20%
from 2017. Themes contributing to this increase include product
fees, interest and rewards, transactions and payments and loan
assessments. An increase in complaints has been noted since
the commencement of the Royal Commission which has
undoubtedly encouraged customers to be more proactive
in raising concerns, and has provided us with further insight
into how we might improve.
We resolved 41% of complaints within the first day of receipt,
however, the percentage of complaints resolved within 21 days
decreased to 85% from 97% in 2017. Overall resolution rates
lengthened, as a result of consistently higher than average
complaint volumes received through internal and external
dispute resolution processes (increasing 20% and 24%
respectively compared to 2017).
AUSTRALIA — WEALTH CUSTOMERS
Wealth complaint volumes decreased by 3% from 2017.
Key drivers of complaints included the transition of customers
to new ‘My Super’ wealth management products, changes to
the Smart Choice Insurance Significant Event Notices, OneCare
repricing, and login issues experienced when ANZ Share Investing
was transitioned to CMC Markets platform.
1.
AFCA replaced the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal in November 2018.
DISPUTE RESOLUTION PRINCIPLES
We have set a target to implement new Dispute
Resolution Principles in Australia by the end of 2019.
Mr Colin Neave, our Customer Fairness Adviser, is leading
the development of the principles. They will provide
a framework for a consistent, fair and customer-focused
approach to handling and responding to disputes with
our retail and small business customers and will apply
regardless of the forum in which a dispute is pursued.
With respect to legal proceedings, Mr Neave is also
developing model litigant guidelines, similar to those
used by the Australian Government.
21
FAIR AND RESPONSIBLE BANKING
NEW ZEALAND — RETAIL, BUSINESS
BANKING AND WEALTH CUSTOMERS
Complaint volumes increased by 67% from 2017. The magnitude
of this increase is largely due to improved data capture through
our Voice of Customer (VoC) surveys and Retail and Business
Banking employees. Any customer who scores their experience
six or less and states they have an outstanding issue in the VoC
survey is referred to a central case management team. The team
then contacts the customer to resolve their issue, logging the
issue in the complaints register (if it had not already been logged).
Previously these complaints were referred to the customer’s
relationship manager and line manager, but were not always
logged in the complaints register.
We resolved 93% of customer problems within five working days
in 2018. Credit cards, transaction accounts and home loans were
again the most complained about products, while complaints
relating to service accounted for 47% of all those received. The top
complaint type was account fees, making up 14% of the total.
This year we also observed an increase in transaction disputes and
fraud complaints. The increase can be attributed to a rise in scam
activity (particularly business email compromise scams), identity
theft and international money transfer fraud. There has also been
an increase in privacy complaints.
ANZ CUSTOMER ADVOCATE
The Customer Advocate works with customers and ANZ to
facilitate fair complaint outcomes and minimise the likelihood
of future problems. The Customer Advocate engages with
community and consumer groups, providing a valuable
communication channel which enables the bank to more
effectively respond to emerging issues and community feedback.
Retail, small business and wealth customers in Australia can ask
the Customer Advocate to review their complaint if they are not
satisfied with the outcome of ANZ’s dispute resolution process.
This voluntary pathway offers customers a further opportunity
to resolve their complaint with us.
The Customer Advocate operates autonomously of ANZ business
units and reports to the Group Executive, Australia. ANZ is bound
by the Customer Advocate’s findings in all cases.
In 2018, the majority of the completed reviews undertaken by
the Customer Advocate related to disputes about general banking
products (e.g. mortgages, savings accounts and credit cards), with
a much smaller number relating to insurance, superannuation
and investments. Data regarding volumes and outcomes is
included at page 85.
UNAUTHORISED
ACCOUNT ACCESS
Susan attended an ANZ branch to open a savings account.
She advised that her adult daughter Lisa had taken money
from her in the past and as a result she did not want the
new account to be linked to her internet banking or to
have ATM access. Susan specifically asked that access to
her account be restricted so that she could only access
the account at the branch.
Several months later Susan was admitted to hospital. While
she was there, the doctor gave Susan’s handbag to Lisa for
safekeeping, together with her wallet and mobile phone.
After returning home, Susan became aware that Lisa had
been making withdrawals from Susan’s savings account
to Susan’s transaction account via internet banking. Lisa was
then withdrawing funds at an ATM, using Susan’s PIN that was
known to Lisa.
Susan referred the matter to the police and approached
ANZ for assistance. Her claim for reimbursement was initially
declined when it was identified that the ATM withdrawals
had been conducted using Susan’s card and PIN. It was also
identified that internet banking access to the account had
been established following a telephone request, during
which time the caller had been identified as Susan.
The subsequent Customer Advocate investigation confirmed
that a diary note had been recorded when the account was
opened, noting that withdrawals should only be permitted in
the branch. This note was overlooked when Lisa (purporting
to be Susan) telephoned the contact centre. Call recordings
showed that Lisa responded correctly to several security
questions. The contact centre then sent a text message to
Susan’s mobile phone, as a means of further confirming the
caller’s identify. The Customer Advocate established that Lisa
was in possession of Susan’s telephone and was therefore
able to complete the identification process and arrange
internet banking access.
The Customer Advocate accepted that Susan had failed
to protect her PIN, however considered that ANZ’s failure
to comply with Susan’s instructions to limit access to the
account was a significant factor in her subsequent loss.
Susan accepted the Customer Advocate’s recommendation
that ANZ reimburse the $62,000 which was withdrawn from
her account.
CASE STUDY
22
ANZ 2018 SUSTAINABILITY REVIEW
DIGITAL TRANSFORMATION
We are accelerating our digital
transformation. Our strategy is to provide
superior, digitally enhanced experiences
and services for our customers that are
secure, relevant and intuitive, through
leveraging the strengths of our people,
technology and data.
Customer preferences continue to shift towards digital channels
— 3.5 million Australian retail customers and 1.4 million New
Zealand retail customers are digitally active (up from 3.3 million
and 1.3 million respectively). The popularity of digital payments
continues to increase, with 86% of retail value transactions
(e.g. transfers, withdrawals and deposits) in Australia and
84% in New Zealand being made via digital channels. Similarly,
the proportion of retail sales completed over digital channels
increased to 25% in Australia and 21% in New Zealand (from
21% and 16% in 2017 respectively).
During the year, we rolled out the New Payments Platform in
Australia to more than three million retail and 445,000 small and
medium business customers, allowing them to transfer funds
to other participating banks in real-time with improved data
capability. We also introduced the new ANZ app in Australia,
combining our goMoney™ and Grow wealth apps into a unified
platform offering a single location for more than 2.2 million retail
customers to access their banking, superannuation, insurance
and investments.
The use of mobile payment devices continues to increase with
the number of supported wallet transactions increasing from
26.4 million in 2017 to 64.2 million in 2018 in Australia. We have
extended our leadership in mobile payments with the addition
of Fitbit Pay and Garmin Pay, while adding EFTPOS on Apple Pay
and Android Pay. In an Australian-first we released Wallets@ATM,
enabling customers to withdraw cash from ATMs using their
mobile payment device rather than their bank card.
We increased the number of digital branches in Australia to
114 (from 81 in 2017). These branches offer customers electronic
queuing, free Wi-Fi and assisted digital self-service banking options.
Four of our digital branches are designed to have the look and feel
of a home; with rooms styled as a lounge, kitchen and dining room
where customers can discuss their home ownership goals.
The increased uptake of digital banking for simple transactions
has meant fewer customers visit our branches, with in-branch
interactions now centred on more complex banking requirements
such as home or business loans. We reduced the number of
branches by 51 in Australia and 13 in New Zealand. We recognise
the impact that this may have on our customers and are working
to provide other options, such as access to ATMs, taking cash-out
at retailers, making payments using debit cards, and making and
receiving payments using digital channels.
Customer data security is paramount at ANZ and we are focused
on ensuring our digital channels are safe and secure. At the end
of September, we had more than 350,000 customers registered
with ANZ Voice ID to make higher value payments via mobile.
The technology confirms a customer’s identity through hundreds
of unique characteristics in their voice and is now so advanced
it can tell the difference between identical twins or even a voice
recording. We have also enabled customer credential recovery
digitally and have improved success rates for electronic identity
verification when setting up new accounts, resulting in fewer
customers needing to call or visit us.
WITH THE HIGH ADOPTION RATES
OF CONTACTLESS PAYMENTS
IN AUSTRALIA, OUR CUSTOMERS
WILL BE SOME OF THE FIRST
IN THE WORLD TO USE THEIR
MOBILE DEVICES TO WITHDRAW
CASH IN ADDITION TO MAKING
PAYMENTS. WE KNOW THIS IS
SOMETHING OUR CUSTOMERS
WILL APPRECIATE.”
Katherine Bray, Customer Engagement Lead, ANZ
“
23
FAIR AND RESPONSIBLE BANKING
We continue to build on the key capabilities essential to our
digital future including customer proposition design, data insights
and innovation. Examples of progress in this area include:
-making key appointments in the areas of Human-Centred Design,
New Business, Emerging Technology and Ventures — supporting
the creation of memorable customer experiences, growing new
businesses and utilising emerging technologies;
-entering into a strategic partnership with Atlassian, a leading
provider of team collaboration and productivity software,
to help us as we continue to transform our business with
agile-based working;
-working with Google in Australia to enhance our data and analytics
capability using cloud technology to accelerate the delivery of
data-driven business insights to Institutional customers; and
-having a strategic investment and partnership with Data Republic
to develop useful data insights for our customers at speed using a
cloud-based platform to access trusted experts and other partners.
We are working towards the implementation of open banking
which is the application of the consumer data right to the banking
industry. This will enable consumers to safely access certain data
about themselves and share it with accredited third parties of their
choice. Based on the government’s current timeframes, this will
include data for credit and debit card accounts, deposit accounts
and transaction accounts in 2019. Implementation of open banking
is contingent upon the enactment of a new law and the finalisation
of government rules and standards.
INNOVATION —
ARTIFICIAL INTELLIGENCE
“Kia ora, I’m Jamie. Do you have
a question about banking for me?”
Jamie is our new digital assistant, helping our New Zealand
customers with some of their banking queries. All of the
questions Jamie can answer are general in nature and
do not require any specific customer information.
“We want to be the digital bank with a human touch,” says
Liz Maguire, Head of Digital and Transformation. “While we
know many of our customers love connecting through our
existing digital channels, we have been talking face to face a
lot longer than we’ve been using small screens.”
With that in mind, we partnered with New Zealand tech
company Soul Machines to develop Jamie.
Jamie provides customers with another way to find answers
to their basic banking queries, in addition to the options we
already provide — like branches, contact centre, internet
banking and our mobile phone app.
Jamie has a 3D-face designed around a detailed physiological
map of the human face, and is ‘brought to life’ with artificial
neural networks meaning she expresses personality and
character. She can have a conversation with customers online
to answer basic banking queries — rather than type in a
question, customers can talk to her.
Jamie is capable of learning — the more times she is asked a
question in varying ways, the better she will get at answering it.
Jamie is currently being trialled on ANZ Help with positive
feedback received to date. Around 90% of customers who
have interacted with Jamie think it is a good idea for us
to introduce this technology.
CASE STUDY
24
ANZ 2018 SUSTAINABILITY REVIEW
$$
$$
CYBER SECURITY
AND DATA PROTECTION
We take the security of our customers,
employees and services very seriously.
When impacted by cybercrime, customers
can lose trust in our digital banking
products and services.
CYBER SECURITY
Target
Extend ANZ’s cyber security education and awareness
program in 2018 by:
-embedding cyber security information into key business
processes (e.g. security tips when establishing new
customer accounts) and customer ‘touchpoints’
(eg. ANZ website); and
-collaborating with others (e.g. government, universities
and industry) to help build a ‘pipeline’ of cyber security
professionals and raise community awareness of
cyber security.
Performance
-We have delivered a range of initiatives embedding
cyber security information into key business processes
to raise cyber awareness of both customers and employees.
-We participate in industry collaborations to address
the skills shortage in cyber security and support
a ‘cyber-smart’ community.
Cyber security has continued to gain attention in both customer
facing and non-customer facing teams across the bank. This has
been driven by new local and international legislation and the
increased sophistication and frequency of cyber threats. The Cyber
Defence team proactively scans ANZ systems for vulnerabilities to
prevent malicious activity and manages threats to minimise impact
to customer operations. In addition, we have worked to build
awareness through an extensive education and influence program
of work across employees and customers.
We also have a sophisticated intelligence sharing capability and
frequently collaborate with industry partners, law enforcement
agencies and other private institutions. We have continued our
partnership with the Joint Cyber Security Centres in Australia to
provide intelligence and knowledge sharing.
Throughout 2018 we continued to play a leadership role in the
Security, Influence and Trust (SIT ) group which comprises partners
across banking, infrastructure, academia and government sectors.
The SIT group is committed to collaborating on community
campaigns to promote and support a ‘cyber-smart’ nation.
In response to the rapid increase in cybercrime we delivered
a range of initiatives in 2018 to raise the cyber security awareness
of both our customers and employees, including:
-the introduction of ‘TECH Talks’, facilitated by employees
within our Australian branch network, where cyber security
and technology related topics are discussed with customers;
-presentations to small business, corporate and commercial
customers conducted by regional and local bankers as part
of a broader series of client engagement sessions;
-in-application pop-up cyber security messages in the Wholesale
Digital Transactive banking platform which customers must
acknowledge before being able to proceed;
-the launch of a new cyber security alert page on anz.com
to provide examples of the latest cyber threats that have
the potential to impact our customers;
-the commencement of a ‘Change Champion’ Cyber Security
Ambassador Program within the New Zealand and Australian
Operations teams to improve cyber security capabilities
among employees, while also acting as an advocate for
cyber security within their respective areas;
-the implementation of an internal phishing email ‘triage service’
(suspicious email sorting capability) to ensure a timely response
to potential cyber attacks on ANZ;
-the establishment of an executive education program to improve
cyber knowledge; and
-the development of our new cyber security campaign to raise
awareness on simple steps customers and employees can take
to protect their virtual valuables.
25
FAIR AND RESPONSIBLE BANKING
This year, we were involved in industry collaboration to help
alleviate the skills shortage in cyber security and to support
a cyber-smart community. Highlights include:
-commencement of a partnership with Deakin University
to sponsor graduate roles into ANZ’s Security Domain
to address resourcing gaps, while developing talent;
-providing a leadership role through the Australia Women
in Security Network (AWSN) which aims to increase the
number of women in cyber security across Australia;
-delivery of a research program to investigate human
susceptibility to phishing emails in conjunction with Data61,
CSIRO’s data, technology and innovation industry body;
-commencement of a partnership with the Australian Computer
Academy (Sydney University), our Australian banking peers,
British Telecom and Aust Cyber (a not-for-profit organisation
promoting Australian cyber security industry and innovation)
to write the cyber security content for the national digital
curriculum for Australian high schools (Years 7–10); and
-collaboration across industry and government to deliver content
for Safer Internet Day, National Scams Awareness week, Stay
Smart Online week and International Cyber Security month.
DATA PROTECTION
Our customers expect us to collect and use their data in a
transparent, fair and responsible way, which is why we remain
vigilant about protecting our customers’ personal information;
it is fundamental to building and maintaining our customers’ trust.
We take our privacy obligations seriously and are committed to
being accountable and transparent with respect to the collection
and handling of our customers’ and employees’ personal data.
We are investing in a variety of data security and privacy-related
initiatives to ensure we are up to date with our regulatory and
legislative requirements and that data is handled appropriately,
securely and in accordance with stakeholder expectations.
Additionally, our Privacy Policy and Information Security Policy
outline how we manage and protect our customers’ and
employees’ personal information and how we will respond
in the event of a data breach.
This year we refined our data breach processes in line with the
Office of the Australia Information Commissioner (OAIC) Notifiable
Data Breach (NDB) scheme and the new European Union (EU)
General Data Protection Regulation (GDPR) requirements. We have
informed all employees of their responsibilities with respect to the
new NDB scheme and introduced a new NDB response process
to ensure that we comply with our notification obligations and
minimise potential harm. Our divisional compliance teams have
undergone training to understand how to assess and take action
in the event of a data breach.
While the GDPR is an EU law, it impacts our Institutional
businesses globally, including our operations both in and
outside the EU. We have appointed a Global Data Protection
Officer to drive improvements in our communications and
processes so as to meet our legal obligations and the
expectations of our EU stakeholders.
26
ANZ 2018 SUSTAINABILITY REVIEW
FINANCIAL CRIME
We have a role in protecting our customers
and the community from financial crime.
Our Financial Crime Portfolio is a team of experts that acts swiftly
and collaboratively to manage threats posed to ANZ, our customers
and community by money launderers, financial supporters of
terrorism, fraudsters, sanctions evaders and other perpetrators
of financial crime. We work with regulators, security and law
enforcement agencies to deter, discover and disrupt financial
crime (see case study on page 30).
All employees and contractors are required to undertake
annual training to ensure awareness and understand their role
in preventing fraud, bribery, corruption, money laundering,
terrorism financing and sanctions.
FRAUD
Changes in the external environment continue to influence our
fraud risk management approach. Fraudsters are using technology
to improve the efficiency, effectiveness and diversity of their attacks.
Our approach to fraud risk management is focused on proactively
minimising the occurrence of fraud and its consequences
to customers, shareholders and employees.
Our Fraud Policy establishes minimum standards for the
prevention, detection and investigation of fraud. The policy
outlines each person’s responsibilities to prevent and detect fraud
and how to report suspected or actual fraud. The policy directs
that all instances of fraud (whether internal or external) must be
reported in accordance with defined reporting requirements.
The implementation of the policy is supported by detailed
requirements including the assessment of fraud risk, measurement
against a defined risk appetite, and the use of technology and
controls to detect and prevent fraud. The requirements also
detail the standards for investigating incidents, including
those involving employees.
We use advanced analytical and detective systems to proactively
monitor and detect suspected fraudulent behaviour.
We also provide customer education and awareness on common
fraud scenarios and we continue to develop and implement better
ways to secure customer interactions with us.
We work in partnership with industry, government and other
organisations to minimise, disrupt and prevent the impacts
of fraud more broadly across the community.
ANTI-MONEY LAUNDERING AND
COUNTER TERRORISM FINANCING
Our Anti-Money Laundering and Counter Terrorism Financing
Program (AML/CTF Program) establishes minimum standards,
guiding and directing our Group-wide approach to detecting
and deterring money laundering and terrorism financing (ML/TF)
activities. Risk assessments are completed both at the enterprise
level as well as country level to identify, manage and mitigate
ML/TF risk across the organisation.
We apply mandatory standards to customer due diligence.
Verification of identity is undertaken using independent and
reliable documents or electronic data. Customers identified
as posing a high risk of money laundering or terrorism financing
are subjected to enhanced due diligence measures and monitoring,
senior management review and compliance approval.
We undertake monitoring to identify transactions that appear to
be abnormally complex, unusual or have no apparent economic or
visible lawful purpose. Transaction monitoring enables us to identify
and manage potential money laundering or terrorism financing.
ECONOMIC AND TRADE
SANCTIONS COMPLIANCE
Our Economic and Trade Sanctions Compliance Program (ETS
Program) establishes minimum standards, guiding and directing
our Group-wide approach to meeting our sanctions obligations.
Risks are assessed to identify, manage and mitigate the sanctions
risk across the organisation. Customer relationships and activities
which pose a higher sanctions risk are subject to enhanced due
diligence measures, monitoring and approval.
ANTI-BRIBERY AND ANTI-CORRUPTION
Our Anti-Bribery and Anti-Corruption (ABAC) Policy prohibits
employees and contractors from engaging in activity that
constitutes bribery and corruption, including offering, promising,
providing, requesting or receiving bribes directly, indirectly
or through third parties, in any form, including kickbacks and
facilitation payments. The ABAC Policy defines unacceptable
behaviour relating to bribery and corruption and directs activities
designed to identify, manage and prevent bribery and corruption.
The ABAC Policy mandates thresholds and recording systems
for gifts, entertainment or sponsored travel given or received.
The framework requires a risk-based approach to the development
and management of key anti-bribery controls, including
third-party and employee due diligence and outlines the
approach with respect to donations, sponsorships, risk
assessments, record keeping, reporting and training.
We assess bribery and corruption risks in order to identify higher
risk jurisdictions, business relationships and business activities
so that controls are in place to prevent and detect such risks.
27
FAIR AND RESPONSIBLE BANKING
RESPECTING
HUMAN RIGHTS
IMPROVING OUR HUMAN RIGHTS
DUE DILIGENCE PROCESSES
Target
Implement strengthened due diligence
for our Human Rights Standards by end 2018.
Performance
Our updated Social and Environmental Risk screening tool
was implemented in October 2017 with our updated online
Social and Environmental Risk training program rolled out
to employees in February 2018.
We expanded the pilot of our strengthened human
rights customer due diligence to three locations in
Asia: China, Indonesia and India. Using the pilot results,
we are considering how to embed the strengthened due
diligence in our general screening for all locations in 2019.
Relevant United Nations Sustainable Development Goals
1
8.7 Take immediate and effective measures to
eradicate forced labour, end modern slavery and
human trafficking and secure the prohibition and
elimination of the worst forms of child labour, and
by 2025 end child labour in all its forms.
10.3 Ensure equal opportunity and reduce
inequalities of outcome, including by eliminating
discriminatory laws, policies and practices and
promoting appropriate legislation, policies and
action in this regard.
In 2017 we focused on improving the way we identify
human rights-related risks in our customer relationships through
a targeted customer screening pilot in Thailand.
The results indicated improved customer engagement and quality
of information in the credit assessment process. Based on these
results we expanded the program in 2018 to cover India, Indonesia
and China.
The new process provides our bankers with a better understanding
of the types of human rights issues that may arise in specific sectors
or activities and is aimed at improving dialogue with business
customers on human rights issues.
The results from the East Asia pilot were also encouraging, with
all countries able to provide adequate information for screening
and improving the qualitative data recorded for customers. We will
implement this strengthened due diligence process across the
Group in 2019.
Our upgraded human rights standards,
Respecting People and Communities:
ANZ’s Approach to Human Rights, has been
guiding our lending, supplier, community
and employee relationships over the past
two years.
Our standards provide a framework for decision-making that is
aligned with stakeholder expectations and reflects developments
in human rights, including the United Nations Guiding Principles
and the Sustainable Development Goals.
Our work is supported by our Code of Conduct, and a number of
Group-wide policies and internal training programs that also reflect
our standards. We are embedding our standards in our everyday
business activities, including through our human resources policies
and in customer and supplier screening tools.
This year we focused on improving our performance
in several areas:
-implementing strengthened due diligence for our Human
Rights Standards;
-updating our Social and Environmental Risk Policy to more
clearly outline our expectation that our business customers
establish effective grievance mechanisms;
-screening our business customers by applying our Social
and Environmental Risk screening tool (including zero
tolerance for land grabs); and
-training our employees on their responsibilities via our updated
online Social and Environmental Risk training program.
1.
We have abbreviated the SDG ‘targets’ to highlight the most relevant contribution by ANZ (see https://www.un.org/sustainabledevelopment/sustainable-development-goals/
for full targets).
28
ANZ 2018 SUSTAINABILITY REVIEW
PHNOM PENH SUGAR COMPANY
After the close of the bank’s reporting year, a much delayed
report was issued by the Australian Government on a
complaint against the bank under Organisation of Economic
Cooperation and Development (OECD) rules. At the time of
preparing this Sustainability Review, the bank was examining
the report for any new information. The complaint under the
OECD rules was made by NGOs in 2014 about our involvement
with the Phnom Penh Sugar Company Co.
We understand it is important that complaint mechanisms
are available to affected stakeholders who may want to raise
concerns about our customers’ or suppliers’ activities.
This is why we encourage and expect that our customers
provide appropriate mechanisms for aggrieved stakeholders
to engage with them.
Our Land Acquisition Position Statement (available on
anz.com/cs) and Human Rights Standards identify the ways
in which concerned external parties can engage with us.
We regularly update our Board EESG Committee and
our ERBC on our progress in implementing our standards.
CASE STUDY
TRAINING
Since 2015, more than 390 Institutional and Corporate
bankers have completed an in-depth, facilitator-led Social
and Environmental Banking training course that includes
consideration of human rights. In addition, employees
with the authority to approve any lending and customer
on-boarding must complete our online Social and
Environmental Risk training course. 3,518 employees
have completed the course since 2015.
OUR PRIORITIES IN 2019
During 2019 we will:
-engage with customers, seeking to ensure that they
have effective grievance mechanisms in place, especially
for large projects;
-continue to strengthen due diligence screening
on our business customers;
-promote internal compliance through training; and
-ensure that our Land Acquisition Statement remains
fit for purpose.
29
FAIR AND RESPONSIBLE BANKING
As a large organisation with an extensive
supply chain — our total spend this year
was $4.9 billion — we recognise that our
procurement activities have social and
environmental impacts.
A key way in which we seek to minimise those impacts is through
our Supplier Code of Practice (SCOP). The SCOP outlines our
minimum requirements for suppliers in relation to governance and
general compliance, human rights, workplace relations, workplace
health and safety, ethical business practices and environmental
management. It aligns with our Code of Conduct, Sustainability
Framework and Our Approach to Human Rights and supports
the Organisation for Economic Co-operation and Development
Guidelines for Multinational Enterprises and the United Nations
Global Compact. It applies to all suppliers across our global
operations and reflects our commitment to working with our supply
chain to understand and minimise the social and environmental
impacts of our mutual business operations. In addition, our SCOP
requires that all suppliers not engage in trade activities or include
in the supply chain any goods or services sourced from sanctioned
persons, countries or organisations in accordance with current
United Nations Security Council sanctions, US sanctions and any
local or regional sanctions as mandated by governments in the
relevant jurisdictions or engage in unethical business practices.
The SCOP was last updated in 2016 to reflect legislative changes,
including the Modern Slavery Act 2015 (UK) and to ensure alignment
with the United Nations Global Compact. This year we have focused
on ensuring that the way suppliers conduct their business meets
our expectations through managing the adherence to the SCOP
via contractual commitment. We request an annual attestation
to adherence to the SCOP for our major suppliers managed
at Group level.
We use a third-party risk-screening tool for all suppliers. The tool
screens suppliers through a lens of 28 environmental, social and
governance issues including human rights. This year we expanded
our screening to include subcontractors and named fourth parties.
ANZ has publicly released statements under the UK Modern Slavery
Act since 2016 and we are consulting with groups such as the
United Nations Global Compact to ensure we are prepared to meet
the obligations for the newly proposed modern slavery legislation
in Australia. We have developed training for Procurement Managers
to ensure they understand what modern slavery is, where potential
risks to ANZ may occur and how to minimise the likelihood of
occurrence. In addition, we have extended the use of the bank’s
whistleblower program to include suppliers and contractors.
We also have a responsibility to facilitate social and economic
growth in our communities through collaboration with
our suppliers. Our Reconciliation Action Plan (discussed on
pages 59–61) outlines the actions we are taking to promote
and support Indigenous suppliers.
In 2018 we became a signatory to the Business Council of Australia’s
Supplier Payment Code (Code). The Code commits us to pay eligible
Australian small business suppliers within 30 days of receiving a
correct invoice. In addition to this we have developed purchasing
and invoicing guides and held webinars with small business
suppliers to help them improve their invoicing and payment
processes. The Code aims to improve the viability of small business
by helping them to manage cash flow and encouraging growth.
SUSTAINABLE
PROCUREMENT
COLLABORATING TO
FIGHT MODERN SLAVERY
In 2018 we joined the Asia Pacific Banker’s Alliance —
a private-public partnership against modern slavery.
The core objective of the Alliance is to map the financial
footprint of modern slavery in the formal banking system
to enhance the ability of financial institutions to identify
and mitigate the risk of modern slavery. As a partner
in the Alliance, we have shared a range of risk indicators,
case studies and contributed to a white paper on modern
slavery in an effort to raise awareness about the issue
and combat modern slavery alongside other members
of the Alliance.
This builds upon previous work conducted with the
Asian-based Anti-Money Laundering and Countering the
Financing of Terrorism Industry Partnership, which focused
on human trafficking. Our continued partnership with
Liberty Asia further assists in the prevention of human
trafficking and slavery.
We have maintained our partnership with the Asia Pacific
Financial Coalition Against Child Pornography and continue
to collaborate with the Singapore-based International
Centre for Missing and Exploited Children to help eradicate
the online exploitation of children.
We are also a contributor to the Australian and New Zealand
private-public partnerships to combat money laundering
and terrorism financing.
HIGHLIGHTS
30
ANZ 2018 SUSTAINABILITY REVIEW
RESPONSIBLE
BUSINESS LENDING
To shape a world where people and
communities thrive, we need to ensure
our business lending standards continue
to evolve to reflect the expectations
of our stakeholders.
Our Social and Environmental Risk Policy sets out the principles
and standards we apply to all Institutional and Corporate
banking customers (business customers) and their activities
to ensure consistent management and mitigation of social and
environmental risks. It is important that we understand the social
and environmental risks associated with our financing decisions
as it helps avoid reputational and economic loss associated with
customers who may not be managing these risks appropriately
or who are engaged in activities that are not sustainable in the
long term. When we take the time to understand these issues and
encourage and support our clients to manage them effectively,
we can deliver on our responsibilities to society while protecting
ANZ from potential financial loss and reputation damage.
We monitor the social and environmental risks of our business
customers through our monthly ‘Reputation Risk Radar’. Notable
publicly reported incidents and allegations are referred to
our regular risk management meetings that consider social,
environmental, governance and credit risks. Meetings are attended
by risk officers and banking relationship managers. We also rely
on regular dialogue between relationship managers and their
customers to alert us to issues.
Where customer practices may not be consistent with our
policies, we work with the customer to understand the
circumstances and, where necessary, identify specific and
time-bound improvement plans. If prospective or existing
customers do not meet our standards and they are not willing
to adapt their practices in an appropriate timeframe, we may
decline financing or exit the relationship.
Our purpose is influencing the customers and industry sectors
we choose to bank. For example, we have considered how
banking tobacco manufacturers aligns with our purpose. After
some debate we determined that we did not want to support
tobacco manufacturing, regardless of the returns. We have sought
to manage our exit in an orderly, fair and professional manner with
minimal financial impact on our shareholders and treating some
longstanding customers with respect. Since making this decision
in mid-2016, our exposure to tobacco manufacturing has gone
from almost $600 million to around $4 million in one residual
line of credit in one country that will mature soon.
REVIEW OF OUR SOCIAL AND
ENVIRONMENTAL RISK POLICY —
INCLUDING SENSITIVE SECTORS
Target
By end 2018, ensure emerging issues and leading practices
are reflected in the policies and procedures guiding our
business lending decisions by:
-reviewing and, where necessary, updating our Social
and Environmental Risk Policy (including sensitive sector
standards); and
-amending our risk appetite and customer assessment
processes to increase emphasis on climate change risks
and management.
Performance
We reviewed a set of priority issues and sectors, including
measures to reduce carbon emissions, with recommended
changes to the policy approved and on track to be
published by December 2018.
Climate change risk has been added to the Group and
Institutional Risk Appetite Statements.
One of the key ways that we identify and manage the risks
associated with our business lending is through the application
of our Social and Environmental Risk Policy and accompanying
‘sensitive sector’ requirements for energy, extractive industries,
forestry and forests, military equipment, hydropower and water.
The Policy incorporates social and environmental considerations
into lending decisions for all customer sectors. Relationship
managers are required to respond to a broad range of social
and environmental questions before the bank enters into
a relationship with any customer. Our credit policy requires
customer relationships to be reviewed regularly, which includes
considering any social and environmental issues.
All business customers continue to undergo regular screening
using our social and environmental risk screening tool.
This year we reviewed our Policy to ensure that it appropriately
reflects emerging issues and leading practices, focusing on a
number of priority issues and sectors, ie grievance mechanisms,
palm oil financing, and measures to reduce carbon emissions
in the energy, transport, building and agricultural sectors.
31
FAIR AND RESPONSIBLE BANKING
We have strengthened our Policy in several areas, including:
-an expectation that customers maintain appropriate grievance
mechanisms in line with the United Nations Guiding Principles
for Business and Human Rights, especially relevant for large
projects, eg. mining or others with significant community
impacts (land acquisition for soft commodities such as palm
oil and sugar). We will also reflect these expectations in our
Human Rights Standards;
-require customers with palm oil operations to have established
‘No Deforestation, development on Peat, Exploitation of people’
(NDPE) policies or commit to a NDPE policy within a time-bound
period, and certification of practices under the Roundtable
on Sustainable Palm Oil or equivalent standards; and
-excluding new-to-bank lending to customers whose thermal
coal assets exceed 50% of revenue, installed capacity or
generation (mining, transport, ports and power generation).¹
To improve transparency and to facilitate more informed
engagement with our stakeholders, we will publish our full
Policy together with more detailed summaries of sector-specific
standards in our ‘sensitive sector’ information statements
on anz.com/cs.
We continue to apply a strengthened due diligence for thermal coal
extraction and associated coal transport customers. We expect our
customers in all sectors to implement appropriate stakeholder
engagement strategies and plans and we have included this
consideration in our screening tool.
The Policy incorporates relevant content of our Human Rights
Standards including our ‘zero tolerance’ for improper land
acquisition and involuntary resettlement.
EMPLOYEE SUSTAINABILITY TRAINING
We have a range of social and environmental training programs
to educate our employees on our policies and standards and how
they are applied in practice. This year more than 700 employees
completed our foundation course: online Social and Environmental
Risk training, which covers our Sustainability Framework, Sensitive
Sector requirements and our approach to human rights.
This training is available to all employees and is mandatory
for new employees able to make credit decisions for
business customers.
1.
Coal used for power generation.
PROVIDING INCENTIVES
FOR CUSTOMERS TO ACHIEVE
HIGHER SUSTAINABILITY
STANDARDS
This year we participated in the successful completion
of Olam’s debut US$500 million three-year sustainability-
linked loan which involved 14 other lenders. This is the first
sustainability-linked club loan in Asia that links the interest
margin on the loan to specific sustainability targets. The loan
facility saw a highly successful launch and was well-received
by the market.
“We are proud to be the first company in Asia and the
agri-sector to secure a sustainability-linked medium-term
club loan that links interest rate on the loan to achieving
clear sustainability targets,” said Sunny Verghese, Olam’s
Co-Founder and Group CEO.
Olam, under the terms of its loan, is committed to
meeting improvement targets for a comprehensive
range of Environmental, Social and Governance (ESG)
metrics, as assessed by Sustainalytics.
Olam will be tested on over 50 ESG metrics annually, and,
if the pre-set improvement targets are achieved, the interest
margin on the facility will be reduced. That means it will
have two opportunities during the life of the three-year loan
to reduce its interest margin.
“The debut sustainability linked revolving credit facility is
unique as it’s the first of its kind in Asia. As a key relationship
banker to Olam, we’re pleased that they’ve recognised ANZ
as a partner who cares about ESG in its way of doing
business,” said David Leong, Head of Specialised
Industries, Singapore.
CASE STUDY
32
ANZ 2018 SUSTAINABILITY REVIEW
EQUATOR PRINCIPLES
The Equator Principles are a set of voluntary standards designed
to help financial institutions identify and manage social and
environmental risks associated with the direct financing of
large infrastructure projects such as dams, mines and pipelines.
We regard them as complementary to our sensitive sector
requirements, and our Social and Environmental Risk Policy.
As a signatory since 2006, we have fully integrated compliance
with the Equator Principles into our policies and processes.
Implementation is a joint responsibility of our relationship
managers, credit officers and specialist Equator Principles
resources, with advice from qualified independent consultants as
required. We apply the Equator Principles globally across industry
sectors to our project finance advisory services, project finance,
project-related corporate loans and bridge loans. We will not
provide finance to projects where the customer will not, or is
unable to, comply with the Equator Principles. Information on our
2018 project finance advisory services and transactions is available
on page 74.
During 2017 and 2018 the Equator Principles Association has
undertaken a targeted review of the Equator Principles (EP4)
and commenced discussions across the Association focusing
on four broad areas:
1. social impact and human rights;
2. climate change;
3. designated countries and applicable standards; and
4. scope of applicability of the Equator Principles.
We have actively participated in these discussions at an Association
and Working Group level and have worked collaboratively to help
draft proposed text changes. The Equator Principles Association
aims to be ready for Round 2 of external stakeholder consultation
in Q1 2019 with final recommendations scheduled to be put
forward for consideration later in 2019. For further information
refer to: equator-principles.com/ep4/.
CHALLENGES IN APPLYING
OUR STANDARDS TO
REFINANCING EXISTING PROJECTS
This year we were approached by a long-term Institutional
bank customer to participate in a refinancing of debt
facilities for a large infrastructure project they operate in
Asia. Being asked to participate in refinancing arrangements
for existing projects can be challenging if we have not
been involved in financing the construction of the project
because during the construction process we often learn
significant details about the project and its social and
environmental performance.
Several years ago, this customer approached us to
finance the same infrastructure project while it was
being constructed. After reviewing the project details
at that time, we decided it should be assessed against the
Equator Principles, including independent monitoring by
a third party. The customer acknowledged our request but
decided to seek financing from a number of other financial
institutions. We did not participate in the project funding.
Since those discussions, we have continued to engage
with the customer and advocate the benefits of attaining a
higher level of social and environmental performance, such
as improved access to capital and a broader investor base.
We have been pleased to observe evidence of the customer
progressively ‘stepping up’ its approach, including investing
in health and safety improvements as well as meeting
international standards for factory dormitory design
and management.
We believe that partly through our advocacy, in addition
to evolving market and community expectations,
our customer has matured its business approach and
management position and sees the importance of
achieving higher international standards. They have agreed
to align their financing to international standards under
the Equator Principles, including many elements of our
original recommendations.
Applying our social and environmental standards
consistently — both during project development and
for any refinancing arrangements — is one way that
we can ensure our financing for projects meets the
highest standards.
CASE STUDY
33
FAIR AND RESPONSIBLE BANKING
APPLYING THE EQUATOR PRINCIPLES
During 2018 we were invited to participate in the financing
of an offshore wind farm development in Asia (the project).
The environmental and social review of the project was prepared
based on the Equator Principles. The project was categorised
as Category B.
An Independent Environmental and Social Due Diligence review
assessed the project against the Equator Principles, International
Finance Corporation Performance Standards, local laws, as well as
the World Bank Group Environmental, Health and Safety Guidelines
for Wind Energy. Documents reviewed included the Environmental
Impact Assessment report, permits and licences, and health, safety
and environmental monitoring plans.
Key environmental and social issues that required continuous
monitoring and reporting during construction and operation were
identified. These included impacts on critical habitats for sea life,
migratory birds and fishery productivity, as well as issues regarding
pollution and marine heritage. In terms of social issues, an agreement
was reached with local fishermen for compensation for potential loss
of fishery productivity.
The potential impacts on local sea life were of concern to government
and non-government organisations, and consequently the project
company committed to taking certain measures to ensure impacts
were either avoided or mitigated.
Actions included:
-locating the facility in an area avoiding the critical habitats identified;
-implementation of preventive and noise mitigation measures to
minimise disturbance to local sea life as a result of construction noise;
-close monitoring of sea life activities in the vicinity of the project
area by experts; and
-establishment of safety zones (based on local laws and international
standards) near the project area with construction activities to be
halted if sea-life is observed within these zones.
Overall, the independent environmental and social consultant
was satisfied with the mitigation measures provided by the project
company on the identified environmental and social issues. The
environmental and social management and monitoring plans were
also considered to be adequate. As a result, we agreed to participate
in the financing of the project.
34
ANZ 2018 ANNUAL REVIEW
CASE STUDY
ENVIRONMENTAL
SUSTAINABILITY
CLIMATE CHANGE — MANAGING
RISKS AND OPPORTUNITIES
We are helping our customers adapt
to one of the ‘big shifts’ underway:
the transition to a low carbon economy.
We acknowledge the position of the Intergovernmental Panel
on Climate Change (IPCC) that to achieve the full ambition of the
Paris commitments the world needs to transition to net-zero
emissions by mid-century.
1
This year we reviewed our approach to climate change,
focused on our lending to our corporate and institutional business
customers. We considered options to increase our ambition
to help lower carbon emissions in a socially and economically
responsible manner.
Around 37% of the world’s electricity comes from coal-fired power
stations and in Australia, many communities, particularly in regional
areas, are reliant on the coal industry for employment. As we move
to cleaner energy sources we must do so in a way that does not
compromise these communities, or leave them behind.
In seeking to support the shift to a low carbon economy, we intend
to do so in a way that provides new economic opportunities and
helps people and communities thrive.
Our approach is to:
1. help our business customers transition by encouraging
them to identify their climate change risks, create transition plans
and report publicly and transparently on their progress;
2. support emerging industries to promote economic growth; and
3. reduce our own impact by managing and reducing
our own carbon footprint.
RENEWING OUR SUPPORT FOR PARIS
The transition to a net-zero carbon economy requires a ‘whole
of-economy’ approach, with all sectors having a role to play.
Our focus is on ensuring an orderly and just transition that gives
careful consideration to the impacts on communities and manages
our climate-related risks, while increasing our ambition to lower
emissions in the energy, transport, buildings and agricultural sectors.
Our revised approach commits us to the following actions:
-fund and facilitate at least $15 billion by 2020 towards
environmentally sustainable solutions for our customers including
increased energy efficiency in industry, low emissions transport,
green buildings, reforestation, renewable energy and battery
storage, emerging technologies (such as carbon capture and
storage) and climate change adaptation measures;
-encourage and support 100 of our largest emitting customers in
the energy, transport, buildings and food, beverage and agricultural
sectors to establish, and where appropriate, strengthen existing low
carbon transition plans, by 2021;
-encourage customers that have coal-fired generation assets to
work towards setting medium and long-term emission reduction
targets up to 2050 that contribute towards achieving a ‘less than
2 ̊C target’;
-no financing for new conventional coal-fired power stations, and
we will only consider direct financing for the development of new
coal-fired power stations that emit no more than 0.8t CO
2
/MWh;
-focus on existing customers producing coal that when used
for power generation results in lower emissions and reducing
our exposure to thermal coal mining. This means we will also
only consider lending to new customers involved in coal-related
mining, transport and power generation if their thermal coal
operations are less than 50% of their revenue, installed capacity
or generation;
-provide incentives for customers to reduce emissions, such as
facilitating, together with government, concessional loans for
corporate and agribusiness customers to buy energy efficient
equipment; and
-only finance the construction of new large-scale office buildings
which achieve or exceed a NABERS 4.5 star standard (or equivalent
international rating) ‘as designed’.
A JUST TRANSITION
We believe that all stakeholders in the transition to lower
emissions should give careful consideration to the impacts on
affected communities. Power prices in Australia have increased
significantly due to a range of factors. This has added to cost
of living pressures for many in the community.
Employment opportunities have been created by the transition
but some communities, particularly in regional areas reliant on
the coal industry for employment, will suffer significant social
and economic costs if the transition is poorly managed.
To facilitate an orderly and just transition across the economy,
we are committed to helping ensure that social impacts and
costs are not treated as a secondary issue.
This is one of the reasons why we are seeking long-term, public
transition plans from our major emitting customers. This will help
communities and governments anticipate and adjust to change
over time. We expect our customers with large coal-fired power
plants to provide at least three years advance notice of closures
and engage with all their stakeholders to minimise the impact on
their workers, local communities and downstream energy users.
Further, we will support and commit to our involvement in
customer, community and government efforts to help ensure
an orderly and just transition.
1.
IPCC Special Report on Global Warming of 1.5°C — released 8 October 2018.
35
ENVIRONMENTAL SUSTAINABILITY
WE ARE IMPROVING
TRANSPARENCY
Climate risk disclosure is evolving and we acknowledge it can
be difficult for stakeholders to compare information reported by
different banks. For the second year our disclosures are aligned with
the recommendations of the Financial Stability Board’s Task Force on
Climate-related Financial Disclosures (TCFD). Our disclosure includes
1) how we identify climate-related risks and opportunities; 2) who
is accountable for managing the risks and opportunities; 3) how
climate change informs our business strategy; and 4) the actions
we are taking, including metrics and targets, to measure our
progress. Our disclosures are contained in our 2018 Annual
Review available on anz.com/annualreport.
Our 2017 disclosures were recently reviewed by the TCFD.
1
While the report confirmed our disclosures used many of their
recommendations, there were some suggestions for improvement.
For example, it was suggested we provide information on a wider
range of customers (beyond the thermal coal supply chain) and
risks, particularly physical risks. We are considering the TCFD’s
feedback on our disclosures and will continue to seek to
improve their usefulness to stakeholders.
For example, in 2019, we will seek to enhance our understanding
of climate-related risks associated with our residential mortgage
portfolio by:
-undertaking a geospatial analysis of current flood-related
risks in a specific location; and
-developing indicators to test the financial capability of home
loan customers to withstand the identified risks.
CLIMATE-RELATED SCENARIO ANALYSIS
Our business needs to be resilient under a range of climate-related
scenarios. To improve our capacity to use scenario analysis as an
input to our strategy, we joined with 15 other banks this year to
develop methods to improve stress testing of our business lending
portfolio for climate-related risk. This work sought to overcome
some of the challenges facing banks in modelling climate-related
risks, for example:
-identifying the potential economic impact of climate-related
scenarios, eg. changes to commodity prices or production and
impact on customer revenues; and
-assessing these potential impacts on a customer’s capacity to repay
debt (ie. credit risk) over a longer period.
The working group was coordinated by the United Nations
Environment Programme Finance Initiative (UNEP FI). During the
pilot we developed and tested approaches and methodologies to
inform our risk management and identify opportunities to support
our customers, considering both ‘transition risks’ and ‘physical risks’.
We stress tested customers within the mining and metals (transition
risk) and agriculture (physical risk) sectors, and results were in line
with our expectations. For example, in our Australian commodity and
geographically diverse agricultural loan book, the portfolio customer
credit rating remained relatively stable in three out of four climate
scenarios tested, with a downgrade of one level under a 4°C warming
scenario. More significant impacts were identified for individual
customers with weaker credit profiles and for some depending on
their location and the commodity produced. These results will inform
discussions with our customers as we seek to support them to
manage risk and identify business opportunities, such as investing
in assets or commodities that are more resilient to climate change.
Building on work undertaken in 2017, we continued scenario
testing a select group of customers in the thermal coal supply chain
(encompassing extraction, coal rail transport, coal associated ports
and coal-fired power generation). We re-tested some customers
to look for significant changes since our earlier assessment, and
included some new customers not tested in 2017. Our engagement
this year with a number of these thermal coal customers
supplemented our scenario testing and improved our understanding
of how they are managing the potential impacts of climate change,
including their ability to adapt their business strategy.
Our analysis revealed varying degrees of preparedness for thermal
coal customers in managing transition risks. In the medium to long
term, risks are higher for companies with higher revenue reliance on
thermal coal and with business strategies less prepared for an early
shift to a low carbon economy. In the short term, these customers
have benefited from robust demand for high quality thermal coal
in Asian markets.
SCENARIO ANALYSIS
The Financial Stability Board’s Taskforce on Climate-related
Financial Disclosures has recommended that banks and
organisations should use scenario analysis to assess
their climate-related risks.
WHAT IS SCENARIO ANALYSIS?
A scenario is not necessarily what the company thinks
will happen, but what could happen. Scenario analysis
can be used to test whether business strategies are
sufficiently robust and flexible to withstand potential
implications — in this case from climate change.
1.
https://www.fsb_tcfd.org/publications/tcfd-2018-status-report/.
36
ANZ 2018 SUSTAINABILITY REVIEW
1.
Energy Efficiency 2018 report: https://www.iea.org/efficiency2018/
37
ENVIRONMENTAL SUSTAINABILITY
NEXT STEPS
We will continue to engage with our thermal coal and other
customers to understand how they are preparing their businesses
to manage potential transition risks. A number of our customers have
begun releasing disclosures in line with the TCFD recommendations
— this is informing our customer conversations.
We will also continue to have climate-related discussions with our
agricultural customers, particularly those in areas of variable or low
average annual rainfall.
Our scenario-based assessment is part of a gradual improvement
to our climate-related disclosures. We plan to expand this over future
years to include other sectors exposed to the regulatory, physical
and transitional risks of climate change.
CLIMATE RISK MANAGEMENT
We have disclosed our most material economic, environmental and
social sustainability risks in our 2018 Annual Review (see page 13)
and 2018 Annual Report (see page 38) on anz.com/annualreport
in accordance with the ASX Corporate Governance Principles
and Recommendations.
Our most material climate change risks and opportunities result
from our lending to business and retail customers, including
credit-related losses incurred as a result of a customer being
unable to repay debt.
Under our risk management framework, our material risk
category of Credit Risk incorporates the risks associated with
lending to customers that could be impacted by climate change
or by changes to laws, regulations, or other policies such as carbon
pricing and climate change adaptation or mitigation policies.
It also includes changes to the cost and level of insurance cover
available to our customers. We also specifically include climate
change as one of our Principal Risks and Uncertainties (available
on anz.com/annualreport). Climate change risk has been added
to the Group and Institutional Risk Appetite Statements to ensure
the risk is appropriately identified and assessed.
We are also developing an organisational culture that encourages
regular discussion and consideration of emerging climate-related
risks. Our Risk team is working with our bankers, encouraging them
to talk with customers about managing the risks and opportunities
associated with climate change.
Our risk assessment may examine, for example, customer exposure
to physical climate risk, such as adverse weather events impacting
on their business operations. Transitional risk may also be considered
— customers in particular industries may be negatively impacted
as a result of policy change as governments around the world seek
to limit emissions in line with their Paris commitments.
THE IMPORTANCE
OF ENERGY EFFICIENCY
Energy efficiency in buildings will play a key role in
delivering deep emissions reductions. With a significant
expansion in building floor area expected over the next
two decades, the International Energy Agency (IEA) has
found
1
it will be vital to unlock new sources of finance
to deliver efficient new buildings and upgrade existing
stock. ANZ is already making considerable steps to mobilise
finance into more energy efficient commercial buildings.
In 2015 we issued a $600 million, five year fixed rate
green bond that finances, a portfolio of loans to renewable
energy projects and commercial low carbon buildings
in the Asia Pacific region. The portfolio includes ANZ’s
lending to Southern Cross towers located in Melbourne’s
Central Business District.
Southern Cross Towers comprises two buildings with
a combined office space of around 122,000m
2
spread
over 58 levels, and includes a number of innovative design
features to limit energy use. Among the major tenants
of the two buildings are Australian and Victorian Government
agencies that are required to meet minimum energy
performance standards for their leased office space
in accordance with the National Green Leasing Policy.
This policy aims to reduce the environmental impact
of buildings by requiring building owners to maintain a
minimum energy base building rating of 4.5 stars under
the National Australian Built Environment Rating System
(NABERS) and a 4 star NABERS Water rating. Both buildings
have managed to attain these ratings since they commenced
operation, with the smaller west tower at 111 Bourke St having
a 5 star base building energy rating and a 4.5 star water rating.
It makes sense for us to set a minimum 4.5 star energy
rating for the financing of new large-scale office buildings.
From a credit risk perspective, energy efficient buildings
generally have lower tenancy vacancy rates and may
attract higher rents.
CASE STUDY
We recognise that levels of risk exposure and potential impacts
vary across industry sectors, and within individual businesses,
and we build this variation into our risk assessment.
We expect that in the future our customers’ public disclosures
in line with the TCFD recommendations will help us to understand
their preparation for, and management of, their most likely
climate-related risks and opportunities.
Our customers mining for coal, oil and gas, as well as those in
coal-fired power generation, and related industries, are increasingly
exposed and may experience transitional risk as a result of decreasing
demand for fossil fuels and increasing demand for clean energy. We
encourage customers in these sectors to plan for, and start making,
the necessary changes for the transition.
Our exposure to the most carbon-intensive forms of energy
generation has declined since 2015 when we released our
revised Climate Change Statement. This decline is partly an
outcome of active portfolio management, informed by our credit
strategies. These industry credit strategies (known as Risk Appetite
Statements) reference our Climate Change Statement and relevant
industry standards. As mentioned above, they also reflect risks
associated with climate change, influencing decisions about
business strategy and capital allocation.
TCFD-RELATED METRICS
AND INDUSTRY EXPOSURES
For the first time we have disclosed credit metrics and our
exposures to various sub-industries in four key sectors identified
by the TCFD to be most exposed to climate-related risks: energy,
transportation, materials and building, and agriculture, food and
forestry products. Our overall exposure to these four industry
sectors is 19% of the Group exposure at default (EAD).
In terms of credit metrics, we have observed:
-improved percentage of investment grade exposures for
all four sectors — 80% of our energy customers are rated
investment grade, reflecting our strategy to bank larger,
well-rated clients; and
-a decline in proportion of non-performing loans to 0.5% overall,
primarily because provisions are at a low point of the cycle.
The average loan term is relatively short for the majority of our
exposures: 87% of total loans to customers in the four sectors are
due for repayment in less than five years. Also disclosed is a more
detailed industry and sub-industry breakdown of our exposures
to the four sectors identified by the TCFD (see following page).
AGRIBUSINESS AND
CLIMATE CHANGE
We bank a large number of agribusinesses in rural and
regional Australia and New Zealand. Many of these regions
have been impacted in recent years by drought and high
temperatures, adversely affecting production levels and
potentially customers’ revenues.
Prolonged drought can also have significant economic
and social consequences for farmers and their families
along with the many rural communities that have high
economic dependency on the farming sector. With Australia
and New Zealand being major exporters of agricultural
commodities, declining agricultural productivity caused
by drought can also have detrimental effects on global
food security, especially if it coincides with low yields
in other agricultural regions.
Supporting our rural and regional customers through
prolonged drought helps them to avoid falling into arrears
on their loans. This can often be a difficult situation for
these customers to extract themselves from given the often
uncertain and seasonal nature of their income. Support
measures, such as the drought relief package announced
in August 2018, are an important tool to help manage credit
risks associated with the physical impacts of climate change.
More information on the drought relief package and other
assistance packages announced in the last year is available
on pages 67–68.
38
ANZ 2018 SUSTAINABILITY REVIEW
TCFD-RELATED METRICS
AND INDUSTRY EXPOSURES
INDUSTRY GROUPS AND CREDIT QUALITY SUMMARY
1
Exposure at Default
(EAD) ($b)
Non-performing loans
(% of sector EAD)
Investment grade
(% of sector EAD)
201820172016201820172016201820172016
Energy28.728.327.80.1%0.3%1.4%80.0%79.6%79.5%
Transportation16.515.316.60.3%0.8%0.5%63.9%61.0%63.0%
Materials and Building92.585.891.10.4%0.6%1.0%40.9%35.9%36.3%
Agriculture, Food and Forestry42.341.842.80.9%1.1%1.3%35.8%30.8%31.6%
Total179.9172.1178.30.5%0.7%1.1%48.0%44.1%44.4%
EXPOSURES TO KEY TCFD SUB-INDUSTRIES
EAD ($b)
201820172016
EnergyOil and Gas 18.418.017.7
Coal Mining
2
1.41.11.5
Electric Utilities8.99.18.6
TransportationAir Freight
3.43.33.4
Passenger Air
Maritime Transportation1.71.72.2
Rail Transportation2.01.51.5
Trucking Services5.15.55.9
Automobiles4.33.33.7
Materials and BuildingMetals and Mining6.76.77.5
Chemicals2.61.92.8
Construction Materials1.81.71.8
Capital Goods20.319.521.1
Real Estate Management and Development61.155.957.8
Agriculture, Food
and Forestry Products
Beverages3.02.93.0
Agriculture31.230.731.1
Packaged Foods and Meats7.17.07.5
Paper and Forest Products1.01.21.2
1.
Values may not add to totals due to rounding.
2.
Coal mining includes exposures to metallurgical (coking) coal used for steel making and thermal coal used for energy generation.
39
ENVIRONMENTAL SUSTAINABILITY
FINANCED EMISSIONS
Over the past five years, there has been a downward trend
in the emissions intensity of electricity generation assets that
we directly finance. While our exposure to renewable energy
assets within Australia increased by 13% on the previous year
to $686 million, this was not matched by a corresponding
decrease in the emissions intensity of the generation assets
we are exposed to. Rather, there was a 14% increase in emissions
intensity to 0.66t CO
2
/MWh. This was primarily caused by a shift
in our exposure from operational renewable assets to ones that
are under construction, which meant less generation from
renewables throughout the reporting year. We did not add
any new thermal power projects to our project finance
portfolio over the past year.
The average emissions intensity of generation we finance
continues to be below the grid average in Australia and by
financing new renewables projects such as the Murra Warra
wind farm in north western Victoria, and the Granville Harbour
wind farm in Tasmania, we are contributing to Australia’s
long-term transition to cleaner energy.
For electricity generation assets located outside of Australia, there
has been a 68% reduction in the average emissions intensity of
generation over the past four years. This reduction was mainly
caused by the removal of a gas-fired generation asset from the
portfolio and continued high production of electricity from wind,
hydro and geothermal assets.
Tonnes CO
2
–e per MWh
electricity generated
AustraliaOutside
Australia
20180.660.08
20170.580.24
20160.620.16
20150.640.20
20140.770.25
Movement 2014–2018-14%-68%
INCENTIVES FOR ENERGY EFFICIENT EQUIPMENT
FOR SMALL BUSINESS AND RETAIL CUSTOMERS
In partnership with the Australian Government’s Clean
Energy Finance Corporation (CEFC), we are helping business
customers to invest in energy efficient and renewable energy
technologies that will help reduce their energy and fuel costs.
For example, Bertazzo Engineered, a family-owned metal
fabrication company based in Wodonga, invested in two new
laser cutter machines that use 74% less electricity than the
machine previously used. As a result they have been able to
expand production using less energy, saving over $20,000 in
annual electricity costs and avoiding the need to upgrade
to an expensive transformer.
Through the program, eligible assets like the laser cutter
machines are financed at a 0.7% p.a. discount to the standard
asset finance rate, with finance available for up to 100%
of the cost for projects up to $5 million.
In the first 12 months of this program, ANZ has helped facilitate
almost $60 million of investment in renewable and energy
efficient technologies. More than half of the investment has
gone into energy efficiency projects that are helping to shield
business customers from rising energy costs and are also
contributing to Australia’s carbon-reduction commitments.
We have also pledged NZ$100 million of interest-free home
lending in New Zealand to help insulate homes and save
on energy costs. See case study on page 48.
CASE STUDY
40
ANZ 2018 SUSTAINABILITY REVIEW
FINANCING THE TRANSITION
TO A LOW CARBON ECONOMY
The provision of finance to support the
transformation of the economy is essential
if the objectives of the Paris Agreement
are to be met.
We are working with our customers to support the transition to
cleaner energy and more environmentally sustainable practices
in other key sectors, focusing on lower emissions, improved
water stewardship and waste reduction.
Around 37% of the world’s electricity comes from coal-fired
power stations.
1
While coal remains a cheap and reliable energy
source in both developed and emerging economies, a low carbon
transformation of the power sector is underway as the cost of
renewables falls and governments focus on implementing their
Paris commitments. Our support of new electricity generation
projects reflects this.
LOW CARBON AND SUSTAINABLE
FINANCE OPPORTUNITIES
Target
Fund and facilitate at least $15 billion by 2020 in low
carbon and sustainable solutions including renewable
energy generation, green buildings and less emissions
intensive manufacturing and transport.
Performance
ANZ has funded and facilitated $11.5 billion in
low carbon and sustainable solutions since 2015.
Relevant United Nations Sustainable Development Goals
2
7.2 By 2030, increase substantially the share
of renewable energy in the global energy mix.
9.1 Develop quality, reliable, sustainable and
resilient infrastructure, including regional and
transborder infrastructure, to support economic
development and human wellbeing, with a focus
on affordable and equitable access for all.
9a Facilitate sustainable and resilient
infrastructure development in developing
countries through enhanced financial,
technological and technical support.
13.1 Strengthen resilience and adaptive capacity
to climate-related hazards and natural disasters
in all countries.
In the past year we have funded two new renewable projects in
Australia and refinanced a $312 million facility to support an existing
customer’s renewables and gas portfolio. We also acted as financial
adviser to a number of renewable energy projects and successfully
raised equity and debt for around 600MW of new renewable energy
generation capacity.
We have not provided direct funding to any new coal-fired
power generation projects since 2015, although we do provide
some general finance to customers with generation assets,
enabling them to pay employee salaries, provide a safe
workplace and continue operations.
In line with our commitment to environmental sustainability,
we have amended the wording of our target (effective 2019)
making it clear that, in addition to low carbon initiatives, we are
focused on funding and facilitating initiatives that improve water
stewardship and minimise waste.
Over the last 12 months, we have provided a range of finance
and advisory services to the clean energy sector as well as other
customers to support their investment in activities that reduce
or eliminate greenhouse gas emissions or minimise waste. Our
Sustainable Finance team works closely with many of our customers
and continues to extend our capability, in collaboration with our
relationship, product and risk specialists, to deliver sustainable
financing solutions for customers across a range of sectors.
We are a market leader in the Australian and New Zealand
sustainability bonds (including green bonds) and loans market
and are playing a leading role in linking capital markets with
sustainable investment opportunities, including infrastructure.
We are recognised for our expertise in providing value-add ’green’
structuring services to our clients, in conjunction with our well-
established debt and capital markets execution and distribution
capability. Since May 2015, we have been a joint lead manager on
$11.4 billion of sustainability bonds, including green bonds, and
loans across AUD, NZD, USD, EUR and CNY for issuers across Asia
Pacific in the Supra Sovereign Agency, Financial Institutions, and
Corporate sectors. This includes leading $3.1 billion of transactions
in the last 12 months.
Recent capital markets transactions include Bank Australia’s
$125 million sustainability bond and Auckland Council’s
NZ$200 million green bond (New Zealand’s first green
bond issue).
1.
IEA: https://www.iea.org/tcep/power/coal/.
2.
We have abbreviated the SDG ‘targets’ to highlight the most relevant contribution by ANZ (see https://www.un.org/sustainabledevelopment/sustainable-development-goals/
for full targets).
41
ENVIRONMENTAL SUSTAINABILITY
42
AUCKLAND COUNCIL GREEN BOND
Green Bonds are debt instruments that raise funds for new and
existing projects, assets or business activities with a ‘green’ or
environmental benefit, such as renewable energy, low carbon
buildings, low carbon transport, water and waste management.
In June 2018, we acted as green bond coordinator, arranger
and sole lead manager for the first green bond issued by
a New Zealand borrower.
Auckland Council’s NZ$200 million five-year green bond provides
funding for low carbon public transport in Auckland, specifically
the acquisition of electric trains.
The inaugural green bond issue was a landmark transaction for
both Auckland Council and New Zealand’s domestic capital markets.
As the green bond coordinator, we worked closely with Auckland
Council to establish its green bond framework, identified green
assets and ensured that the bond aligned with both the International
Capital markets Association (ICMA) Green Bond Principles and
Climate Bonds Standard.
Photo credit: Auckland Transport.
42
ANZ 2018 ANNUAL REVIEW
CASE STUDY
ENVIRONMENTAL
SUSTAINABILITY
REDUCING OUR
ENVIRONMENTAL FOOTPRINT
We measure and report our environmental
impact across the 34 markets in which we
operate. We also report our environmental
performance using a number of voluntary
and compliance mechanisms including
the Australian Government’s National
Greenhouse and Energy Reporting Scheme,
the National Carbon Offset Standard
Carbon Neutral Program, CDP (formerly
the Carbon Disclosure Project) and the
Dow Jones Sustainability Index.
Our current environmental sustainability target cycle commenced
1 July 2017 with the first full year of performance against these
targets presented below.
CARBON
Target
Reduce scope 1 and 2 emissions by 24% by 2025
and by 35% by 2030 (against a 2015 baseline)
1
Performance
Scope 1 and 2 emissions have decreased by 18%, tracking
ahead of the required reduction to meet our target.
Relevant United Nations Sustainable Development Goals
7.3 By 2030, double the global rate of
improvement in energy efficiency.
13.3 Improve education, awareness-raising
and human and institutional capacity on climate
change mitigation, adaptation, impact reduction
and early warning.
Our business operations have been Net Zero Carbon since 2010.
We have reduced our carbon footprint through a combination
of energy, water and waste savings, building optimisation and
employee engagement. We continue to evolve our approach
to Net Zero Carbon as we explore and adopt innovative ways
to measure and reduce our carbon footprint.
Last year we adopted a ‘science-based’ target that commits
us to reducing our operational carbon footprint in line with the
decarbonisation trajectory required to keep the increase in global
temperate below 2°C above pre-industrial levels.
We prepared our target using the Science Based Targets Initiative
(SBTI) methodology, however this does not include emissions arising
from our financing activities (scope 3) given there is currently
no standard framework or SBTI methodology to account for these
emissions. We will continue to monitor and consider participating
in future developments in this area.
We are tracking well against our targets with an 18% reduction
against our 2015 baseline. This reduction is mostly due to continued
consolidation of our building portfolio, ongoing implementation
of energy saving initiatives and aligning our building standards
with best practice sustainable building design principles.
For example, throughout 2018 we implemented energy
efficient lighting upgrades across 43 New Zealand branches,
replacing 2,400 lights and fittings with efficient LED technologies.
The upgrades are expected to reduce our carbon footprint by
almost 40 tonnes per year — this is the equivalent to removing
almost 10 cars off the road for one year.
1.
This target was submitted to the Science Based Targets Initiative (SBTI) for informal review, and SBTI provided written confirmation that it may be considered and
communicated as science-based.
43
CLIMATE CHANGEENVIRONMENTAL SUSTAINABILITY
RENEWABLE ENERGY
Target
Increase renewable energy use in our Australian
operations by 13% by 2020 (against a 2017 baseline).
Performance
We have entered into a Power Purchase Agreement
to ‘off-take’ power from a wind farm under development
in Murra Warra (Victoria), due for completion in 2019.
Relevant United Nations Sustainable Development Goals
7.3 By 2030, double the global rate of
improvement in energy efficiency.
13.3 Improve education, awareness-raising
and human and institutional capacity on climate
change mitigation, adaptation, impact reduction
and early warning.
In December 2017, we announced our participation in a Telstra-led
collective to execute a renewable energy power purchase agreement
(PPA) for the Murra Warra Wind Farm, located near Horsham in
north-west Victoria. Coca-Cola Amatil and the University of
Melbourne have also joined this collective. The multi-year deal
with the wind farm developers underpins construction of the
first phase of the wind farm and helps to shield us from rising
power prices due to long-term pricing guarantees that are well
below current wholesale prices. We will retire the renewable
energy certificates (LGCs) we receive from the project to ensure
we retain the environmental benefit from the project and can
deliver against our environmental sustainability targets.
The project is expected to deliver an array of co-benefits during both
the construction and operations phases, including those below.
PAPER
Target
Reduce paper consumption in Australia and
New Zealand (office and customer paper use only)
by 40% by 2020 (against 2015 baseline).
Performance
Paper consumption has decreased by 37%, tracking
ahead of the required reduction to meet our target.
Relevant United Nations Sustainable Development Goals
12.5 By 2030, substantially reduce waste
generation through prevention, reduction,
recycling and reuse.
Customer preference to receive electronic statements and
communications, an increased level of digitisation across the
Group and employee awareness programs on printing behaviours,
continue to drive the reduction in paper consumption.
Increased utilisation of digital print technologies, combined with
the adoption of online tools, has reduced New Zealand paper
envelope usage by 19 tonnes.
220,000
average households’
power use every year
cars off the road
every year
tonnes of greenhouse gas
reduced very year
320,000900,000
THE ENERGY FROM MURRA WARRA WIND FARM 1 WILL EQUATE TO...
oror
44
ANZ 2018 SUSTAINABILITY REVIEW
RECYCLING
Target
Increase recycling rates in our Australian commercial offices
(>20,000m
2
) by 12% by 2020 (against a 2017 baseline).
Performance
Recycling rate is not progressing as expected and
has decreased by 1% since 2017.
Relevant United Nations Sustainable Development Goals
12.5 By 2030, substantially reduce waste
generation through prevention, reduction,
recycling and reuse.
At the time of establishing a 2016/2017 waste and recycling
baseline, our average recycling rate across target sites was
estimated at around 43%. Our aspiration to increase recycling
rates by 12% was designed to lift recycling performance to
approximately 55% — the unofficial industry benchmark for
office-service-based corporates.
Since then we have matured our approach to collecting and
analysing data resulting in a more insightful, comprehensive
and accurate waste footprint. This improved approach to data
collection and reporting has indicated our baseline recycling
rate was much better than originally estimated, being 67%.
While this is a more positive environmental position, there
still remain three areas of opportunity to focus our efforts
and lift our future recycling performance.
SITE RELOCATION
Waste generated during the relocation of employees as
part of the consolidation of our property portfolio is a major
contributing factor to the current negative target trend.
To mitigate the impact of poor waste separation we have
implemented a ‘triple R’ approach to reduce, redistribute and
recycle waste streams, particularly those that are normally less
prevalent such as stationery, furniture and electronics. Relocation
activities will continue into mid-2019 as will our ‘triple R’ efforts.
INFRASTRUCTURE IMPROVEMENT
As our waste baseline and measurement has become
more sophisticated during the reporting period, so too has
our awareness of areas where we could include new, or improve
existing, waste separation and recycling infrastructure. Waste
signage has been updated across a number of our sites and waste
and recycling infrastructure is being designed for our Melbourne
head office and ‘campus’ sites incorporating human-centred
design considerations to boost recycling performance.
EMPLOYEE EDUCATION
During 2018 we commenced a ‘Green Ambassador’ employee
engagement program, empowering our people to mitigate
their environmental footprint, connect with nature and create
environmental solutions and opportunities. In response to
employee survey insights, the Green Ambassador focus has
been primarily on waste avoidance and recycling including:
-promotion of World Environment Day’s #BeatPlasticPollution
campaign throughout May, June and again for ‘Plastic Free July’
resulting in almost 1,200 employees pledging to avoid the
top four single-use plastics (cups, bags, bottles, straws);
-expansion of our #KickTheCup campaign to our Service
Centres in Chengdu, Manila and Bengaluru and ANZ Singapore,
encouraging employees to replace disposable cups with
reusable coffee cups;
-implementation of a ‘Borrow Bag’ scheme in our Australian
commercial buildings encouraging employees to borrow
reusable bags for trips to the shops; and
-promotion of World Clean-Up Day, encouraging employees
to volunteer to pick up rubbish from local landscapes and
waterways. In Singapore alone, an estimated 640 volunteer
hours were used during 2018 for this purpose.
WATER
Target
Reduce water consumption in our Australian commercial
offices (>10,000m
2
) by 15% by 2020 (against a 2015 baseline).
Performance
Water consumption is progressing slower than expected
with a reduction of approximately 4% since July 2015.
Relevant United Nations Sustainable Development Goals
12.5 By 2030, substantially reduce waste
generation through prevention, reduction,
recycling and reuse.
We have invested in a detailed audit of our water consumption
to be undertaken at our largest consuming commercial
sites in Australia. The results will inform the development
of an operational water strategy as well as the advancement
of site-specific sustainability master plans.
We continue to implement water savings equipment as part
of our standard approach to new and refurbished branch activities
to ensure these sites operate as efficiently as possible.
45
ENVIRONMENTAL SUSTAINABILITY
HOUSING
We are committed to improving the
availability of suitable and affordable
housing options for all Australians and
New Zealanders, including the supply
of homes to buy, homes to rent, and
access to safe accommodation.
Australia and New Zealand currently have among the highest
levels of home ownership in the world, while simultaneously being
ranked in the top 10 for the highest levels of unaffordability — for
both purchase and rental. The availability of suitable and affordable
housing is an issue of great concern to many Australians and
New Zealanders.
Housing-related lending is a central activity of a bank. We lend
to home owners and investors, and for property development and
infrastructure. We believe we can play a broader role in improving
the availability and affordability of housing, including support for
innovative housing delivery models across the private, public and
not-for-profit sectors.
POLICY ENVIRONMENT
Factors such as planning regimes, regulation, taxation laws,
infrastructure supply and population growth all affect the range
and availability of housing options available. Experts acknowledge
there is a supply gap between the number of houses built and
current and projected demand.
Australian governments have been targeting policies that support
first home buyers into the market and growth in the affordable
housing market. With respect to the latter, mechanisms to drive
private investment and expand the community housing sector
have included the introduction of the National Housing Finance
and Investment Corporation.
The New Zealand Government has committed to a suite of
housing policies targeted at delivering new supply to the market.
This has seen changes such as establishing programs to hold and
grow their public housing portfolio and the introduction of a new
program, Kiwi Build, targeting a suite of products to support first
home buyers into home ownership. The government has set an
overall supply target of 100,000 affordable new homes into the
market over 10 years with 50% of them to be built in Auckland.
OUR APPROACH
Housing, one of the key priorities in our refreshed Sustainability
Framework, is a relatively new focus area for us. Over the past
12 months we have been exploring different models for
supporting the range and availability of affordable and
appropriate housing.
We have now set three new public targets focused on home
ownership, housing choice (including long-term rentals) and
housing security across Australia and New Zealand. To achieve
these targets we will need to work closely with our customers,
supporting innovative models that can be replicated, scaled-up
and delivered to market.
INCREASING HOUSING SUPPLY
We have a target to fund and facilitate $1 billion of investment in
Australia by 2023 to deliver around 3,200 more affordable, secure
and sustainable homes to buy and rent. Specifically this means:
-more affordable housing, including homes priced at a discount
to market for people otherwise unable to secure stable
accommodation (purchase or rental);
-improved housing security, providing long-term rental stability
and new pathways to ownership (see case study on page 47); and
-sustainable homes that are designed to improve environmental
outcomes and reduce living costs (eg. energy efficiency features
which lead to reduced power bills).
Through the establishment of the ANZ Housing Fund we will
be able to accommodate non-conforming risk aspects of new
housing models in an economically viable manner — allowing
us to back initiatives we may not previously have funded.
When new and emerging housing models are being proposed
the risk is generally increased for the developer, the bank and
the consumer. This is equally true when governments bring new
projects and programs to the table. Uncertainty is higher due
to potential policy and regulatory changes as well as unproven
delivery models — issues which often prevent deals from
happening. For these reasons, our expertise in understanding and
managing risk will be a core part of how we manage the Fund.
Efforts to ‘close the gap’ between what it costs to deliver
a property and what a consumer can afford to pay do not
always lead to better outcomes. We will be mindful not to back
projects that could lead to poor social and economic outcomes.
The governance approach we are establishing will inform how
we select clients and assess project objectives and outcomes
so as to meet our goals.
46
ANZ 2018 SUSTAINABILITY REVIEW
ASSEMBLE AND MAKE VENTURES
Housing affordability is a challenge faced by many people in
Australia and New Zealand, particularly younger people and
those on lower incomes.
Assemble, a residential developer, has created the Assemble
Model — a new ‘build-to-rent’ hybrid model that bridges the gap
between renting and owning your home. It offers residents the
security and stability of a five-year lease with the opportunity
(but not the obligation) to purchase their home at the end of
the lease. The purchase price is fixed from the start of the lease,
giving residents a set goal to save towards and mitigating the risk
of being priced out of the market during the rental period. It also
protects against rental insecurity, with the rent set at a market rate
and agreed up front, enabling residents to have the ability to plan
ahead while they save and settle into the local community.
According to Kris Daff, Managing Director, Assemble and
MAKE Ventures, “The model aims to address the fundamental
desire for the majority of Australians to own their own home
— and is a direct response to multi-level government policies
on housing affordability.”
We are financing the development and have worked with
Assemble to refine their model providing advice on funding
options, valuation methodology and risk management. Our
Retail business has assisted Assemble to understand consumer
purchasing profiles, retail mortgage lending parameters and
appropriate strategies to support potential purchasers to save
for their deposit prior to the end of the lease.
“We now have over 2,500 aspiring homebuyers interested
in participating in Assemble’s home ownership pathway and,
with ANZ’s support, we have a pipeline of future projects
to cater for this growing customer base,” said Kris.
Left to right — Caryn Kakas, Senior Manager, Group Strategy, ANZ — Kris Daff, Managing Director,
Assemble and MAKE Ventures.
CASE STUDY
HOUSING
HOUSING
47
EXPANDING THE AVAILABILITY OF
FINANCIAL COACHING SUPPORT
TO FIRST HOME BUYERS IN
AUSTRALIA AND NEW ZEALAND
One of our strategic business priorities is to be the best bank
for people who want to buy and own a home. Our First Home
Coaches are focused on the needs of first home buyers, providing
them with the support and tools to help them purchase their
first property.
Our research shows that 64% of first home buyers are uncertain of
what to do when it comes to buying their first property and they
want someone they can trust to guide them through the process.
1
We have already trained around 2,800 frontline branch, mobile
lending and contact centre employees to be First Home Coaches
and in the coming year will continue to roll out training across our
Australian and New Zealand employees.
IMPROVING THE ENVIRONMENTAL
SUSTAINABILITY OF HOMES
We have set a target to provide NZ$100 million of interest-free
loans to insulate homes for ANZ mortgage holders in New
Zealand. As discussed in the case study below, cold and damp
homes in New Zealand increase the incidence of preventable
diseases, particularly affecting the young and old.
1.
ANZ Home Buying Research, Prescience, May 2015.
INITIATIVES TO SUPPORT FIRST
HOME SAVERS AND BUYERS
First Home Coach — provide guidance and support to first
home buyers and are available via branches, mobile lending
and phone.
First Home Savers Coach — support potential home buyers
to establish a savings plan, including home deposit plans,
developed with our customers during branch visits.
Dedicated website — comprehensive information on
anz.com/firsthome to educate first home buyers using tools
including deposit and savings calculators, tips and information
on planning, finding, buying and settling on a home.
First Home Buyer Seminars — offered to customers and
our employees via local branch network.
Conveyancing Offer — conveyancing fees reimbursed
up to $1,000 for eligible first home buyers.
First Home Buyer Handbook — a free guidebook for
customers to help them to navigate the home buying journey.
Property Profile Report — helps to determine the potential
price of a property. The service is free and available to order
via all channels (eg online, branch, mobile lender and via
accredited brokers).
48
ANZ 2018 SUSTAINABILITY REVIEW
WARMER HOMES
Uninsulated homes are a major problem in New Zealand
causing negative health impacts for many families. National
health statistics show that 20 New Zealand children die
each year, with another 30,000 hospitalised, because of
conditions caused by poor quality housing. The number
of New Zealand children diagnosed with bronchiectasis,
a potentially fatal disease associated with repeated chest
infections in early childhood, doubled between 2000
a n d 2015.
“As New Zealand’s biggest home lender, housing is one
area where we want to make a difference” said Antonia
Watson, Managing Director Retail and Business Banking,
New Zealand.
With this in mind we have set aside NZ$100 million so
our customers can enjoy warmer, healthier homes while
potentially also keeping energy costs down.
Our interest-free mortgage top-up (up to NZ$5,000) is
designed to help both owner-occupiers and investors.
Kylee and Craig, a young couple expecting their first child,
have benefitted from the initiative. “I didn’t think it was
possible that we could have insulation and a brand new
home” said Craig.
We recognise that insulation will not automatically lead
to lower energy bills, but it has been shown that warmer
homes lead to improved health outcomes.
“Studies indicate that every dollar spent on insulation
delivers NZ$4 of health benefits from fewer hospital visits
and medicine costs” said Antonia.
More than 550 insulation loans have been approved
as at 30 September 2018.
CASE STUDY
FINANCIAL WELLBEING
International experts are increasingly
applying a common definition of financial
wellbeing as a set of outcomes that include
the capacity for someone to meet current
commitments, have sufficient spare money
for a comfortable life, and possess the
resilience to maintain these elements
into the future.
It is widely accepted that financial wellbeing contributes
significantly to overall health and wellbeing, community
connectedness and economic and social participation.
IMPROVING THE FINANCIAL
WELLBEING OF OUR CUSTOMERS,
COMMUNITIES AND EMPLOYEES
The Royal Commission in Australia has raised serious questions
about conduct, practices, and the extent to which we are ‘doing
right’ by our customers and the community more broadly.
Together with insights from our financial wellbeing research, this
is informing a range of initiatives to build the financial wellbeing
of customers, communities and our own employees. Our industry
has a role to play in fostering the greatest possible financial wellbeing
of everyone in our community. We already reach millions of people
with our products and services. We have a unique opportunity to
support people more effectively to develop their money skills and
confidence, particularly through everyday conversations with our
customers. We also have a responsibility to apply our marketing
influence in a responsible way, to raise awareness of how to improve
financial wellbeing and build resilience for the future.
Our commitment to financial wellbeing is not new. Over many years
we have invested in community programs including Saver Plus
and MoneyMinded, which have proven to be an important part
of the financial inclusion story for lower-income Australians. These
programs have helped to build financial skills and resilience, develop
active saving habits and improve overall financial wellbeing.
We have surveyed our own employees in Australia and New Zealand
to inform a range of initiatives to reinforce positive behaviours and to
enable our employees to build their financial wellbeing, particularly
those who might be ‘struggling’ or ‘just getting by’. Employees with
high levels of financial wellbeing, confidence and resilience will in
turn be better able to support our customers to achieve the same.
We have not always had the necessary focus on supporting our
customers through all life stages and realising the business benefits
of engaging deeply with them to build their financial wellbeing
over the longer term.
Part of our new focus on financial wellbeing has required us to
break down traditional banking product silos, and consider the
value for customers and the quality of their overall experience.
Rather than thinking just about individual products (eg. a mortgage
or deposit product) our attention is increasingly on the broader
needs of customers who may be seeking to save and invest for
home ownership or various other goals.
Our research has clearly identified key behaviours of active saving
and not borrowing for everyday expenses. We have access to a
significant amount of customer data that can inform a clear picture
of financial behaviour. This helps to identify where we might
support those positive behaviours proven to lead to improved
financial wellbeing.
For many people, saving can be analogous to other things in life
which are deemed ‘good for us’ — like health, weight loss and safety.
We have learned from the experience of public campaigns in these
areas that, despite their importance, it can be a struggle to engage
with behaviour that might be considered boring and not consistent
with a fun and enjoyable life.
We conducted a study using academic research, our own customer
data, and a human-centred design approach to better understand
the behaviours of active savers and extreme spenders.
One of the most effective ways we have found to help customers
increase their savings behaviour is by engaging them in setting and
achieving life goals. Travelling, buying a home or creating future
opportunities for our children are all significant life goals that can
be very motivating.
We have introduced a savings coach model in our Australian
branches, where bankers can guide customers through a review
of what they spend, how they spend it, and offer means by which
they might curtail discretionary spend and more actively save for
a goal, such as a home deposit.
Using technology to develop ’nudges’ and notifications that
encourage savings behaviour and repayment of debt when
the opportunity arises are also effective tools.
By having a savings buffer, the need to turn to credit for everyday
expenses (like groceries) when something unexpected comes up
is much reduced. Credit card products are best used as a utility and
a convenience, not as a necessity for everyday expenses.
49
FINANCIAL WELLBEING
The behaviour of most credit card customers reflects this, but
we know that some can face difficulties when using credit for
the first time, or when faced with a persistent cycle of revolving
credit. We have developed targeted campaigns to educate,
empower and (where helpful) to ‘course-correct’ customers
who might be exhibiting negative behaviours through their
transaction data. We have also set a target to communicate
with more than 700,000 of our Australian retail and commercial
customers by end 2019 to help them get more value from our
products and services and establish positive financial behaviours,
such as improved savings habits.
FINANCIAL WELLBEING IN A
DISABILITY SERVICES CONTEXT
In late 2017 we conducted research with RMIT University into
the role of financial education in a disability services context.
The introduction of the National Disability Insurance Scheme Act
(NDIS) in Australia in 2013 has created opportunities for people with
disability and their carers to exercise greater choice and control over
the type of support they receive. Our community partners have
highlighted that with this opportunity comes a need for adequate
knowledge and skills to manage the individualised funding support
received through the NDIS. Insights from the research and expertise
from community partners such as Brotherhood of St Laurence
and The Benevolent Society will inform how we can contribute
to building the capacity of NDIS clients and their carers.
FINANCIAL WELLBEING SURVEY — BEHAVIOUR IS KEY
Our first Adult Financial Wellbeing Survey was published this year
reflecting leading international views about the determinants of
financial wellbeing. In Australia, this survey is the sixth in a series
which has explored financial literacy, attitudes and behaviours
since 2002. For the first time we also conducted this research
in New Zealand, building on a significant body of research led
by the Commission for Financial Capability since 2006.
The average financial wellbeing score for adult Australians and
New Zealanders was found to be 59 (out of 100), which indicates
a fair level of financial wellbeing, but presents significant room
for improvement.
For the first time in Australia and New Zealand, our survey
identified and measured the key behaviours that drive
financial wellbeing — active saving and not borrowing
for everyday expenses.
The study showed that these two behaviours contributed 19%
and 16% respectively in Australia (18% for both in New Zealand)
to explaining differences in people’s overall level of financial
wellbeing. The data showed that at every income level, we need
more active saving — having less than $1,000 in savings and
investments was strongly associated with low levels of
financial wellbeing.
The findings suggest if financial wellbeing in Australia and New
Zealand is to improve, the focus needs to be on how people
actually use their money, not just how they manage it, since
neither planning nor monitoring one’s finances seemed to
promote better financial wellbeing.
Promotion of active saving and the avoidance of borrowing for
everyday expenses will mean tackling issues around personality
rather than just knowledge. This calls for a wider range of
financial capability interventions that enable behaviour change.
After behaviours, socio-economic circumstances played an
important role in determining financial wellbeing. The survey
showed the relationship between socio-economic characteristics
and financial wellbeing is complex. It drew attention to the fact
that financial wellbeing is, in part, a ‘state of mind’ based on
people’s feelings and expectations about their current and future
financial situation, and as a result is not based solely on their
income or wealth. While income was found to be an important
influence, the survey showed that people could have relatively
high levels of financial wellbeing without necessarily having
a particularly high income.
The survey reports and supporting materials are available
on bluenotes.anz.com/financialwellbeing.
HIGHLIGHT
50
ANZ 2018 SUSTAINABILITY REVIEW
PROGRESS TOWARDS OUR
FINANCIAL WELLBEING TARGET
Target
Help enable social and economic participation of 1 million
people by 2020 through our initiatives to support financial
wellbeing, including our financial inclusion, employment
and community programs, and targeted banking products
and services for small business and retail customers.
Performance
More than 889,000
2
people have been reached through our
financial wellbeing programs, and targeted banking products
and services for small business and retail customers.
Relevant United Nations Sustainable Development Goals
3
1.4 By 2030, ensure that all men and women, in
particular the poor and the vulnerable, have equal
rights to economic resources, as well as access to
basic services and financial services.
8.3 Promote development-oriented policies that
support productive activities and encourage the
formalisation and growth of micro, small- and
medium-sized enterprises, including through
access to financial services.
10.2 By 2030, empower and promote the social,
economic and political inclusion of all.
17.16 Enhance the global partnership and
multi-stakeholder partnerships, to support the
achievement of the sustainable development
goals in all countries.
We have expanded the definition of our Financial Wellbeing target
to capture the broad range of programs we have in place to enable
social and economic participation. As at 30 September 2018:
-over 581,180 people were estimated to have participated in
MoneyMinded across Australia, New Zealand, Asia and the Pacific
(since the program commenced in 2002);
-Saver Plus had reached over 40,250 lower-income participants
(since the program commenced in 2003);
-we have recruited 510 people from under-represented groups
(since the target commenced in 2016);
-more than 1,680 people have been assisted through our
mentoring programs, including those supporting start-ups and
entrepreneurs, as well as our Seeds of Renewal grants program; and
-more than 265,350 people have been assisted through our
products and services targeted towards small businesses and
retail customers, including our roll-out of goMoney™ mobile
phone banking in the Pacific.
1.
Productivity Commission, 2017.
2.
Refer page 88 for explanatory notes.
3.
We have abbreviated the SDG ‘targets’ to highlight the most relevant contribution by ANZ (see https://www.un.org/sustainabledevelopment/sustainable-development-goals/
for full targets).
FINANCIAL WELLBEING
AND AUTISM
We supported Autism CRC and RMIT University
in a companion study looking specifically into the
issues facing autistic individuals. This focus arose from
a recognition of the need for better understanding of
the particular financial needs of these individuals and
their carers, who account for around 29% of current
NDIS scheme participants.
1
Autism affects over 1% of the population. Despite extensive
developments in treatment improving wellbeing for autistic
individuals, lower education and employment rates often
lead to reduced social and economic participation.
Our research looked into 1) the financial behaviours,
attitudes and experiences of autistic individuals and
their carers, and 2) how financial education and financial
institutions can support the strengths and abilities of
these individuals to promote financial wellbeing.
Those participating in the research expressed a strong
desire to learn more about money viewing it as important
for achieving or maintaining their independence.
Importantly, the study showed that autistic individuals
possess strengths that are advantageous to managing
money. With appropriate supports, these strengths can
be capitalised on.
One participant said, “I’ve really learned to optimise my
autism to help with my finances. I’ve figured that, okay,
I get fixated on things. Let’s kind of ‘weaponise’ that, and
use my fixation and my obsession with numbers and
tracking detail and stuff to manage money.”
The full report can be found on anz.com/moneyminded.
The research complements our existing partnership with
DXC technology, which supports autistic individuals to
gain entry to the workplace. The three-year program
selects talented individuals to work in cyber security and
technology testing roles, supporting them with training
and career development.
CASE STUDY
51
FINANCIAL WELLBEING
MONEYMINDED
MoneyMinded is our flagship financial education program,
supporting adults with low levels of financial literacy and
those on lower incomes across 21 markets, including Australia
and New Zealand. The program is delivered by community
partner organisations in Australia and New Zealand, and a mix
of community organisations and our employees in Asia and
the Pacific. Of the estimated 84,284 people who participated
in MoneyMinded (including MoneyBusiness) in 2018, many
of them were women (68% in Australia and 57% in Asia Pacific/
New Zealand).
Our support of the financial counselling sector in Australia
includes the offer of MoneyMinded and MoneyBusiness training
for financial counsellors in all states and territories, with a large
number taking up the opportunity each year. Financial counsellors
typically utilise elements of MoneyMinded in casework with clients
in acute financial hardship, or refer clients to community sessions
delivered by trained money workers.
The flexibility of MoneyMinded enables a large network of
accredited facilitators to use the program to meet the specific
needs of their clients. Over many years, the program has been
successful in supporting people engaged with family, mental
health, youth, migrant, disability, drug and alcohol and other
important community services.
RESEARCH DEMONSTRATING THE VALUE
OF MONEYMINDED IN THE PACIFIC
In keeping with our commitment to build a robust evidence base
for our financial wellbeing programs in the community, in 2018
we published the first MoneyMinded in the Pacific impact report,
consolidating our findings on delivery of MoneyMinded in Fiji,
Samoa, Tonga and Vanuatu. This first sub-regional report provided
a consolidated view of the impact of MoneyMinded across different
countries, comparing and contrasting the experience and behaviours
of participants to tailor MoneyMinded to suit local needs.
Results from the survey, conducted by the University of the South
Pacific, revealed that most respondents acquired useful and relevant
financial knowledge and skills for their daily money management,
and were more positive about managing money after completing
MoneyMinded. They demonstrated a greater future orientation that
involved setting financial goals, budgeting, saving and investing. In
addition, MoneyMinded had a positive impact on the respondents’
outlook on life, as well as that of their families and friends.
SUPPORTING ECONOMIC
GROWTH IN THE PACIFIC
ANZ’s goMoney™ has the capacity to transform lives in rural
communities providing customers access to deposits, withdrawals
and person-to-person transfers through merchants, many of whom
are existing shopkeepers. Customers are able to check account
balances and transaction history at the touch of a button and are
supported with financial literacy training to build skills and financial
wellbeing. Prior to the introduction of goMoney™ in the Pacific,
many customers had to travel to access branches or ATMs, in some
cases very long distances from rural areas. Others had no choice but
to remain ‘unbanked’.
A total of 192,811 Pacific customers were registered to use
goMoney™ at the end of September 2018, 111,914 of these being
new ANZ customers. Uptake of goMoney™ in Papua New Guinea
has been much lower than expected due to challenges associated
with the engagement of third-party sales contractors and the pilot
we ran in 2017 did not progress into business as usual. It has also
been lower than expected in Vanuatu due to a delayed project
we were anticipating would start earlier in 2018.
MONEYMINDED
NEW ZEALAND
Gail, a MoneyMinded facilitator in New Zealand with The
Solomon Group, teaches MoneyMinded as part of a 14 week
program helping women prepare for work when they are
released from Auckland Regional Women’s Correctional
Facility. The program covers budgeting, saving and spending,
managing credit and debt, as well as planning for the future.
Gail works with participants to create a realistic and accurate
budget on NZ$350 a fortnight, the amount they receive
as part of their release plan.
Topics of most interest to the women include co-borrowing,
guarantors, different types of bank accounts (some women
may not have used bank accounts for personal reasons or
because they do not have adequate identification) and
choosing appropriate banking products.
“One of the challenges for the girls is to create a new mindset
for their future. This, in part, is recognising that receiving a
wage is their new reality — a wage that initially will be less
than they made before [prison] but a wage that will enable
them to live freely with hope,” said Gail.
CASE STUDY
52
ANZ 2018 SUSTAINABILITY REVIEW
SAVER PLUS — PATHWAYS
TO WELLBEING
Over many years, evaluation of Saver Plus has shown that the
program utilises the combined power of goals, incentives and
personal support to support lower-income people to build savings
behaviour. Developed by Brotherhood of St Laurence and ANZ in
2003, program participants open an ANZ savings account, set a
savings goal and save towards it regularly over 10 months while
also attending MoneyMinded financial education sessions.
Upon reaching their goal, savings are matched by ANZ dollar
for dollar, up to $500, which must be spent on education.
For the first time, RMIT University’s program research, published
in 2018, applied the measures of financial wellbeing utilised in
our Australian and New Zealand surveys.
The average financial wellbeing score before doing Saver Plus
was 36 (out of 100) and after Saver Plus the average score
increased to 64 (Australian Average was 59).
Importantly, the research also demonstrated that 87% of survey
respondents continued to save the same amount or more,
between 3 to 7 years after completing the program.
After participating in Saver Plus:
-78% of survey respondents were better able to make ends meet;
-73% of survey respondents were better able to provide for their
families; and
-80% of survey respondents reported that Saver Plus helped them
gain more control over their finances.
PERSONAL WELLBEING
OUTCOMES OF SAVER PLUS
Saver Plus also facilitated a range of important outcomes for
participants that were associated with participation but were not
primary objectives of the program:
-88% of survey respondents agreed or strongly agreed that
achieving their Saver Plus goal helped them to feel better
about themselves;
-69% of survey respondents felt less stressed about the future;
-83% of survey respondents reported that the product they
purchased using their matched savings on successful completion
of Saver Plus had a positive effect on their own or their children’s
education experience; and
-survey respondents reported significant increases in life, financial
and employment satisfaction after completing the program.
In 2018, 4,024 participants enrolled in Saver Plus, setting goals to
save over $2 million collectively. Since 2003, Saver Plus has reached
over 40,000 lower-income participants and is expected to enable
over $33 million of private sector funds to be invested in education
by 2020.
1
The program is delivered in partnership with community
organisations and the Australian Government.
1.
Saver Plus Report 2016: anz.com/resources/3/4/344f9439-8927-45f0-9b70-fdbaa5a6e6fb/2016-saver-plus-access-report.pdf.
MONEYMINDED FIJI — LIVE AND LEARN
In the rural and remote Drawa Block communities in central
Vanua Levu, Fiji, financial literacy is a relatively new concept.
Through our partnership with Live and Learn Fiji, 30 women
and 31 men from five villages in the Drawa Block communities
have participated in our MoneyMinded program.
Ms Doris Susau, Country Manager, Live and Learn said,
“The training has created awareness of the importance
of opening a bank account, understanding of the necessary
assertiveness in saying no to unplanned expenditure, fostered
skills in developing short-term and long-term goals, and
learning how to budget.”
The program was contextualised for the Drawa Block
communities to provide practical examples aimed at building
financial skills, knowledge and confidence.
Joti, a participant from Vatuvonu village said, “I have a farm and
have often given discounted prices on my product, because I am
selling to people I know. After the ANZ training, I started selling
at the market price in Labasa, because I want to buy a house.”
Joti has since opened a bank account and has made a cash
purchase of his house in Labasa.
More than 9,000 Fijians have participated in our MoneyMinded
program since 2011.
CASE STUDY
53
FINANCIAL WELLBEING
SAVER PLUS — NIGEL’S STORY
Nigel, pictured with his daughter Molly, first heard about the
Saver Plus program from Molly’s primary school.
“I originally joined the program for the dollar for dollar matching
to help purchase a new computer for Molly” explains Nigel.
“The matched savings came in handy, but what I learnt from the
program was more valuable in the long run.”
“The program has taught me that with commitment and
consistency we can make saving possible. I put aside $50 each
month with my daughter, even though it was difficult at times.”
Nigel credits Saver Plus with inspiring his daughter to save.
Of particular value to Nigel was the MoneyMinded online modules
he completed as part of the program, often alongside Molly.
“My daughter took an interest in the bank statements and we
talked about what we would do with the extra funds coming in.
We talked about a compound interest managed share fund,
and this is now what we are doing with the savings. She could see
how much the funds would achieve over many years
of compound interest.”
To learn more visit anz.com/saverplus.
54
ANZ 2018 ANNUAL REVIEW
CASE STUDY
FINANCIAL
WELLBEING
WORKPLACE PARTICIPATION
AND DIVERSITY
We are building an engaged, diverse and
inclusive workforce, ensuring we have the
right people to meet external challenges
and achieve our business strategy.
We are building a workplace that reflects the communities in
which we operate and is inclusive of all dimensions of diversity
including age, caring responsibilities, cultural identity, disability,
gender, gender expression and identity, ethnicity, education,
family and relationship status, sexual orientation, religious beliefs,
and socio-economic background. Diversity also encompasses
the many ways people differ in terms of their education, life
experience, geographic location, personality, ways of thinking
and work experience. Leveraging the full diversity of our workforce
gives us a strategic advantage and creates commercial, social
and economic value.
A summary of our policy position on diversity and inclusion
can be found on anz.com/corporategovernance.
We are the Principal Business Partner of Chief Executive Women,
a founding member of the Diversity Council of Australia, an
‘Employer of Choice’ for Gender Equality (Australia) and a signatory
to the United Nations Women’s Empowerment Principles.
Involvement in these initiatives provides a solid foundation that
supports our focus on gender equality and ensures we are aligned
with best practice policies and programs.
Target
Maintaining an organisation inclusiveness score
of at least 93% in 2018.
Performance
Organisation inclusiveness is steady at 93%.
ACHIEVING GENDER
BALANCE IN OUR BUSINESS
Target
Increase the representation of Women in Leadership
by 3% to 34.1% by 2020.
Performance
Group-wide representation of Women in Leadership has
increased to 32% (up from 31.1% as at September 2017).
Relevant United Nations Sustainable Development Goals
5.5 Ensure women’s full and effective participation
and equal opportunities for leadership at all levels
of decision-making in political, economic and
public life.
We have reframed our measurement of female inclusion from
Women in Management to Women in Leadership (which includes
Senior Managers, Executives and Senior Executives, not Managers).
This is focusing our effort on improving gender equity at the most
senior and influential levels of the organisation.
Progress against our target is reviewed monthly by the CEO
and the Group Executive Committee, with results informing
the Group’s bonus pool and performance outcomes.
We have four women on our Group Executive Committee: the
Chief Financial Officer; the Group Executive Talent and Culture;
the Group Executive Digital Banking; and the Deputy Chief
Executive Officer and Group Executive Wealth Australia.
Our Board has 33.3% female representation.
A FOCUS ON GENDER PAY EQUITY
We have voluntarily reported on our gender pay gap for several
years. To ensure our disclosures are transparent, meaningful and
focused on the areas of most relevance, this year we reviewed how
we calculate, measure and report on our gender pay gap. We are
now using the two different methodologies outlined below:
1. the ‘category average’ methodology which calculates
average salary gaps between women and men by category
— which can uncover issues such as women’s access
to senior and high-paying roles in an organisation; and
2. the ‘like-for-like’ methodology, which compares the pay
of women and men in the same or similar roles — which
can highlight bias in pay decisions.
This two-pronged approach allows us to better understand
and explain the root causes of our gender pay gap.
55
FINANCIAL WELLBEING
1.
Australia-only data. Effective date 17 August.‘Senior Executives’ is Group 1, ‘Executives’ is Group 2, ‘Senior Managers’ is Group 3, ‘Managers’ is Group 4, and ‘Non-Managers’ is Groups 5
and 6. Excludes Executive Committee, casuals, fixed-term employees, and trainees/interns.
56
ANZ 2018 SUSTAINABILITY REVIEW
PAY GAP (AUSTRALIA)
1
Ratio of female to male
Level
Av. salary —
by category (%)
Like-for-like
roles (%)
Senior Executives 97.3101.0
Executives 97.498.5
Senior Managers96.397.8
Managers92.498.5
Non-Managers93.1101.4
The primary drivers of our gender pay gap are the level of
representation of women in leadership roles, and job functions
that attract a premium salary. To a much lesser extent, remuneration
decisions (both on commencement in role and during the
remuneration review) also adversely contribute.
For example, when we review our non-manager category, the
average salary of women is 101.4% that of men on a like-for-like basis,
whereas on a category basis it is 93.1%. This indicates the root cause
of the pay gap at this level is the lack of women in higher paying
roles (within the category), not bias in pay decisions.
We are focused on initiatives to close the gender pay gap including
removing systemic bias from our processes, such as our performance
and remuneration review, and enhanced support for line managers
to make fair and equitable remuneration decisions. This includes
specific guidance during the performance and remuneration review
for line managers of employees who are absent on, or recently
returned from, parental leave, to ensure these employees are not
inadvertently disadvantaged.
PROMOTING FLEXIBLE WORKING
Providing our employees with the opportunity to work flexibly
supports their career and life goals, and is correlated with increased
levels of employee engagement as well as performance. 99.6%
of our employees are now eligible to request flexible working
via a formal policy. Our flexibility policies provide a framework
for employees to initiate a conversation with their line manager
about how flexibility might work for their role.
Flexible working at ANZ includes flexible work locations, job share,
informal ad hoc arrangements, part-time work, flexible hours, flexible
start and finish times, compressed work week, career breaks and/or
lifestyle leave (up to four weeks of additional unpaid annual leave).
Flexible working is becoming critical to attract and retain talent.
By ensuring we have policies to support flexible working,
candidates, employees, and their line managers feel more
inclined to explore all possible options.
PARTICIPATION OF UNDER-REPRESENTED
GROUPS IN OUR WORKFORCE
Target
recruiting >1,000 people from under-represented groups
including Aboriginal and Torres Strait Islanders, people
with disability and refugees by 2020.
Performance
Since 2016, we have recruited 510 people from
under-represented groups.
Relevant United Nations Sustainable Development Goals
8.5 By 2030, achieve full and productive
employment and decent work for all women and
men, including for young people and persons with
disabilities, and equal pay for work of equal value.
10.2 By 2030, empower and promote the social,
economic and political inclusion of all, irrespective
of age, sex, disability, race, ethnicity, origin, religion
or economic or other status.
We are making good progress against our overall target. In 2018
we recruited:
-100 Aboriginal and Torres Strait Islanders against our Reconciliation
Action Plan target of 100;
-131 people with disability through our abilities hiring program; and
-29 refugees through our Given the Chance program.
Promoting the participation of under-represented groups in our
workforce contributes to our goal of creating a diverse and inclusive
workforce and is aligned with our purpose.
We provide employment opportunities to people who may
otherwise find it difficult to secure employment, helping to facilitate
their social and economic participation.
We welcome and include employees from other diverse groups
and ensure that we measure our progress in other areas of
diversity and inclusion accordingly. For example, we:
-consider the gender and geographical representation
of employees on succession plans to ensure diverse
representation; and
-regularly monitor the representation and engagement of
our workforce including by age, cultural/ethnic background,
disability, gender, sexual orientation and use of flexible
working arrangements.
SUPPORTING WORKING PARENTS
From July this year ANZ New Zealand increased paid parental leave
to 26 weeks from the 18 weeks currently available, two years ahead
of the New Zealand Government’s legislated change to 26 weeks
by 2020.
“It’s great news” said Angela Jia, ANZ Private Banker. “We were
thinking that my husband would have to put his studies on
hold while I was on leave but this means he can keep up with
his studies.”
We have a suite of market-leading parental leave policies and
practices, such as maintaining employer superannuation payments
while the employee is on leave, flexible working practices and
‘Keeping in Touch’ days.
These are often above New Zealand’s minimum legislative
requirements, and implementing this change ahead of the
New Zealand Government demonstrates our commitment
to our employees and their families.
Our parental leave program was one of the reasons we were
awarded the Supreme White Camellia award, a United Nations
Women and United Nations Global Compact initiative celebrating
organisational commitment to the Women’s Empowerment
Principles (WEPs).
Angela Jia, Private Banker, ANZ and family.
CASE STUDY
CO
FINANCIAL WELLBEING
FINANCIAL
WELLBEING
58
1456890263731416
COLLABORATING WITH OUR
PARTNERS TO WELCOME REFUGEES
TO THE WORKPLACE
Barriers to finding meaningful employment and difficulties in
navigating local workplace culture are significant, sometimes
proving overwhelming, for even the most highly qualified and
skilled people resettling in our communities.
This year, we hosted our 200th Given the Chance participant at
ANZ. We have partnered with the Brotherhood of St Laurence
(BSL) since 2007, providing Given the Chance job seekers,
six-month work placement opportunities in various areas of the
bank, predominantly across our Contact Centres and branches.
We continue to work in partnership with BSL to expand the Given
the Chance program and encourage other employers to adopt
the model in support of a range of disadvantaged job seekers.
Together with BSL we are working on delivering the program
in New South Wales, leveraging our relationships to engage
new business partners, determining the best operating model
for the program and review training content for candidates
and hiring managers.
This expansion will demonstrate that, with the right support,
people from disadvantaged backgrounds can succeed in a work
environment and participate fully in social and economic life.
ANZ AND SYDNEY MARDI GRAS COMMUNITY GRANTS
Together with Sydney Gay and Lesbian Mardi Gras we
developed a national Lesbian, Gay, Bisexual, Transgender,
Queer and Intersex (LGBTQI) community grants program,
the ANZ and Sydney Mardi Gras Community Grants.
Launched on the International Day Against Homophobia,
Transphobia and Biphobia (IDAHOT ) this year, the program
provides grants of up to $10,000 to LGBTQI not-for-profit
organisations, charities and individuals to help support local
LGBTQI communities.
Sydney Gay and Lesbian Mardi Gras CEO, Terese Casu, said:
“This national grants program is important because there’s real
grass roots work that needs to be done in Australia for LGBTQI
communities, especially in regional Australia where isolation
is an issue — and we know these grants will provide much
needed support for the important work being done.”
An organisation to have benefited is the Cairns AIDS Council
which builds HIV awareness in the community and is
removing the AIDS stigma in Far North Queensland. Focusing
on Aboriginal and Torres Strait Islander communities, the
organisation last year partnered with Frank (a sexual health
education body) and ACON (who provide a ‘pop up’ dialogistic
testing site) to create a Rapid HIV and STI Test incentive.
While collaboration between ANZ and Sydney Gay and
Lesbian Mardi Gras has spanned over 12 years, the new grants
program extends our partnership beyond official festivities
to ensure ongoing support of LGBTQI communities and
projects. Eighteen grants, worth a total of $100,000, have
been distributed to date.
HIGHLIGHT
GIVEN THE CHANCE
Daryoush left Iran and came to Australia via a long and
dangerous journey through many countries.
He joined ANZ in 2015 via our Given the Chance program
and is now a Home Loan Coach, helping customers realise
their home ownership aspirations.
“I work across three branches, I have three different
customer demographics in three different suburbs where
the branches are located. I think my background, having
lived and worked in many countries, helps me understand
that all of the customers are human beings with
varying needs.
My skills, especially my lifelong work dealing with different
people in many countries and from all walks of life has
actually helped me to provide support to my colleagues
and our customers.”
CASE STUDY
EMPOWERING INDIGENOUS STUDENTS
An Indigenous School Based Traineeship is completed during
Years 11 and 12, providing students a chance to gain work
experience. It contributes towards their high school education
and sets them up with skills to enter the workforce after
competing school.
School Based Trainee, Roshaun, started in one of our Gippsland
branches (Victoria) at the beginning of 2018. She was keen to
make the most of the opportunity to learn and connect with
people outside of school. With the help and support of her
manager, Kerry, Roshaun has embraced branch life.
“The skill that I am learning now is to be helpful to other people
and I am building up the confidence to connect and create good
conversations,” said Roshaun.
Our first Indigenous trainee joined ANZ in 2003 and since then
many of our trainees have gone on to achieve success through
further studies and developing their careers both within and
outside of ANZ. We have provided more than 1,300 Indigenous
traineeships and employment opportunities across our
Australian business.
Roshaun, School Based Trainee.
CASE STUDY
FINANCIAL
WELLBEING
CO
FINANCIAL WELLBEING
SUPPORTING INDIGENOUS
AUSTRALIANS
We have a role to play in helping overcome
the social and economic disadvantage
experienced by many Indigenous Australians
and are directing our efforts to those areas
where we can make the most difference.
For this reason our focus is on employment opportunities;
nurturing our employees and supporting their career progression;
enabling social and financial participation of Aboriginal and Torres
Strait Islander peoples; and building the capacity of Aboriginal and
Torres Strait Islander businesses.
This year we have continued to provide employment
opportunities to Indigenous Australians through our programs
which include: Indigenous School Based traineeships, Indigenous
full-time traineeships and our ‘Make your Mark’ work placement
program. Our 2018 target for Indigenous employment was
met this year, with 100 people being employed (against
a target of 100).
We are seeking to foster an environment of respect and
awareness for Aboriginal and Torres Strait Islander culture
and history within ANZ.
Our employees have access to cultural learning
opportunities including:
-online cultural awareness training (now mandatory for all customer
facing employees), which is also accessible to our customers and
the wider community; and
-face-to-face cultural awareness sessions (for our Australian
Leadership Team).
INDIGENOUS PROCUREMENT
The amount that we spend with Indigenous businesses
in Australia almost tripled this year to $2.15 million from
$729,000, exceeding our Reconciliation Action Plan
targets for the second year running. We also more than
doubled the number of Indigenous businesses in our supply
chain, with 13 businesses new to ANZ this year.
Improving the capability of Indigenous businesses is, however,
achieved through more than spending. To help promote businesses,
we held our inaugural Indigenous Business Trade Fair in Melbourne
during NAIDOC Week. The fair was run together with Supply Nation
and over 20 Indigenous businesses were invited to promote their
art, designs and business services.
We again sponsored the Supply Nation Supplier Diversity
Partnership award at the annual Supplier Diversity awards and
were this year invited to join the Supply Nation ‘Leadership
Roundtable’. This Roundtable brings together supplier diversity
professionals to workshop innovative approaches to growing
a business to meet a specific opportunity.
IMPROVING FINANCIAL WELLBEING
IN THE INDIGENOUS COMMUNITY
In 2018, more than 7,400 people participated in MoneyBusiness,
our adult financial education program designed to build the
money management skills and confidence of Aboriginal and
Torres Strait Islander peoples. Started in 2005, MoneyBusiness has
reached over 71,000 participants and has been delivered in over
320 communities by Australian Government-funded service
providers or our community partners. Refer to pages 49–54
for further details on our financial wellbeing programs.
We are creating opportunities for our branch employees to attend
MoneyBusiness facilitator training, regularly provided by ANZ to
financial capability workers and financial counsellors working with
Indigenous communities. The involvement of our employees in
this training aims to deepen their awareness of the issues faced
by our Indigenous customers and establish appropriate referral
pathways for customers who could benefit from additional money
management support. Refer to page 19 for further details on our
approach to vulnerable customers.
60
ANZ 2018 SUSTAINABILITY REVIEW
JILPANTI ENTERPRISES —
ANZ FORTESCUE PARTNERSHIP
Through our partnership with Fortescue Metals Group Ltd
(Fortescue) we are providing finance to Jilpanti Enterprises Pty Ltd
(Jilpanti). Jilpanti is owned and operated by Puutu Kunti Kurrama and
Pinikura peoples’ Elder Lennie Ashburton and his son Leonard. The
company is providing exploration earthworks for Fortescue.
“The support of Fortescue and ANZ has allowed Jilpanti to become
a more financially viable entity. Having access to funds to purchase
equipment has meant that we are creating steady growth for our
business, increasing our income and employing Aboriginal people
directly into our business”, Lennie Ashburton explains.
Under the $50 million funding initiative, which is supported by
a guarantee from Fortescue, eligible Indigenous businesses —
especially those without an established trading or credit history —
are able to access finance at a competitive rate through ANZ.
In the case of Jilpanti, they have purchased two 80 tonne excavators
and several vehicles which they would otherwise have hired at more
expensive casual hire rates.
Our Managing Director of Institutional banking in Australia Graham
Turley is pleased that through the partnership with Fortescue, we are
able to open up opportunities for Indigenous businesses. “We hope
that this experience will help these businesses grow sustainably,
become more financially independent and ultimately drive economic
growth and employment in their communities,” he said.
Left to right — Frank Van Rooyen, Head Of Natural Resources Australia Institutional, ANZ
— Leonard Ashburton, Jilpanti Enterprises — Darryn Brice, Relationship Manager, WA North,
ANZ — Heath Nelson, Manager, Community Development, Fortescue Metals Group.
FINANCIAL WELLBEING
61
CASE STUDY
FINANCIAL
WELLBEING
62
1456890263731416
BUILDING AN ACCESSIBLE
AND INCLUSIVE BANK
Our commitment to strengthening financial
wellbeing is reflected in our ongoing work
to build a more accessible and inclusive
bank for our customers, our employees
and the community.
Accessibility ‘champions’, drawn from all areas of ANZ, collaborate
to identify and overcome barriers to independent, convenient
and dignified banking, and to foster an inclusive workplace culture
which embraces diversity and all abilities. Through innovation
and ongoing consultation with a wide range of community
stakeholders, we seek greater economic and social participation
for people with disability.
We recently released ‘Our Approach to Accessibility and Financial
Inclusion’, consolidating our key commitments into a single
document that provides a more holistic view of how our approach
to accessibility and financial inclusion aligns with our purpose and
Sustainability Framework. This document replaces our ‘Financial
Inclusion Action Plan’ and ‘Accessibility and Inclusion Plan’. It
creates a consistent governance and accountability framework,
enabling us to identify gaps or opportunities across our business
that require attention.
Our key commitments are strongly linked with our approach
to supporting vulnerable customers, our employee diversity
and inclusion initiatives and our Reconciliation Action Plan
(discussed further on pages 19–20, 55–58 and 59–61 respectively).
They also reflect our approach to human rights and the role we
play, alongside other financial services organisations and large
Australian businesses, in contributing to a fair and inclusive society.
‘Our Approach to Accessibility and Financial Inclusion’ is available
on anz.com/cs.
We continue to nurture an inclusive workplace culture across
the bank and received a number of awards this year including
the ‘Apolinario Mabini Special Employer of the Year’ award in the
Philippines and the ‘People Matters’ Award in India. In Australia,
we were a finalist in the National Disability Awards Employer
of the Year. These awards recognise achievements and
contributions of people, organisations and initiatives that
improve the lives of people with disability.
Our employees have maintained their enthusiasm for our
disability mentoring program, PACE (Positive Action Towards
Career Engagement), which is delivered in partnership with the
Australian Network on Disability (AND). The program supports
jobseekers and university students with disability. In 2018 we
matched over 100 mentors across Australia, with participants
in Sydney, Melbourne, Brisbane, Canberra, Adelaide, and Perth.
In the five years that we have participated in PACE, we have had
over 450 mentors, contributing more than 2,000 volunteer hours.
PACE provides our employees with the opportunity to gain
insights into some of the employment barriers faced by people
with disability, and build their disability awareness. It also helps
us better understand the needs and preferences of our diverse
customer base — informing the development of more accessible
and inclusive products and services.
AUSTRALIAN NETWORK
ON DISABILITY ACCESS
AND INCLUSION INDEX
We participated for the first time in the Australian
Network on Disability’s (AND) Access and Inclusion Index.
The Index enables Australian organisations to understand
their current level of maturity for access and inclusion
practices across their business. This helps to identify areas
of strength and areas for improvement, and ultimately
build greater disability awareness. We were ranked third
of the 28 participating organisations.
The AND benchmark report commended ANZ as “a role
model for other organisations when it comes to access and
inclusion”, and highlighted the opportunity for ANZ to “drive
change outside the bank as an influencer and thought leader
in both the banking industry and the wider community.”
Participating in the Index was an opportunity for us to
stocktake and review progress against our Accessibility
and Inclusion Plan. It provided us with insights into our
gaps, and practical recommendations for how we can
make ANZ even more accessible and inclusive for our
customers, our employees and the community.
HIGHLIGHT
63
FINANCIAL WELLBEING
ACCESSIBLE TECHNOLOGY, PRODUCTS
AND SERVICES, AND PLACES OF WORK
We have been actively engaged in a cross-industry consultation,
led by the Australian Bankers Association, to develop new
Accessibility Principles. The consultation considered the rapid
technological changes in banking and the importance of ensuring
people with disability are not inadvertently locked out of banking
services through poor design. Principles of Universal Design
underpin the new Accessibility Principles and we have already
begun to consider how to embed these across our technology,
products and services. The consultation has also led to greater
industry collaboration around accessibility.
We continue to strive for best practice in accessibility and inclusive
design for our branches and our workplaces. We consulted with
external specialists and also asked our own employees with
disability for their insights and recommendations as to how we
could make their experience at work easier and more independent
through the fit-out at our new ‘campus’ site, adjacent to our
Melbourne headquarters. We looked at approaches to internal
navigation, ease of opening doors, kitchen bench heights, automatic
doors for accessible toilets and easy access kitchen taps.
SPECTRUM PROGRAM
We recognise that the autism community (sometimes
described as part of the neurodivergent community) has
much to offer the workplace, but traditional recruitment
processes tend to filter these job applicants out, rather than
filter them in, despite their often highly valued skills and ways
of thinking. Currently, around 40% of adults on the autism
spectrum in Australia are employed, compared with 83% of
people without disability, many working in jobs below their
educational or professional level.
To combat this we have partnered with DXC Technology, a
global services company — that has successfully pioneered
autism employment initiatives in several Australian Government
departments, employing close to 60 people. Working with
DXC Technology, we have adapted their autism employment
initiatives for a corporate environment; the ANZ Spectrum
Program. The program is designed to offer employment
opportunities to the autistic community through meaningful
work, leading to career opportunities.
We have established the program with nine participants,
as part of a three-year commitment. A non-traditional
recruitment process was undertaken in December 2017 using
robots, coding and real world scenarios — to understand how
the applicants to the program worked as a team, adapted
to new circumstances and used their knowledge and skills.
We are training the participants in sought after areas of
cyber security and test analysts. “Cyber security roles are
generally inaccessible to entry level applicants due to the
level of certification needed. ANZ has effectively offered to
take me and my team on as trainees and provide support
for us in working towards obtaining these required
certifications,” said a participant.
The program starts with an intensive induction and support
period assisting the participants to settle into corporate life,
build a sense of team, manage their commute, and in some
cases, their first experience of financial independence. The
participants develop at their own pace and, when ready,
transition from the program into their assigned team.
HIGHLIGHT
BUILDING AN INCLUSIVE WORKPLACE CULTURE
AT ANZ BENGALURU SERVICE CENTRE
Our Bengaluru Service Centre in India employs around 6,000
employees and supports our business in Australia, New Zealand
and Asia.
Over the last decade, under the leadership of Pankajam Sridevi,
Group General Manager Operations and Services, the Centre
has promoted the hiring and inclusion of people with disability
through various initiatives, including awareness programs
for hiring managers, partnerships with non-government
organisations, skills mapping for employees with disability,
and sign language training for team members. Bengaluru
Service Centre today has almost 150 employees with disability.
In 2017, Bengaluru Service Centre joined a 120-member network
of disability NGOs, committing to the Mission 1000 project.
The initiative, which recognises that traditional disability
employment often fails people with severe disabilities, brings
employers and NGOs together to challenge stereotypes and
assumptions on both sides.
It aims to provide 1,000 opportunities to people with disability
in 1,000 days. Opportunities can be employment, training or
provision of services. To date, our Bengaluru Service Centre
has provided more than 470 opportunities through the
Mission 1000 project.
“Mission 1000 is still early in its development — but we are
confident that with time and serious engagement from a much
larger group of companies, the model has great potential. We need
to move from the support of a small group of converted CEOs who
are passionate about this — to create a movement that brings in
a much wider community of businesses and business leaders,”
said Pankajam Sridevi.
Left to right: — Sharon George, Health, Safety and Wellbeing Manager, ANZ
— Channakeshava Jayaram, Senior Credit Assessment Officer, ANZ.
64
ANZ 2018 ANNUAL REVIEW
CASE STUDY
FINANCIAL
WELLBEING
COMMUNITY INVESTMENT
Through our approach to community
investment, we connect with, and invest
significantly in, the communities in which
we operate. We provide many opportunities
for our people to get involved, from
volunteering, to funding and participating
in community projects, or donating
through our workplace giving programs.
Since 2005, we have measured the dollar value of our community
investment in accordance with the London Benchmarking Group
(LBG) methodology, a global standard for reporting community
investment. In 2018, our community investment was $136.9 million,
an increase of 4.4% from 2017.
CONTRIBUTION BY TYPE
1
Type$
Cash 21,870,181
Time 4,519,601
In kind 343,357
Management costs3,041,920
Forgone revenue 107,101,262
Total 136,876,321
GIVING
WORKPLACE GIVING PROGRAM
Our workplace giving program enables employees in Australia
to make contributions to any of our 25 nominated charity
partners through regular pre-tax payroll deductions. We match
all employee contributions dollar for dollar (up to $5,000 per
employee in a tax year) and all donations go directly to the
nominated organisations.
Many of our charity partners work in areas aligned to our
priority areas of financial wellbeing, housing and environmental
sustainability. We have also included charities in the areas of health,
international aid and children because we know many of our
employees care about these issues. This year we added Foodbank
Australia, St Vincent de Paul Society, The Nature Conservancy
and The Smith Family’s child sponsorship to our workplace giving
program. In 2018, together with our employees, we donated
$986,000, a 6% increase from 2017.
ANZ STAFF FOUNDATION
The ANZ Australia Staff Foundation is a charitable trust that
provides small grants of up to $5,000 to charities around Australia.
The Foundation is jointly funded by employee contributions
matched dollar for dollar by ANZ. A National Advisory Board
and state committees comprised of employees manage the
Foundation and are responsible for assessing the grants for
funding. This year, the Foundation celebrated its 30th year and
provided 48 grants, giving more than $221,000 to community
organisations across Australia. Since its establishment, the
Foundation has provided approximately 860 grants, totalling
more than $4,975,000.
In New Zealand, the Staff Foundation is a charitable trust that
provides grants of up to NZ$25,000 to New Zealand charities.
Similar to our workplace giving program in Australia, employees
donate from their fortnightly pay and their donations are matched
dollar for dollar by ANZ. A board of New Zealand Staff Foundation
volunteer members is responsible for assessing the grants for
funding. This year 88 grants were made, providing more than
NZ$654,000 to community organisations across New Zealand.
In Fiji, the Staff Foundation was established in 2006 as a charitable
trust for ANZ, managed and run by a board of Staff Foundation
members. The Staff Foundation is funded by voluntary employee
payroll donations and matched dollar for dollar by ANZ. The
Foundation provides opportunities for all kinds of employee
involvement and aligns to charitable objectives — be it
encouraging and helping employees or an organisation apply
for funding or assisting a funded project come to life through
volunteer efforts. This year the Trust approved and funded
$89,000 in projects.
CUSTOMER DONATIONS PROGRAM
Our customer donations program provides our internet
banking customers in Australia with a convenient and simple
way to donate to charitable organisations. In 2018 more than
$438,000 was donated to charity through this facility.
1.
Cash: Gross monetary amount paid in support of a community organisation/project. Time: Cost to the company of the paid working hours contributed by employees
to a community organisation or activity. In-kind services: Other non-cash resources to community activities (eg. company products or services or corporate resources).
Management costs: Costs incurred in making contributions, such as salaries and overheads. Forgone revenue: The cost of providing low or fee free accounts to a range
of customers such as government benefit recipients, not-for-profit organisations, students and the elderly.
65
FINANCIAL WELLBEING
VOLUNTEERING IN THE COMMUNITY
Over 116,000 Australians currently experience homelessness
— that is one in every two hundred people, with over 40%
aged under 25.
St Vincent de Paul Society, one of our community partners, offers
a ‘hand up’ to people in need, including those experiencing
homelessness. Their soup van program is predominantly run
by volunteers who help distribute food and drink to disadvantaged
communities within capital cities and regional centres across Australia.
A number of our employees have used their volunteering leave
to become ‘vannies’, sharing their experiences with their
colleagues to help increase awareness of homelessness.
Photo credit: St Vincent de Paul Society Victoria.
MY OWN VIEW IS THE MORE
GROUNDED WE CAN BE, ESPECIALLY
AS BANKERS, THE MORE WE
HAVE WIDER VISION ON WHAT
WE CAN DO TO ACTUALLY HELP
OTHER PEOPLE. YOU’VE GOT TO
BE IN THERE AMONG IT TO REALLY
UNDERSTAND WHAT’S GOING ON.”
Jason Batson, District Manager, ANZ
“
CC
CONTESURTCOO C2T018P1I
CASE STUDY
HOUSING
67
FINANCIAL WELLBEING
SHAREHOLDER GIVING PROGRAM
Our shareholder giving program allows shareholders to
donate some or all of their cash dividends to any of our
community partners. This year more than $39,000 was
donated by our shareholders.
SEEDS OF RENEWAL PROGRAM
We are contributing to regional Australia by providing grants that
are helping build vibrant and sustainable communities. This year
marked the 15th year of our support for the Seeds of Renewal
grants program, administered by the Foundation for Rural and
Regional Renewal. In 2018, we funded $250,000 in community
grants, shared between 22 projects across regional Australia. One
organisation to receive a grant was the ABC Foundation Limited
in Carnarvon, Western Australia. Their project, ‘Don’t Let Your
Crop Rot’, seeks to develop a social enterprise that increases local
fresh food availability, local employment and reduces food waste.
Further information on the projects funded is available on
frrr.org.au/grants/ANZ-seeds-of-renewal.
VOLUNTEERING
Target
Increase employee volunteering participation
rate in 2018 to 30%.
Performance
Across the Group employee volunteering
participation increased to 34.6%.
Relevant United Nations Sustainable Development Goals
17.16 Enhance the global partnership for
sustainable development, complemented by
multi-stakeholder partnerships that mobilise
and share knowledge, expertise, technology and
financial resources, to support the achievement
of the sustainable development goals in all
countries, in particular developing countries.
Our Volunteer Leave Policy, which applies to permanent, regular
and fixed-term employees, provides for at least one day of paid
volunteer leave each year. This year our people volunteered
124,113 hours to community organisations. This represents more
than 15,500 working days and more than $4.5 million in value
to the community. In May, we partnered with GoodCompany
to create a new volunteering portal, making it easier for our
employees to search and apply for volunteering opportunities
with various charities across Australia.
DISASTER RELIEF
We have a role to play in helping customers and communities
manage and recover from natural disasters. Our Disaster Relief and
Recovery Policy guides an efficient, coordinated and proportionate
response to disasters. The policy encompasses a range of measures
for affected communities and customers including charitable
donations, hardship assistance, financial advice and employee
volunteering to assist with community rebuilding.
In February 2018, Cyclone Gita caused significant damage to
homes and vital infrastructure in Samoa, America Samoa and
Tonga. In response, we implemented our customer assistance
package, waiving fees on international money transfers and
other banking services. We also donated NZ$100,000 to the
New Zealand Red Cross Pacific Disaster Fund to provide
hygiene kits, mosquito nets, cooking and sanitation equipment
as well as experienced field workers to assist in the aid and
recovery process.
SHOUT FOR GOOD
AND FIGHTMND
We have facilitated more than $7.2 million in donations
for around 250 charities through Shout for Good (Shout),
our digital giving platform — up from $250,000 in 2016
and $2.4 million in 2017. This considerable organic growth
highlights the importance of digital donations in today’s
increasingly cashless society.
Shout enables charities to fundraise digitally via SMS
and online, as well as ‘tap to donate’ using the Shout app
on ANZ BladePay™ devices. Earlier this year, Shout became
the first fundraising platform in Australia to offer the
Donate with Apple Pay functionality within its iOS app.
One of the charities we supported this year was FightMND
and its ‘Big Freeze 4’ campaign. Volunteers were provided
with 120 ANZ BladePay™ devices running the Shout app,
allowing people to tap their mobile payment device to
donate or to purchase beanies.
Funds raised during the campaign through the ANZ
BladePay™ devices as well as Shout’s web and SMS digital
giving technology reached over $3.6 million, more than
half the total amount raised during the campaign.
HIGHLIGHT
68
1456890263731416
We provided support to customers affected by a number of
natural disasters in Australia in March 2018. This included Cyclone
Marcus on the Northern Territory north coast; significant flooding
in Northern and Central Queensland; and bushfires in NSW and
Victoria. Collectively, these events were responsible for estimated
insured losses of around $161 million. Support offered to impacted
customers included:
-suspension of repayments on loans, including credit cards,
for up to three months;
-waiving of fees for restructuring business loans considered
necessary due to the impacts of the event;
-early access to term deposits without incurring fees;
-waiving of fees associated with the replacement of damaged
business EFTPOS/credit card terminals; and
-assistance such as emergency funds and temporary
accommodation to eligible customers with home
and contents insurance.
The July 2018 collapse of the Xe-Pian Xe Namnoy dam in Attapeu
Province, Laos displaced large numbers of people. We donated
US$10,000 to World Vision Laos to support relief efforts, while
our local employees provided immediate emergency assistance
to affected households by donating and packing supplies for
distribution by the Lao Red Cross.
Finally, this year has been extremely difficult for many of our rural
and regional customers struggling with drought conditions in
New South Wales and Queensland.
In response, we donated $1 million to rural financial counselling
and community grants assisting farmers in drought-affected
areas and launched a drought support package that included the
following relief measures:
-$130 million in discounted loans available to support farmers
through this season and help them prepare for next season;
-1.00% reduction on variable business farming loans in drought
declared areas;
-suspension of loan repayments, including credit cards for
up to three months;
-continued moratorium on farm repossessions in
drought-declared regions;
-a longstanding commitment not to increase the interest
rates of distressed customers; and
-a commitment to providing a solution for customers eligible
to offset their Farm Management Deposits against primary
production income, in line with current legislation.
HIGHLIGHT
KALEIDOSCOPE
This year we celebrated our 11th annual employee art
exhibition and charity auction, Kaleidoscope.
Employees from across many of the countries in which we operate
submitted 80 pieces of art, with the auction raising over $37,000.
Proceeds from this year’s event went to home.one, a social
enterprise that operates an environmentally sustainable cafe.
Home.one provides paid ‘on-the-job’ training to young people
who are experiencing, or at-risk of, homelessness, in addition
to supporting them to access secure housing. The money raised
from this year’s auction will help home.one to purchase equipment
to setup their second cafe — home.two
Photo credit: Hugh Davies.
HOUSING
TAX TRANSPARENCY
We are committed to paying our fair share
of taxes and recognise that tax transparency
is, rightly, an issue of community concern.
Across the countries in which we operate,
we contribute directly to the economy
by paying taxes, money which is then
used by governments to provide public
services and amenities for the benefit
of the wider community.
Our tax disclosures meet the requirements of the Australian Board
of Tax, Voluntary Tax Transparency Code (TTC). We have prepared
our tax transparency disclosures in this report in conformance with
the TTC, complementing voluntary tax disclosures we have made
in previous years. Refer to page 86 for additional disclosures.
In 2018, our global net taxes borne amounted to $3,188 million
(2017: $3,415 million). We also directly remitted an additional
$4,460 million (2017: $4,760 million) in taxes which were collected
(primarily relating to GST/VAT and employee remuneration)
on behalf of and paid to the governments of the countries
in which we operate.
TOTAL TAXES BORNE BY
ANZ GROUP (AUD MILLIONS)
20182017
Income Tax Expense
Consisting of:
Australia$1,685$2,072
New Zealand$702$643
APEA$282$214
$2,669$2,929
Unrecovered GST/VAT$294$265
Employee Related Taxes$183$182
Other Taxes/Duties$42$39
Total Tax Payments Borne
1
$3,188$3,415
We operate in 34 markets through branches and subsidiaries.
We have 11 subsidiaries in countries which the Australian Taxation
Office (ATO) classifies as ‘specified countries’ (i.e. tax havens). These
subsidiaries are in countries in which we hold a banking licence
and have been fully disclosed to the ATO.
The Major Bank Levy Act 2017 (the levy) was introduced in 2017,
effective from 1 July 2017. We have determined that the levy
represents a finance cost for the bank (rather than a tax) and is
included as a component of net interest income. This is presented
within interest expense in the Income Statement, available in the
2018 Annual Report on anz.com/annualreport and amounts
to $355 million.
OUR TAX STRATEGY AND
GOVERNANCE FRAMEWORK
We operate under a global tax governance policy which
is owned by the Board Audit Committee and states that our
tax affairs are managed in accordance with the Group’s low-risk
appetite and a philosophy based on an open and transparent
relationship with revenue authorities. The policy also covers
all taxes, associated credits and tax attributes.
As part of our tax governance framework, we have implemented
compliance policies, procedures and programs to ensure continued
adherence with the tax laws in all the countries where we operate.
Tax compliance is a fundamental part of business practices of ANZ
and our controlled entities.
Our tax culture and business practices are consistent with our
values and aspirations. We do not enter into any arrangements that
are designed to avoid or reduce the tax that we or our customers
and partners owe. The tax governance and tax transfer pricing
governance policies are publicly available on anz.com/cs.
In our two largest markets we have been party to an Annual
Compliance Arrangement (ACA) and Cooperative Compliance
Arrangement (CCA) with the Australian and New Zealand
federal tax regulators respectively for a number of years.
These arrangements continue to be effective in demonstrating
our focus on corporate governance standards, tax risk
management processes and comprehensive disclosure.
1.
Includes discontinued operations.
69
TAX TRANSPARENCY
AUSTRALIAN TAX TRANSPARENCY
In line with Australian legislation requiring the ATO to publish
specific income tax return data of corporate tax entities that report
a total income of $100 million or more, the following table provides
further transparency on our 2017 Australian income tax return data,
expected to be published by the ATO in December 2018.
30 September 2017
AUD MillionsTotal
1
Banking
Business
2
Wealth
Business
3
Super/pension
members
Total Income
4
$28,536$28,536–
Taxable Income
5
$10,053$7,154$2,899
Statutory Tax Rates30%15%/0%
Tax Liability $2,359$2,097
6
$262
INTERNATIONAL
RELATED-PARTY DEALINGS
We provide a broad range of banking and financial products
and services to individual and business customers in multiple
geographic markets. In the course of serving our customers across
the markets in which we operate, transactions take place which
give rise to international related-party dealings (IRPDs) with offshore
branches and subsidiaries.
The main IRPDs that impact us are set out below.
- Funding — To support normal business operations, namely
to facilitate customer lending and to meet regulatory capital
requirements, ANZ-related parties may undertake cross-border
short and long-term funding transactions.
- Service Centre support — To obtain cost, risk management
and enhanced customer service advantages, we locate
Service Centres in India, the Philippines, China and Fiji
to provide support services to other ANZ-related parties.
- Support and Technology Services — Business support,
operations and technology functions are centralised principally
in Australia, and provide support to multiple ANZ-related parties.
- Derivatives and related activities — Our Markets
line-of-business operates in a truly global derivative market,
and consequently, ANZ-related parties will engage in derivative
sale and trading arrangements with other ANZ-related parties.
Consistent with the principles of the our Tax Transfer Pricing
Governance Policy, our IRPDs are conducted in a manner consistent
with Australian taxation law and international taxation norms,
including applying the ‘arm’s length principle’.
7
The main counterparties ANZ Australia deals with are
branches and subsidiaries located in New Zealand, Singapore,
the United Kingdom, Hong Kong, the United States and India.
Each counterparty has its own significant local country business
presence, a large workforce of employees and economic substance.
1.
As expected to be reported by the ATO when published.
2.
Includes ANZ’s income from its life insurance business.
3.
Income attributable to super/pension policyholders is not included in ANZ’s income, however taxable income of policyholders is required to be included in ANZ’s income tax return.
This amount represents tax paid by ANZ on behalf of super/pension policyholders at 15% / 0% and includes franking credits, foreign income tax offsets and Capital Gains Tax discounts.
4.
Total Australian income before all expenses (e.g. Interest expense, employee costs, depreciation etc). This amount includes exempt income, other non-assessable income and foreign
source income.
5.
Taxable income represents assessable income derived from all sources less allowable deductions incurred in gaining that income.
6.
The 2017 tax liability includes tax offset reductions of $49 million relating to franking credits and foreign income tax offsets.
7.
All IRPDs must be priced as if the related parties were acting at arm’s length. In essence the pricing determined should be equivalent to that found in a normal commercial pricing
arrangement between non-associated parties.
70
ANZ 2018 SUSTAINABILITY REVIEW
2018
SUSTAINABILITY
PERFORMANCE
SUMMARY
CONTENTS
Responsible business lending 72
Environment 75
Employees 77
Community 83
Customers 84
Voluntary tax transparency 86
RESPONSIBLE
BUSINESS LENDING
Group lending profile2018201720162015
Total group EAD ($b)
1,2
944903894903
Exposure at default (EAD) as a % of group total
2
2018201720162015
Consumer lending39.7%41.5%40.6%38.6%
Finance, Investment and Insurance19.6%17.2%17.4%18.8%
Property Services6.8%6.6%6.8%6.6%
Manufacturing4.6%4.5%5.2%6.3%
Agriculture, Forestry, Fishing3.7%3.8%3.9%3.7%
Government and Official Institutions6.9%7.2%6.2%4.6%
Wholesale Trade3.0%3.0%3.1%3.9%
Retail Trade2.2%2.3%2.4%2.6%
Transport and Storage2.0%2.0%2.2%2.3%
Business Services1.6%1.7%1.7%1.9%
Resources (Mining)1.6%1.5%1.8%2.2%
Electricity, Gas and Water Supply1.2%1.3%1.3%1.4%
Construction1.4%1.4%1.4%1.6%
Other5.7%6.0%6.0%5.5%
Group Resources (mining) exposure by sector ($b)2018201720162015
Oil and Gas Extraction7.47.07.88.6
Metal Ore Mining4.43.54.04.9
Coal Mining1.41.11.52.3
Services to Mining1.21.41.72.9
Other Mining0.91.01.11.3
Total15.314.016.120.0
1.
2015 value restated
2.
Post CRM EAD, net of credit risk mitigation such as guarantees, credit derivatives, netting and financial collateral. Excludes amounts for ‘Securitisation’ and ‘Other Assets’ Basel asset classes.
72
ANZ 2018 SUSTAINABILITY REVIEW
Group Electricity, Gas and Water Supply exposures by sector ($b)
1
2018201720162015
Electricity Generation4.84.85.45.6
Electricity Transmission2.62.91.91.9
Gas Supply1.41.61.81.8
Electricity Distribution and Supply1.51.41.41.7
Water Supply0.91.10.91.7
Sewerage and Drainage Services0.30.10.10.1
Total11.411.811.512.8
Group Agriculture exposures by sector ($b)
1
2018201720162015
Dairy12.612.813.713.0
Grain/Wheat5.95.75.65.4
Beef5.14.84.74.6
Sheep and Other Livestock3.33.13.23.1
Horticulture/Fruit/Other crops4.44.24.04.0
Forestry and Fishing/Agriculture Services3.63.33.33.1
Total34.834.034.533.2
Average emission intensity of generation financed
(tonnes CO
2
-e per megawatt hour of electricity generated)
2
2018201720162015
Australia0.660.580.620.64
Outside Australia0.080.240.160.20
Project finance portfolio (%)
1
2018201720162015
Renewables 76%70%63%60%
Coal 10%16%19%18%
Gas 13%13%18%22%
Project finance commitment to renewable energy ($m)
3
2018201720162015
Renewables1,0761,141875881
1.
Values may not add to totals due to rounding.
2.
Refer to page 87 for calculation methodolgy
3.
Refers to ANZ’s lending commitments as at 30 September 2018 to renewable energy projects made only on a non or limited recourse basis to the ultimate sponsors.
This figure does not include ANZ lending made to renewable energy projects that may be funded under corporate debt facilities or through other lending products.
73
2018 SUSTAINABILITY PERFORMANCE SUMMARY
1.
Category A: Projects with potential significant adverse social or environmental impacts that are diverse, irreversible or unprecedented.
2.
Category B: Projects with potential limited adverse social and environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed mitigated.
3.
Category C: Projects with minimal or no social or environmental impacts.
4.
Designated Countries are defined by the Equator Principles as “those countries deemed to have robust environmental and social governance, legislation systems and institutional
capacity designed to protect their people and the natural environment.” The list of Designated Countries can be found on http://equator-principles.com/.
5.
An independent review may not be required for all Projects eg. an Independent Review is not required for Category C Projects. Please refer to the Equator Principles for details
on what is required for each Category and product type.
Project finance
Project-related
corporate loans
Project
advisory
services
Equator principles categoryA
1
B
2
C
3
A
1
B
2
C
3
161111
By sector
Mining
Infrastructure2
Oil and Gas111
Power31
Other11
By region
Australia and NZ51
Asia11111
Europe, Middle East and Africa
Americas
By country designation
4
Designated51
Non-designated1111
Independent review
5
Yes16111
No
74
ANZ 2018 SUSTAINABILITY REVIEW
ENVIRONMENT
1
1.
Environmental reporting year runs 1 July–30 June to align with environmental regulatory reporting requirements.
2.
Incorporates Scope 2 emissions calculated in accordance with the ’location-based’ method as outlined in the ’GHG Protocol Scope 2 Guidance’ that amends the GHG Protocol Corporate
Standard. When applying the ’market-based’ method to calculate ANZ’s Scope 2 emissions, the combined Scope 1 and 2 emissions for Australia in 2018 are 11,515 tonnes. There are no
changes to the reported figures for ANZ’s New Zealand and APEA operations.
3.
Indicates estimated emissions arising from the operation of a black water treatment plant at ANZ’s Global Headquarters in Melbourne, Australia.
4.
Represents employee commuting emissions from employees working in key commercial office locations in Australia and New Zealand. This was calculated and externally assured
for the first time in 2015.
5.
Represents water emissions from key commercial office locations in Australia and New Zealand. This was calculated and externally assured for the first time in 2017.
GHG emissions scope 1 and 2 (tonnes CO
2
-e)
2
20182017201620152014
Australia123,056126,881136,751147,499154,922
New Zealand7,8876,9927,9109,18910,008
Asia Pacific, Europe and America 40,06947,12048,90852,84347,347
Scope 1 and 2 GHG emissions (tonnes CO
2
-e)171,012180,993193,569209,531212,277
GHG emissions scope 1, 2 and 3 (tonnes CO
2
-e)20182017201620152014
Scope 1
Premises energy3,5343,3613,6883,6183,981
Vehicle transport14,29415,52717,29018,92013,478
Other
3
142136144150152
Scope 2
Premises energy153,042161,969172,447186,844194,666
Scope 3
Premises energy32,23527,21834,81238,67843,562
Vehicle transport2,1782,8243,0353,7164,472
Travel — flights and accommodation35,32435,16638,88653,26854,688
Employee commuting
4
20,50421,23122,43722,888NA
Paper2,8613,3004,2704,9305,854
Waste2,4632,1542,2152,0731,967
Water
5
329329NANANA
Total global GHG emissions (tonnes CO
2
-e)266,906273,216299,224335,085322,820
Premises energy use (global)20182017201620152014
Electricity (MWh)212,299226,948236,144243,228260,713
Natural gas (MWh)17,15916,18516,65017,35018,128
Diesel (MWh)3,0972,8972,3081,5891,133
Total (MWh)232,555246,030255,102262,167279,974
75
2018 SUSTAINABILITY PERFORMANCE SUMMARY
1.
Values may not add to totals due to rounding.
2.
2017 value updated with actual tonnage replacing accrual forecasts which are otherwise necessary due to time lags and reporting cut-offs.
3.
In 2017–18 ANZ revised the 2016–17 waste baseline for Australian target sites. This has been used to extrapolate and restate 2016–17 figures and the new 2017–18 figures. Comparisons with
previous year’s figures must be viewed with caution due to different methodology.
4.
Represents the recycling rates in our Australian commercial offices (>20,000m
2
). This was calculated and externally assured for the first time in 2018.
5.
Represents water consumption in our Australian commercial offices (>10,000m
2
). This was calculated and externally assured for the first time in 2018.
Road transport energy use (global)20182017201620152014
Vehicle fuel (MWh)56,30961,72767,74166,25152,909
Paper use (Australia and New Zealand)
1
20182017201620152014
Office paper (tonnes)6347098769881,055
Customer paper (tonnes)
2
2,1882,4683,0093,2743,705
Total (tonnes)2,8233,1783,8854,2624,760
Waste (Australia and New Zealand)20182017201620152014
Waste to landfill (tonnes)
3
9249001,0991,1831,199
Recycling rate
4
66%67%NANANA
Water (Australia)
5
20182017201620152014
Water consumption (kL)128,270125,853131,606132,266NA
76
ANZ 2018 SUSTAINABILITY REVIEW
1.
Employee headcount is used as the basis for these disclosures. Includes all employees regardless of leave status but not contractors (who are included in FTE).
2.
Europe, America, Middle East and India.
EMPLOYEES
1
EMPLOYEE PROFILE
Employee headcount201820172016
Group total42,78747,77449,349
Employees by contract type and gender201820172016
FemaleMaleTotalFemaleMaleTotalFemaleMaleTotal
Permanent
Full-time 17,056 18,635 35,691 19,114 20,495 39,609 20,261 21,522 41,783
Part-time 4,891 707 5,598 5,210 712 5,922 5,288 665 5,953
Fixed term
Full-time3034027055438611404301436737
Part-time111471581043914310020120
Casual492143635541155696595161756
Total22,85319,93442,78725,51222,26247,77426,54522,80449,349
Employees by gender and region201820172016
FemaleMaleTotalFemaleMaleTotalFemaleMaleTotal
Asia Pacific 4,442 3,256 7,698 6,241 4,725 10,966 6,934 5,202 12,136
Australia 11,332 9,342 20,674 11,940 9,842 21,782 12,154 9,913 22,067
New Zealand 4,811 3,369 8,180 4,921 3,473 8,394 5,075 3,517 8,592
EAMEI
2
2,268 3,967 6,235 2,410 4,222 6,632 2,382 4,172 6,554
Total22,85319,93442,78725,51222,26247,77426,54522,80449,349
77
2018 SUSTAINABILITY PERFORMANCE SUMMARY
1.
Values may not add to totals due to rounding.
2.
Europe, America, Middle East and India.
Employee new hires by gender, age and region
1
201820172016
Number
Rate
(% of total
employees)Number
Rate
(% of total
employees)Number
Rate
(% of total
employees)
Employee new hires by gender
Female 2,631 6.1% 3,664 7.7% 3,420 6.9%
Male 2,245 5.2% 3,472 7.3% 2,973 6.0%
Total 4,876 11.4% 7,136 14.9% 6,393 13.0%
Employee new hires by age
<20 114 0.3% 120 0.3% 114 0.2%
20–24 1,105 2.6% 1,412 3.0% 1,302 2.6%
25–34 2,124 5.0% 3,404 7.1% 3,299 6.7%
35–44 1,017 2.4% 1,514 3.2% 1,231 2.5%
45–54 382 0.9% 537 1.1% 353 0.7%
55–65 122 0.3% 133 0.3% 88 0.2%
>65 12 0.0% 16 0.0% 6 0.0%
Total 4,876 11.4% 7,136 14.9% 6,393 13.0%
Employee new hires by region
Asia Pacific 845 2.0% 2,081 4.4% 1,617 3.3%
Australia 2,505 5.9% 2,766 5.8% 2,533 5.1%
New Zealand 865 2.0% 1,032 2.2% 1,035 2.1%
EAMEI
2
661 1.5% 1,257 2.6% 1,208 2.4%
Total 4,876 11.4% 7,136 14.9% 6,393 13.0%
78
ANZ 2018 SUSTAINABILITY REVIEW
1.
Values may not add to totals due to rounding.
2.
Europe, America, Middle East and India.
Turnover201820172016
Voluntary turnover5,3186,339 6,870
Involuntary turnover4,7682,454 2,084
Total10,0868,793 8,954
Rate (%)23.6%18.4%18.1%
Employee turnover by gender, age and region
1
201820172016
Number
Rate (% of
employee
category)Number
Rate (% of
employee
category)Number
Rate (% of
employee
category)
Employee turnover by gender
Female 5,413 23.7% 4,783 18.7% 4,783 18.0%
Male 4,673 23.4% 4,010 18.0% 4,171 18.3%
TOTA L 10,086 23.6% 8,793 18.4% 8,954 18.1%
Employee turnover by age
<20 64 45.4% 70 49.3% 80 58.0%
20–24 995 40.2% 959 33.1% 1,123 36.4%
25–34 4,063 25.7% 3,793 20.4% 3,978 19.9%
35–44 3,038 22.7% 2,293 15.8% 2,135 14.7%
45–54 1,284 17.8% 1,049 13.4% 1,004 12.8%
55–65 533 15.7% 547 15.9% 560 16.3%
>65 109 30.8% 82 23.6% 74 24.3%
Total 10,086 23.6% 8,793 18.4% 8,954 18.1%
Employee turnover by region
Asia Pacific 4,177 54.3% 3,237 29.5% 2,991 24.6%
Australia 3,776 18.3% 3,249 14.9% 3,407 15.4%
New Zealand1,10513.5% 1,190 14.2% 1,318 15.3%
EAMEI
2
1,02816.5% 1,117 16.8% 1,238 18.9%
Total 10,086 23.6% 8,793 18.4% 8,954 18.1%
79
2018 SUSTAINABILITY PERFORMANCE SUMMARY
1.
Measures representation at the Senior Manager, Executive and Senior Executive levels. Includes all employees regardless of leave status but not contractors (who are included in FTE).
2.
Senior Executive comprises persons holding roles within ANZ designated as Group 1. These roles typically involve leading large businesses, geographies or the strategy, policy and
governance of business areas (excludes Group Executive Committee).
3.
Executive comprises persons holding roles within ANZ designated as Group 2.
4.
Senior Manager comprises persons holding roles within ANZ designated as Group 3.
5.
Manager comprises persons holding roles within ANZ designated as Group 4.
6.
Non-Management comprises women holding roles within ANZ designated as Group 5 and 6.
7.
Values may not add to totals due to rounding.
DIVERSITY AND INCLUSION
Women in leadership201820172016
Total women in leadership (%)
1
32.0%31.1%29.9%
Employees by category and diversity201820172016
FemaleMaleFemaleMaleFemaleMale
ANZ Executive Committee33.3%66.7%33.3%66.7%27.3%72.7%
Senior Executive
2
25.2%74.8%27.2%72.8%26.4%73.6%
Executive
3
29.5%70.5%27.9%72.1%25.5%74.5%
Senior Manager
4
33.2%66.8%32.3%67.7%31.5%68.5%
Total in Leadership roles
1
32.0%68.0%31.1%68.9%29.9%70.1%
Manager
5
43.1%56.9%43.0%57.0%43.3%56.7%
Non-Management
6
54.7%45.3%62.3%37.7%62.9%37.1%
ANZ overall53.4%46.6%53.4%46.6%53.8%46.2%
Employees by category and age (%
of total employees 2018)
7
<2020–2425–3435–4445–5455–64>65
ANZ Executive Committee0.0%0.0%0.0%8.3%75.0%16.7%0.0%
Senior Executive
2
0.0%0.0%0.0%10.8%52.3%34.2%2.7%
Executive
3
0.0%0.0%0.2%32.4%56.2%10.8%0.4%
Senior Manager
4
0.0%0.0%4.8%45.4%40.1%9.3%0.3%
Manager
5
0.0%0.3%27.6%43.4%20.4%7.6%0.6%
Non-Management
6
0.6%10.2%46.8%21.9%11.6%7.8%1.0%
ANZ overall0.3%5.8%36.9%31.3%16.9%7.9%0.8%
Recruitment of under represented groups201820172016
Aboriginal and Torres Strait Islander peoples 10010087
Recruitment of those with self disclosed disability 131109216
Recruitment of refugees294133
Total260250 336
80
ANZ 2018 SUSTAINABILITY REVIEW
1.
Parental leave data is only available for Australia, New Zealand and India employees only.
2.
Includes learning and development cost base (i.e. salary and on-costs of employees within learning and development cost centre).
Parental leave
1
2018
FemaleMaleTotal
Employees who took parental leave during the year1,1145341,648
Employees returning to work after parental leave during the year1,0575061,563
Parental leave return to work rate (%)82%86%83%
Employees who returned to work after parental leave and were
still employed 12 months after return
7823971,179
Parental leave retention rate 12 months after return (%)78%76%77%
TRAINING
Average hours of training per employee201820172016
Senior Manager13.810.715.6
Manager16.013.615.4
Non-management24.422.021.8
Average hours of training by gender201820172016
Female21.619.220.0
Male19.217.218.0
Investment in learning and development 201820172016
Investment in learning and development ($m)
2
48.945.950.8
EMPLOYEE CONDUCT
Code of conduct and ethics201820172016
Code of conduct breaches 1,114 1,443 1,408
Investigations resulting in termination226 262 254
Whistleblowing reports137 121 71
81
2018 SUSTAINABILITY PERFORMANCE SUMMARY
1.
Lost time injury frequency rate, the number of lost time injuries per million hours worked.
2.
LTIFR claims: an Australian financial industry benchmarking measure which includes LTIs that result in claims. This measure is not applicable in other countries.
3.
Absenteeism is calculated as actual absenteeism hours lost (excluding carers leave) as a percentage of total hours scheduled to be worked by the workforce.
4.
The 2017 engagement survey was run as a pulse survey sent to 10% of the bank’s employees with a 57% response rate. The employee engagement survey was sent to all employees in
other years.
5.
Australia-only data. Effective date 17 August. ‘Senior Executives’ is Group 1, ‘Executives’ is Group 2, ‘Senior Managers’ is Group 3, ‘Managers’ is Group 4, and ‘Non-Managers’ is Groups 5
and 6. Excludes Executive Committee, casuals, fixed-term employees, and trainees/interns.
HEALTH AND SAFETY
Lost time injury frequency rate
1
201820172016
Australia1.8 1.5 1.4
– Australia
2
1.2 0.9 0.9
New Zealand1.4 1.1 1.1
APEA0.3 0.2 0.7
India0.0 0.3 0.2
Absenteeism rate (%)
3
201820172016
Australia2.0%2.0%2.0%
New Zealand1.8%1.6%1.5%
India1.9%1.9%1.9%
EMPLOYEE ENGAGEMENT
Employee engagement
4
201820172016
Employee engagement (%)73%72%74%
REMUNERATION
Female to male salary ratios (%)
5
Average
salary — by
category
Like-for-
like roles
Senior Executive97.3%101.0%
Executive97.4%98.5%
Senior Manager96.3%97.8%
Manager92.4%98.5%
Non-Management93.1%101.4%
82
ANZ 2018 SUSTAINABILITY REVIEW
1.
Includes forgone revenue $107 million, being the cost of providing low or fee free accounts to a range of customers such as government benefit recipients,
not-for-profit organisations and students.
2.
Commenced reporting in 2017.
COMMUNITY
Community investment2018201720162015
Community investment ($m)
1
136.9131.189.874.8
Volunteer hours124,113113,127113,071108,142
Employee volunteering participation rate (%)
2
34.6%29.4%––
Financial inclusion programs2018201720162015
MoneyMinded — estimated number of people reached>84,200>76,000>60,900>67,000
Saver Plus — number of people reached4,0244,0744,6492,826
83
2018 SUSTAINABILITY PERFORMANCE SUMMARY
Net Promoter ranking (relative to peers)2018201720162015
Australia Retail
1
3
rd
4
th
2
nd
4
th
Australia Business and Private Banking
2
3
rd
4
th
4
th
4
th
Australia Institutional
3
1
st
2
nd
1
st
-
New Zealand Retail
4
4
th
4
th
4
th
5
th
New Zealand Commercial and Agricultural
5
5
th
5
th
5
th
5
th
New Zealand Institutional
6
1
st
3
rd
1
st
–
Digitally active customers (%)2018201720162015
Australia
7
61%61%60%58%
New Zealand
8
68%65%62%59%
Customer complaints2018201720162015
Retail and Commercial Australia54,69045,59651,77147,140
Wealth Australia
9
19,47020,13920,97621,405
Retail and Business Bank New Zealand
9
31,39118,63018,95313,283
Wealth New Zealand
9
278175466567
CUSTOMERS
1.
Roy Morgan Research Single Source, Australian population aged 14+, Main Financial Institution, six-month rolling average to Sep’15, Sep’16, Sep’17 & Sep’18. Ranking based on the four major
Australian banks.
2.
DBM Business Financial Services Monitor. Base: Business and Private Banking (<$100m annual turnover) Main Financial Institution customers. Data based on business banking NPS only
(excludes Private Bank NPS). Six-month average to Sep’15, Sep’16, Sep’17 & Sep’18. Ranking based on the four major Australian banks.
3.
Peter Lee Associates 2018 Large Corporate and Institutional Relationship Banking survey Australia.
4.
Retail Market Monitor, Camorra Research, Retail: Sep’15, Sep’16, Sep’17 & Sep’18 (monthly). Ranking based on the five major Retail banks in New Zealand.
5.
Business Finance Monitor, TNS Kantar Research. Base: Commercial ($3m–$150m annual turnover) and Agricultural (>500K annual turnover) customers, Q3’15, Q3’16, Q3’17 & Q3’18 (quarterly).
Ranking based on the five major Commercial and Agricultural banks in New Zealand.
6.
Peter Lee Associates Large Corporate and Institutional Relationship Banking surveys New Zealand 2016–18, ranked against the Top 4 competitors (in 2016 rank based on question ‘which
bank would you be most likely to recommend’).
7.
Roy Morgan Research Single Source, proportion of ANZ customers aged 14+ conducted Internet banking using ANZ App or Website in last 4 weeks, 12 months rolling average to Sep’15,
Sep’16, Sep’17 & Sep’18.
8.
Proportion of ANZ customers who have used ANZ Internet Banking or ANZ goMoney™ at least once in the last 90 days. 12 months to Sep’15, Sep’16, Sep’17 & Sep’18.
9.
Previous years’ numbers restated due to increased accuracy of reporting.
84
ANZ 2018 SUSTAINABILITY REVIEW
Complaints referred by customers to external dispute resolution bodies2018201720162015
Retail and Commercial Australia
1
35192,8392,4722,360
Wealth Australia
2
501374384345
Retail, Business Bank and Wealth New Zealand
2
37538498
Privacy complaints2018201720162015
Australia307169174205
New Zealand123599569
Customer Advocate completed reviews (Australia)2018201720162015
General banking product reviews1,3861,1281,2941,032
Resolved wholly or partially in favour of the customer (%)50%45%52%58%
Insurance, superannuation and investments reviews418423398401
Resolved wholly or partially in favour of the customer (%)29%44%49%50%
Hardship2018201720162015
Customer requests for hardship assistance (Australia)37,31340,47049,15043,385
1.
Based on volumes reported by FOS.
2.
Previous years’ numbers restated due to increased accuracy of reporting.
85
2018 SUSTAINABILITY PERFORMANCE SUMMARY
2018 AU$m
AustraliaNew ZealandAPEATotal
Profit before income tax (PBT) as reported in the financial statements
1,2
6,0372,5278679,431
Prima Facie income tax expense based on local statutory tax rate1,8117082522,771
Permanent differences
Share of Associates' profit(54)(1)–(55)
Sale of MCC(78)––(78)
Sale of SRCB(84)––(84)
Sale of Cambodia JV5–813
Sale of PNG Retail, Commerical and SME––88
Wealth Australia — policyholder income and contributions tax243––243
Interest on Convertible Instruments67––67
Other149(2)(17)130
Income tax expense relating to current year liability2,0597052513,015
Temporary differences (movement)
Collective provision for loans and advances4(12)(25)(33)
Individual provision for impaired loans and advances(42)(5)6(41)
Other provisions1432(6)139
Software79(4)33108
Lease Finance167-23
Other26(12)1529
Total temporary differences (movement)226(24)23225
Other adjustments impacting current tax payable
3
(4)––(4)
Current year income tax payable2,2816812743,236
Total income tax expense (ITE)
Income tax expense relating to current year liability2,0597052513,015
Prior year adjustments to amounts provided(19)(1)233
Other(7)(2)7(2)
Total income tax expense as reported in financial statements
1,2
2,0337022813,016
Effective tax rate (ITE/PBT )33.68%27.78%32.41%31.98%
Statutory tax rate
4
30%/15%/0%28.00%various
VOLUNTARY TAX
TRANSPARENCY
1.
Includes discontinued operations
2.
Statutory legal view of the geographies, representing basis of local income tax return filings.
3.
Represents estimated tax offsets.
4.
Wealth Business (super/pension members) statutory tax rates at 15%/0%
86
ANZ 2018 SUSTAINABILITY REVIEW
EXPLANATORY
NOTES
TARGET TO FUND AND FACILITATE
$15 BILLION IN LOW CARBON
AND SUSTAINABLE SOLUTIONS
(THE $15 BILLION TARGET)
‘Low carbon and sustainable solutions’ is defined as the products and
services provided to our customers across the markets in which we
operate, to the extent they are related to the defined activities below.
The $15 billion target is reported as at 30 September 2018 and is
a five-year Group-wide target, from 2016 to 2020. It includes all
financing either funded or facilitated by ANZ through its products
and services, including, but not limited to, loans, guarantees and
bonds, markets products and advisory services.
Our approach to our low carbon and sustainable solutions target:
-draws on the Climate Bonds Initiative (CBI) criteria (available
at climatebonds.net/standards) and the expertise of our
internal specialist teams to guide which activities qualify for
inclusion. The CBI criteria is designed to be consistent with the
Intergovernmental Panel on Climate Change (IPCC) AR5 report
and is intended for broad guidance only;
-takes into account the nature of a customer’s business such
that where only part of a customer’s operations or activities
met the criteria, we will determine what proportion of general
purposes financing provided to that customer is included.
(General purposes financing is financing provided for application
to a customer’s general expenditure requirements and not
specifically identified projects for example, capital or operational
expenditure); and
-includes conducting an annual review of activities and
methodologies used to guide activities that qualify for the
$15 billion target. This may result in the inclusion of new activities
and any material changes will be transparently disclosed.
Changes in methodology will not be applied retrospectively.
The $15 billion target activities specifically include, but are
not limited to:
-energy efficiency;
-low emissions transport, transport infrastructure
-green buildings — demonstrating 4.5 star National Australian
Built Environment Rating System (‘NABERS’) equivalent and 4 star
NABERS rating for retrofits with minimum 2 star upgrade;
-reforestation, sustainable forestry and agricultural practices;
-renewable energy, battery storage;
-pollution reduction and waste management;
-emerging technologies (e.g. carbon capture and storage);
-climate change adaptation measures; and
-water recycling, procurement, treatment and efficiency.
The target includes products and services (including refinancing)
that have been provided since 1 October 2015 above a threshold
of $1 million.
FINANCED EMISSIONS
Reported figures do not include generation under construction.
Australian financed emissions is calculated using generation and
emissions data from four sources:
1. Australian Energy Market Operator (AEMO) for scheduled
generators connected to the National Electricity Market
(NEM) grid and the South West Interconnected System
in Western Australia;
2. the register of large-scale generation certificates (LGC’s) for
non-scheduled renewable energy assets connected to the NEM;
3. 2016–17 National Greenhouse and Energy Reporting (NGER)
data for designated generation facilities (available from
Australian Clean Energy Regulator website); and
4. estimates by ANZ for remaining generators where there
was no data available from the first three sources.
Overall, AEMO, LGC and NGER data was available for more than
97% of electricity generation from projects financed by us in
2018. The proportion of generation attributable to ANZ finance
was based on the ratio of our Class 1 Debt Limits to Total
Syndicate Debt.
Financed emissions outside Australia is calculated using
generation and emissions data from three sources:
1. New Zealand Electricity Authority for New Zealand
generation assets;
2. Carbon Monitoring for Action database maintained
by the Centre for Global Development; and
3. estimates by ANZ for remaining generators where there
was no data available from the first two sources or where
there was doubt over the accuracy from the first two sources.
The proportion of generation attributable to ANZ finance was based
on the ratio of our Class 1 Debt Limits to Total Syndicate Debt.
87
2018 SUSTAINABILITY PERFORMANCE SUMMARY
TARGET TO HELP ENABLE SOCIAL AND
ECONOMIC PARTICIPATION OF 1 MILLION
PEOPLE BY 2020 (THE TARGET)
‘Help enable social and economic participation’ is defined as
assisting customers, employees and our community to take part
in society and build a better life via our:
-financial wellbeing initiatives;
-employment, training and development initiatives;
-community programs and initiatives; and
-targeted banking products and services for small businesses and
retail customers across the markets in which we operate, to the
extent that they are related to the defined activities below.
The target is reported as at 30 September 2018 and is a four-year
Group-wide target from 2017 to 2020. Our approach:
-draws on the London Benchmarking Group methodology, a
global standard for reporting community investment (available
at https://corporate-citizenship.com/our-insights/lbg-
guidance-manual/);
-includes individuals who have participated in more than one
program or product (for example, people who have participated
in MoneyMinded as part of Saver Plus are counted twice as
they are included in both the MoneyMinded and Saver Plus
program totals);
-businesses that have benefited are counted as one ‘person’; and
-includes an annual review of programs and initiatives and may
result in the inclusion of new programs. Any material change
will be disclosed. Changes will not be applied retrospectively.
The target activities specifically include, but are not limited to:
-delivery of MoneyMinded and Saver Plus;
-employment and training opportunities for under-represented
groups (including but not limited to: Aboriginal and Torres Strait
Islanders, people with disability, refugees, interns);
-provision of development programs to support start-ups
and entrepreneurs;
-provision of formal community programs including workplace
giving, mentoring opportunities and community grants;
-provision of fee-free accounts and services to targeted groups
including international students, migrant banking (NZ), new
businesses less than two years old (NZ), farmer start-up accounts
(NZ) and superannuation advice for women;
-provision of access to goMoney™ mobile phone banking in rural
and remote Pacific communities;
-supporting small businesses to grow through targeted products
including ANZ Employment Hero and Business Growth
programs; and
-provision of medium to long-term disaster relief grants.
88
ANZ 2018 SUSTAINABILITY REVIEW
Conclusion: Based on the evidence
we obtained from the procedures
performed, we are not aware of any
material misstatements in the ANZ 2018
Sustainability Review, which has been
prepared by ANZ Banking Group Limited
in accordance with the GRI Standards
for the year ended 30 September 2018.
WHAT DID KPMG’S WORK
INVOLVE — SCOPE OF WORK
ANZ Banking Group Limited (ANZ) engaged KPMG to perform
a limited assurance engagement in relation to the ANZ 2018
Sustainability Review. The ANZ 2018 Sustainability Review covers
ANZ’s global operations for the year ended 30 September 2018
unless otherwise indicated. KPMG’s scope of work included limited
assurance over all material text and data claims.
WHAT WAS THE REPORTING
CRITERIA USED?
The ANZ 2018 Sustainability Review was prepared in accordance
to the GRI Standards published by the Global Reporting Initiative
(GRI) (“the criteria”).
WHAT WAS THE BASIS
FOR KPMG’S CONCLUSION?
We conducted our work in accordance with International Standard
on Assurance Engagements ISAE 3000 (Standard). In accordance
with the Standard we have:
-used our professional judgement to plan and perform the
engagement to obtain limited assurance that we are not aware
of any material misstatements in the ANZ 2018 Sustainability
Review, whether due to fraud or error;
-considered relevant internal controls when designing our
assurance procedures, however we do not express a conclusion
on their effectiveness; and
-ensured that the engagement team possess the appropriate
knowledge, skills and professional competencies.
WHAT DID KPMG DO TO SUPPORT THE
SCOPE OF WORK — OUR PROCEDURES
Our limited assurance conclusion is based on the evidence
obtained from performing the following procedures:
-enquiries of relevant management to understand ANZ’s
process for determining material sustainability issues;
-interviews with relevant management concerning ANZ’s
sustainability framework and policies for material sustainability
issues, and the implementation of these across the business;
-interviews with relevant staff responsible for developing the
content (text and data) within the ANZ 2018 Sustainability
Review to understand the approach for management,
monitoring, collation and reporting of such information and
the accuracy, completeness and existence of reported text
and data within the ANZ 2018 Sustainability Review;
-comparing text and data (on a sample basis) presented to
underlying sources. This included considering whether all
material matters had been included or excluded;
-reading the ANZ 2018 Sustainability Review (in its entirety)
to ensure it is consistent with KPMG’s overall knowledge of,
and experience with, the sustainability performance of ANZ;
-an assessment of information reported was in accordance
with the GRI Standards Comprehensive level of disclosures; and
-reviewing the accuracy of statements in relation to the
Financial Stability Board’s Task Force on Climate-related
Financial Disclosures.
CONSIDERATION OF OTHER
SUSTAINABILITY RELATED
INFORMATION
Other sustainability related information includes information
contained in the ANZ 2018 Corporate Governance Statement,
Annual Review and Annual Report for the year ended 30 September
2018. Our responsibility is to read the other sustainability
related information to check for consistency with the ANZ 2018
Sustainability Review and our knowledge obtained through
our assurance engagement. We do not express an assurance
conclusion over the other sustainability information.
INDEPENDENT LIMITED ASSURANCE
REPORT TO THE DIRECTORS OF
ANZ BANKING GROUP LIMITED
89
KPMG LIMITED ASSURANCE REPORT
WHAT IS LIMITED ASSURANCE
AND MATERIAL MISSTATEMENT?
The procedures performed in a limited assurance engagement
vary in nature and timing from, and are less in extent than for
a reasonable assurance engagement. Consequently the level
of assurance obtained in a limited assurance engagement is
substantially lower than the assurance that would have been
obtained had a reasonable assurance engagement been performed.
The Standard requires our report to be worded around what we
have not found, rather than what we have found.
Misstatements, including omissions, are considered material
if, individually or in the aggregate, they could reasonably be
expected to influence relevant decisions of the Directors of ANZ.
USE OF THIS ASSURANCE REPORT
This report has been prepared for the Directors of ANZ for the
purpose of providing an assurance conclusion on the ANZ 2018
Sustainability Review and may not be suitable for another purpose.
We disclaim any assumption of responsibility for any reliance on
this report, to any person other than the Directors of ANZ, or for
any other purpose than that for which it was prepared.
ANZ IS RESPONSIBLE FOR:
-determining that the criteria is appropriate to meet their needs;
-preparing and presenting the ANZ 2018 Sustainability Review
and other sustainability related information in accordance with
the criteria; and
-establishing internal controls that enable the preparation and
presentation of the ANZ 2018 Sustainability Review that is free
from material misstatement, whether due to fraud or error.
KPMG IS RESPONSIBLE FOR:
-Our responsibility is to perform a limited assurance engagement
in relation to the ANZ 2018 Sustainability Review for the year
ended 30 September 2018, and to issue an assurance report
that includes our conclusion.
KPMG INDEPENDENCE
AND QUALITY CONTROL
We have complied with our independence and other relevant
ethical requirements of the Code of Ethics for Professional
Accountants issued by the Australian Professional and Ethical
Standards Board, and complied with the applicable requirements
of Australian Standard on Quality Control 1 to maintain a
comprehensive system of quality control. We have also complied
with ANZ’s Stakeholder Engagement Model for Relationship with
External Auditor (available on anz.com).
KPMG
Melbourne
17 December 2018
90
ANZ 2018 SUSTAINABILITY REVIEW
OUR INTERNATIONAL PRESENCE
Australia
New Zealand
International
Asia
Cambodia, China, Hong Kong, India, Indonesia,
Japan, Laos, Malaysia, Myanmar, the Philippines,
Singapore, South Korea, Taiwan, Thailand, Vietnam
Europe
France, Germany, United Kingdom
Pacific
American Samoa, Cook Islands, Fiji, Guam, Kiribati,
New Caledonia, Papua New Guinea, Samoa,
Solomon Islands, Timor-Leste, Tonga, Vanuatu
Middle East U.A.E. (Dubai)
United States of America
DISCLOSURE INSIGHT ACTION
anz.com/cs
Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522.
ANZ’s colour blue is a trade mark of ANZ.
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.