ANZ 2021 Climate-related Financial Disclosures

Australia and New Zealand Banking Group Limited ABN 11 005 357 522
ANZ Centre Melbourne, Level 9A, 833 Collins Street, Docklands VIC 3008
26 November 2021
Market Announcements Office
ASX Limited
Level 4
20 Bridge Street
SYDNEY NSW 2000
ANZ 2021 Climate-related Financial Disclosures
Australia and New Zealand Banking Group Limited (ANZ) today released its 2021 Climate
-related Financial Disclosures.
It has been approved for distribution by ANZ’s Ethics, Environment, Social & Governance
Committee.
Yours faithfully
Simon Pordage
Company Secretary
Australia and New Zealand Banking Group Limited

2021 / CLIMATE-RELATED
FINANCIAL DISCLOSURES
Approved for distribution by A N Z’s Ethics, Environment, Social & Governance Committee.
26 November 2021

CONTENTS
Our approach to climate change 1
Summary of our progress
in aligning with the TCFD 3
Governance5
Strategy5
Risk management 9
Engaging with our customers
on their transition plans 10
Metrics and targets 11
Explanatory notes 16
KPMG Assurance opinion 18
Our approach to climate change
We support the Paris Agreement’s goal of transitioning to net zero emissions
by 2050 and are committed to playing our part.
We want to be the leading Australia – and New Zealand – based
bank in supporting customers’ transition to net zero emissions by
2050. We have increased our ambition to help achieve that goal
through a series of commitments and measures set out in our
updated Climate Change Commitment (available on anz.com).
Our environmental sustainability strategy identifies priority sectors,
technologies and financing opportunities to help achieve our ambition.
ANZ has also joined the Net-Zero Banking Alliance (NZBA) reflecting
our commitment with other leading banks globally to enable the
transition by aligning our lending portfolio with net zero emissions.
Reducing carbon emissions is a shared societal responsibility and
requires a ‘whole-of-economy’ approach.
We are focused on four key areas:
1
supporting our customers and industries to transition
2
aligning our lending decisions to the
Paris Agreement goals
3
reducing our impact by managing and
reducing emissions from our operations
4
engaging constructively and transparently
with stakeholders.
1.SUPPORTING OUR CUSTOMERS AND INDUSTRIES
TO TRANSITION
The most important role we can play in enabling the transition to net
zero is to support our customers to reduce emissions and enhance
their resilience to a changing climate.
1
We will achieve this by:
•executing our environmental sustainability strategy and providing
finance, services and advice that support customers' shift to low
carbon business models and operations that put them on a path
to net zero emissions.
•encouraging and supporting 100 of our largest emitting business
customers to implement and, where appropriate, strengthen their
low carbon transition plans and enhance their efforts to protect
biodiversity, by end 2024. This work will be undertaken through a
structured and ongoing engagement process.
•funding and facilitating
at least $50 billion by 2025 to help our
customers lower their ca
rbon emissions.
2
This may include increased
energy efficiency, low emis
sions transport, green buildings,
reforestation, Indigenous land management practices, renewable
energy and battery storage, emerging technologies (such as carbon
capture and storage, and hydrogen-based technology), disaster
resilience and climate change adaptation measures.
–We
will allocate $1 billion of this towards supporting customers'
and communities’ disaster recovery and resilience. We will do this
by allocating capital to fund or facilitate resilience initiatives for
w
eather-related events, or to build resilience against non-weather
related disasters.
•equipping our employees with a deeper understanding
of climate risks and opportunities, including the potential of
emerging technologies, focussing on our Institutional bankers
in key customer segments.
This report has been prepared in accordance with the Financial Stability
Board Task Force on Climate-related Financial Disclosures (TCFD) framework.
It covers all ANZ operations worldwide over which, unless otherwise stated,
we have control for the financial year commencing on 1 October 2020
and ending 30 September 2021. Monetary amounts in this document are
reported in Australian dollars, unless otherwise stated.
KPMG has performed limited assurance over the disclosures in this report.
A copy of KPMG’s limited assurance report is on page 18.
1. For further information on how we are supporting our customers to transition see our
2021 ESG Supplement (pages 27-28) and 2021 Annual Report (pages 19-21; 38) available at
anz.com/annualreport. 2. Our $50 billion target is directed towards sustainable solutions
for our customers, including initiatives that help improve environmental sustainability,
increase access to affordable housing and promote financial wellbeing. The majority of
the target is directed towards environmental sustainability initiatives that help customers
to lower their emissions. Explanatory notes relating to our $50 billion sustainable finance
target are on page 80 of our 2021 ESG Supplement available at anz.com/annualreport.
1
ANZ 2021 Climate-related Financial Disclosures

2. ALIGNING OUR LENDING DECISIONS TO
THE PARIS AGREEMENT GOALS
Our success in supporting and accelerating a net zero transition will
be driven by our ability to help our customers reduce their emissions.
To reduce our portfolio emissions, we commit to aligning our lending
with the Paris goals by:
•developing metrics and targets for our lending to key sectors,
starting with our power generation portfolio and large-scale
commercial buildings. We will progressively expand our coverage
of key sectors, in line with our NZBA commitment and the
evolution of globally recognised standards and methodologies,
noting there is no single method that covers all relevant sectors
and asset classes.
•factoring climate change risk into our lending for large business
customers, primarily by assessing their capacity to respond to
climate change and the evolving regulatory landscape.
•expecting new business customers or projects in the energy sector
to disclose Paris-aligned business plans.
3
This includes the extent
to which their company strategy, emissions reduction targets and
planned capital expenditure is aligned with the Paris goals.
•expecting our existing business customers in higher-emitting
sectors, such as energy and transport, to integrate climate change
risk into their company strategies. Specifically, by 2025 we expect
our energy customers to:
–establish specific, time bound, public transition plans and
diversification strategies
–report transparently on climate risks and opportunities – outlining
how their business will be resilient in a range of climate scenarios,
including scenarios aligned with the Paris goals – preferably using
the TCFD framework
–participate in industry initiatives that will contribute to reducing
emissions, for example, in the oil and gas sector, capturing and
storing methane in line with the Methane Guiding Principles
–measure and disclose the Scope 3 emissions from use of their
products and any progress in reducing those emissions
–measure and disclose their progress in reducing emissions in
their value chains – for example, by reducing emissions from
shipping and distribution.
3. REDUCING OUR IMPACT BY MANAGING AND
REDUCING EMISSIONS FROM OUR OPERATIONS
We are committed to reducing our operations' Scope 1, 2 and 3
emissions to manage our climate impact and are:
•accelerating the reduction of our own emissions by sourcing
100% of the electricity needed for our business operations from
renewables by 2025.
•lowering our Scope 1 and 2 greenhouse gas emissions by
24% by 2025 and 35% by 2030 (against a 2015 baseline).
•seeking to empower our employees to live and work more
sustainably by providing access to relevant information
and incentives.
4. ENGAGING CONSTRUCTIVELY AND
TRANSPARENTLY WITH STAKEHOLDERS
We recognise it is vital to work collaboratively with our stakeholders
to help support the transition to net zero emissions and are therefore:
•continuing to engage with 100 of our largest emitting business
customers to support them to improve their low carbon
transition plans.
•engaging with stakeholders on climate change and increasing
our transparency on our approach through ESG market briefings,
investor roundtables and other avenues.
•disclosing how we identify, assess and manage climate-related
financial risks and opportunities using the TCFD recommendations.
•disclosing metrics on the emissions impact of our financing, and
setting targets to reduce this impact, starting with commercial
property and power generation.
•developing an enhanced climate risk management framework
by end 2022 that strengthens our governance and is responsive
to climate-related risks and opportunities.
•participating in efforts to develop appropriate regulatory and
prudential frameworks, including working closely with the
Australian Prudential Regulation Authority (APRA) and participating
banks on its first climate vulnerability assessment.
•engaging, as appropriate, in public policy discussion on climate
change and increasing transparency on our approach. This
includes  disclosing the industry associations we are members
of and reviewing alignment on key relevant policy positions.
3. The energy sector includes integrated oil and gas companies involved in exploration, development and refining as well as low carbon energy solutions, thermal coal mining, and integrated
power utility companies such as renewable energy and coal.
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ANZ 2021 Climate-related Financial Disclosures

Summary of our progress in aligning with the TCFD
TCFD theme Our progress to date Focus areas – 2022/23 Beyond 2022 vision
Governance
•Board Risk Committee oversees management of
climate-related risks
•Board Ethics, Environment, Social and Governance
(EESG) Committee approves climate-related objectives,
policy and targets
•Ethics and Responsible Business Committee (executive
management) oversees our approach to environment,
social and governance (ESG) risks and opportunities,
and reviews climate-related risks
•Aligning with regulatory guidance on climate-related
risk governance, including stress-testing of selected
portfolios
•An enhanced risk management framework that
anticipates potential climate-related impacts, and
associated regulatory requirements
Strategy
•ANZ’s Climate Change Commitment (available on
anz.com) confirms support for the Paris Agreement
goals and transition to a net zero carbon economy
•Managing the net zero carbon transition focuses on
an orderly transition that recognises and responds to
social impacts
•Participated in APRA’s climate vulnerability assessment
(CVA) to assess portfolio transition and physical risks
•Low carbon products and services within our
Institutional business focused on climate-related
opportunities
•Analysis of flood-related risks for our home loan
portfolio in a major regional location of Australia and
associated test-pilot of socio-economic indicators
showing financial resilience of home loan customers
with respect to flood risk
•Extending analysis of flood-related risks to incorporate
bushfire and other risks relating to retail customers
through the CVA
•Including climate risk reference in lending guidance
documents for relevant industry sectors used by our
front line bankers
•ANZ business strategy to grow in a way that is more
closely aligned to a resilient and sustainable economy
that supports the Paris Agreement goals and
Sustainable Development Goals (SDGs)
This is the fifth year we have reported using the recommendations of the Financial
Stability Board Task Force on Climate-related Financial Disclosures (TCFD).
Our aim is to provide investors and other stakeholders with clear information, enabling them to assess the
adequacy of our approach to climate change and our ability to manage the associated risks and opportunities.
We acknowledge the TCFD has recently released updated guidance on implementation of the framework,
as well as guidance on metrics, targets and transition plans, which we will use to inform future disclosures.
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ANZ 2021 Climate-related Financial Disclosures

TCFD theme Our progress to date Focus areas – 2022/23 Beyond 2022 vision
Risk management
•Climate change risk added to Group and
Institutional Risk Appetite Statements
•Climate change identified as a Principal Risk and
Uncertainty in our UK Disclosure and Transparency
Rules (DTR) Submission
•Guidelines and training provided to over 1,000 of
our Institutional bankers on customers’ transition
plan discussions
•Enhanced financial analysis and stronger credit
approval terms applied to agricultural property
purchases in regions of low average rainfall or
measured variability
•New agribusiness customers assessed for financial
resilience and understanding of rainfall and climate
trends in their area, and water budgets considered
if irrigating
•Encouraging and supporting 100 of our largest
emitting business customers to implement and, where
appropriate, strengthen their low carbon transition
plans and enhance their efforts to protect biodiversity,
by end 2024
•Undertaking customer engagement to identify
customer or sector-specific transition or physical risks,
focused on corporate and Institutional customers
•Further developing an enhanced climate risk
management framework that strengthens our
governance and anticipates potential climate-related
impacts and associated regulatory requirements
•Further integrate assessment of climate-related risks
into our Group risk management framework
•Standard discussions with business customers include
climate-related risks and opportunities
•Assessment of customer transition plans part of
standard lending decisions and portfolio analysis
Metrics and targets
•Support 100 of our largest emitting business
customers to establish or strengthen low carbon
transition plans by 2021, with metrics developed to
track progress
•Metrics to enable our progress to be tracked in
reducing ‘financed emissions’, beginning with two
key sectors: large-scale commercial property and
power generation. Metrics are tailored to each sector
(e.g. carbon emissions per square metre of net lettable
space for commercial property) and disclosed every
12 months
•$50 billion target to fund and facilitate sustainable
solutions by 2025
•Target to procure 100% renewable electricity for
ANZ’s operations by 2025
•Ongoing emissions reduction targets for ANZ energy
use aligned with the Paris Agreement goals
•Completing transition plan engagement with high
emitting customers and consider how to integrate
into our regular customer assessments
•Establishing pathways and set targets to reduce
metrics for ‘financed emissions’ in key sectors by 2030
towards a long-term net zero goal by 2050
•Consider expanding new metrics for measuring impact
of our progress on environmental sustainability to
other key sectors
•Continue to evolve our reporting with leading practices
to measure the alignment of our lending with the Paris
Agreement goals
•Reduce ANZ’s operational emissions in line with the
decarbonisation trajectory of the Paris Agreement goals
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ANZ 2021 Climate-related Financial Disclosures

Governance
Our Board Ethics, Environment, Social
and Governance (EESG) Committee,
led by the Chairman, is responsible
for reviewing and approving our
climate-related objectives and
performance, including goals and
targets to support action on climate
change. The Board Risk Committee
has responsibility for the overview
of ANZ’s management of new and
emerging risks, including climate-
related risks.
At an executive level, the Ethics and Responsible Business
Committee (ERBC), led by the CEO, sets policy as detailed in
our Climate Change Commitment. The ERBC provides
leadership on our ESG risks and opportunities, monitoring
progress against targets, including those related to
climate change.
The ERBC is also responsible for:
•guiding which industry sectors, customers and transactions
we bank, to align with our purpose, strategy and values, and
our public statements on issues such as climate change
•assessing current and emerging ethical, social,
environmental and governance risks and opportunities.
Strategy
Our climate change strategy is
shaped by two guiding principles:
•
All sectors of the economy have a
role to play in driving the transition.
•
The transition needs to be orderly,
with all stakeholders giving careful
consideration to the impacts on
affected workers and communities.
We recognise that over the longer term (more than 5 years), material
risks are likely to emerge unless we take steps to manage the
potential impacts of climate change. We regularly review our business
strategy to ensure it is responsive to future risks and opportunities
associated with the transition to a net zero emissions economy.
Climate change creates risks and opportunities for business and
investment. Outlined below are the climate-related risks that have
the potential to impact ANZ’s financial performance:
TRANSITION RISKS
Policy risk: climate and energy policy uncertainty in Australia has
impacted the energy sector and renewable energy developments.
This uncertainty has impacted our lending and advice to the energy
sector and driven higher risk profiles for energy developments. The
combination of compressed returns and higher risk profiles has
meant that we have been selective in participating in green-field
renewable energy transactions. Future policy uncertainty or changes
may affect our capacity to finance customers’ projects that contribute
to emission reductions.
Market risk: market demand, supply and prices for renewable and
other forms of energy are subject to a number of influences and may
change unpredictably. Our climate change strategy and involvement
in the energy sector will need to take account of these dynamics and
manage risk appropriately.
Regulatory risk: prudential regulators across the developed world
are now moving to identify and potentially price carbon risk through
measures such as capital overlays on high carbon assets. This may
affect the amount of capital we are required to hold against loans
and may, in turn, lead to a decline in our future earnings. Increased
regulatory oversight will require financial institutions to dedicate
additional and ongoing resources to identify, assess, compare and
disclose climate risks and opportunities, leading to increased
operational costs.
Technology risk: new technologies may affect the economics of
supply of different forms of energy and impact ANZ customers in the
energy industry. For example, reduced demand for coal in electricity
generation in the future may impact the ability of our customers in
the thermal coal supply chain to meet their repayment obligations.
For ANZ, transition risks may manifest as credit losses, which can
occur when a customer becomes unable or unwilling to repay debt.
We seek to minimise the risk of losses, including by banking larger,
well-rated customers, working actively with those facing difficulties
and actively managing our exposure.
Reputational risk: we are being scrutinised by a range of
stakeholders regarding our role in financing industries with
environmental impacts, such as power generation, mining, forestry
and large infrastructure projects. Failure to apply appropriate
standards to our decisions and respond effectively to stakeholder
concerns about our involvement in particular transactions can result
in public criticism and activism, potentially damaging our brand and
reputation. Negative stakeholder perceptions may adversely affect
our business relationships and access to funding. It may also give rise
to credit, liquidity, market, compliance and operational risks affecting
earnings, liquidity and capital position.
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ANZ 2021 Climate-related Financial Disclosures

PHYSICAL RISKS
Acute physical risk: customers exposed to acute climate-related
events (including storms, cyclones, floods as well as fires) may
adversely affect our financial condition or collateral position in
relation to credit facilities extended to those customers. While any
single weather-related event or wildfire is unlikely on its own to result
in any material credit related impacts for the bank, the severity and
frequency of these events may increase in the future.
Chronic physical risk: farming and grazing in Australia and New
Zealand has traditionally been undertaken in regions with productive
soils and sufficient water. However, in recent years many of our
farming customers have had to alter their production and investment
profiles in response to climate change. Those that experience
substantially lower incomes in response to, for example, severe
drought, risk falling into arrears, presenting a potential credit risk
to the bank.
CLIMATE-RELATED OPPORTUNITIES
All sectors have a role to play in the transition to a net zero emissions
economy by 2050. ANZ will have an opportunity to assist customers
as they invest in new capabilities, technologies and assets, provide
lower emissions energy and power, or adapt to a less carbon intensive
economy. This is important because we will need to replace lost
revenue as a result of the policies we are applying to customers in
carbon-intensive industries.
ANZ is executing a bank-wide environmental sustainability strategy
in which we have identified 12 priority sectors, technologies and
solutions which collectively provide material commercial growth and
environmental transition opportunities. To successfully deliver this
strategy at scale we are:
•continuing to expand our financial products, services and solutions
to support investment in our environmental priority growth areas;
and
•building and strengthening core capabilities and enablers across
the bank including, for example, ESG culture and mindset, data,
insights and technology and risk.
Other key opportunities we have identified are outlined below.
Market opportunities: we are capitalising on opportunities to
advise our customers on and arrange sustainable finance solutions
such as green, social and sustainability (GSS) bonds and loans. These
facilities provide borrowers with access to the capital required to help
transition to a net zero emissions economy and adapt to the physical
impacts of a warming climate, as well as respond to social and
sustainability risks.
The sustainable finance market is driving incremental and
replacement revenues, and strengthening our relationships with
our borrower and investor client base who are seeking our expertise.
Increasing demand for these and other similar products is assisting
us to re-orientate our balance sheet away from sectors that are more
exposed to the transition and physical risks of climate change. Our
$50 billion sustainable finance target is helping to drive this change.
As at 30 September 2021 we have funded and facilitated $21.95
billion in sustainable solutions for our customers since 2019.
During 2021 we participated in 81 sustainable finance deals with
a total deal value of $119 billion, compared to 39 deals with a total
deal value of $59 billion in 2020. Of the 81 deals we participated in,
$5.7 billion was attributed to ANZ via our distribution capability,
and $4.8 billion via our lending capacity.
ANZ is also a sustainable finance market participant, having issued
a total of four GSS bonds since mid-2015 as part of Group Treasury’s
annual funding and capital program. Our inaugural 2015 Green
Bond matured in June 2020. In addition, we currently have three
Sustainable Development Goal (SDG) bonds on issue, totalling
equivalent to around $4 billion. The proceeds of these bonds are
financing a portfolio of customer loans aligned to several SDGs
including those aligned to environmental impacts such as ‘SDG 13 –
Climate Action’, and ‘SDG 7 – Affordable and Clean Energy’.
Low emission goods and services: demand is increasing for ESG/
green credit lines from customers seeking to manage the transition
to a net zero carbon economy. Product offerings include green loans,
sustainability linked loans, and lending into, for example, green
buildings. We have set targets to fund and facilitate billions of dollars
in environmentally sustainable solutions for our customers such as
low carbon buildings, low emissions transport, green bonds and
renewable energy.
Use of lower-emissions sources of energy: we joined the RE100
initiative in 2019, which commits us to 100% renewable electricity by
2025 across our operations. We will achieve this target through solar
installations, solar leasing and power purchase agreements (PPA) and
purchasing renewable energy certificates (International Renewable
Energy Certificate (I-RECs), New Zealand Energy Certificate System
(NZECs) etc) in countries where solar and PPAs are not appropriate.
In 2021, our operations were powered by 36% renewable energy,
avoiding approximately 38,400 tonnes of greenhouse gas emissions.
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ANZ 2021 Climate-related Financial Disclosures

FINANCIAL IMPACTS ON ANZ
Operating costs and revenues: managing and supporting the effort
to transition to a net zero carbon economy may affect ANZ revenues
and costs. As our customers set ambitious emissions reduction
targets and other sustainability goals, we expect to see continued
strong demand for climate-related financing solutions in the form
of GSS bonds and other green/ESG credit lines. This will represent
a growing source of revenue for the bank.
Revenue growth from increased sustainable financing activity has
been offset by reduced revenue from customers with operations in
carbon-intensive sectors, in particular the thermal coal supply chain.
This has largely occurred due to the introduction of policy positions
on thermal coal mining, transport and power generation since 2015.
Increasing oversight by prudential regulators will also require
additional resources enabling us to identify, manage and disclose
climate risks and opportunities.
Capital allocation: in recent years we have been increasingly
financing companies that contribute to reducing emissions and are
resilient to a changing climate, and less from high-emitting sectors
such as coal-fired electricity generation. Although the thermal coal
value chain represents a relatively small component of our overall
loan book, when considered in isolation, the impacts of this capital
shift are pronounced. In the last six years, we have reduced our
lending to thermal coal mining by around 75% and have not directly
financed any new or expanded coal-fired power stations. At the same
time, we have increased our direct lending to renewables by around
55%, with renewable energy projects dominating our project finance
power generation lending.
We are committed to further reducing the carbon intensity of our
electricity generation lending portfolio by only directly financing
renewables and low carbon gas projects by 2030. We will also no
longer bank any new business customers that have material thermal
coal exposures, i.e. more than 10% of their revenue, installed capacity
or actual generation from thermal coal.
APPROACH TO KEY SECTORS
Our strategy is designed to deliver sustainable returns for our
shareholders, while achieving a balance between growth and return,
short and long-term performance and social and environmental
impacts. The management of climate-related risks and opportunities
is a key part of achieving this balance and our business needs to be
resilient under a range of different climate-related scenarios.
Thermal coal value chain: various low-carbon scenarios, including
those published by the International Energy Agency (IEA), show that
the achievement of the Paris Agreement goals will require significant
reduction in primary demand for thermal coal over the coming
decades, especially in electricity generation.
To help us understand the potential impact of reduced demand,
we are engaging with customers with significant operations across
the thermal coal supply chain including extraction, transportation,
ports and generation.
We seek information from our customers about how their business
strategies may be impacted by the transition and physical risks of
climate change. This is undertaken for all existing and new customers
in the thermal coal value chain and updated at each annual customer
review. It includes an assessment of their resilience to two climate
scenarios published by the IEA – the Stated Policies Scenario and the
Sustainable Development Scenario that is aligned with the ‘well
below 2 degrees’ objective of the Paris Agreement, in addition to
other SDGs. These scenarios have played an influential role in shaping
our policy positions – particularly in regards to the thermal coal
value chain.
The engagement is driving improved conversations with our
customers about climate change risks, allowing us to make more
informed lending decisions and policies. Over time we expect more
of our customers to report on their transition plans. We also intend for
discussions on climate-related risks and opportunities to become part
of regular discussions with all Institutional and corporate customers.
Retail mortgages: despite their severity and widespread
geographical impact, the 2019-20 bushfires on Australia’s east coast
did not result in any material credit related impacts in our retail
mortgages portfolio. While many homes were unfortunately lost
in the fires, most customers were protected by an insurance policy
(in accordance with their mortgage contract) resulting in minimal
losses to the bank.
We are continuing to develop scenarios estimating the potential
financial impact of extreme weather events in the future. In coming
years, we will seek to identify geographic areas that are most exposed
to acute physical risks of climate change and overlay this information
with socio-economic characteristics of households that could indicate
a higher incidence of either a lack of insurance, or under insurance.
Agricultural sector: we have worked with the United Nations
Environment Programme for Financial Institutions (UNEP FI) on a pilot
scenario analysis project. We stress tested our agricultural portfolio for
physical risk under two warming scenarios and the results were in line
with our expectations – that customers with weaker credit profiles
would experience more significant impacts in a warming climate.
This work is summarised in the UNEP FI report, ‘Navigating a New
Climate: Assessing Credit Risk and Opportunity in a Changing Climate’
and has been updated by a further group of banks that builds on our
initial work.
The findings of this scenario testing were borne out during 2018 and
2019 with New South Wales and Queensland enduring one of the
worst droughts in recorded history, as well as the 2019-20 bushfires
(which also impacted parts of Victoria). A large number of customers
were affected by this severe drought and the bushfires. However,
customer defaults were minimal and, to date, the bank has
experienced a low level of loss.
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ANZ 2021 Climate-related Financial Disclosures

FIGURE 1
Rainfall annual
30-year average
(1 986–2015)
PERTH
DARWIN
BRISBANE
SYDNEY
HOBART
MELBOURNE
CANBERRA
3000
Projection: Lambert conformal
with standard parallels 10°S, 40°S
© Commonwealth of Australia, 2017
Data sourced from the Bureau of Meteorology
Millimeters
2000
1500
1000
600
400
300
200
100
50
0
ADELAIDE
Geraldton
Carnarvon
Port Hedland
Broome
Kalumburu
Weipa
Kowanyama
Cairns
Townsville
Mackay
Rockhampton
Cos Harbour
Orbost
Warnambool
Cape Grim
Strahan
Dubbo
Bourke
Marree
Oodnadatta
Cook
Wiluna
Halls Creek
Normanton
Mount Isa
Tennant
Creek
Longreach
Charleville
Birdsville
Mildura
Newman
Telfer
Alice Springs
St. Helens
Port Lincoln
Ceduna
Esperance
Kalgoolie-
Boulder
Albany
Katherine
Horsham
Port Augusta
Giles
This positive outcome for customers and the bank arises in part
because our agricultural lending is well secured with an average
loan-to-value ratio of less than 60% and in the case of the bushfires,
customer losses were insured.
With the combined insights of previous experience and stress-testing
of possible future warming scenarios, we undertake a number of
steps to ensure the resilience of our agricultural loan book to the
physical risks of climate change:
Engaging annually with the Australian Bureau of Meteorology
(BoM): for the past seven years we have engaged with the BoM to
ensure we have current information to determine the medium term
weather outlook. We examine variability in average annual rainfall in
recent decades to see how climate change may affect the suitability
and volatility of farming in given regions (see Figure 1 for an
illustrative rainfall variation map for Australia). This informs customer
discussions on how they are responding, possibly by changing their
farming practices, including investing in technology and crop/stock
sciences, and how they are structuring their finances to ensure
ongoing viability.
Testing of customer’s financial resilience to climatic events: when
customers purchase properties in areas identified as having low
rainfall or more likely to experience rainfall variation, we test their
financial resilience to climatic events like drought and rainfall
variation. Customers with lower resilience may be subject to
enhanced underwriting standards – for example, loan approval may
be dependent on a lower loan to valuation ratio, higher repayments,
or evidence of savings or equity. Our bankers also need to document
the customer’s knowledge of recent rainfall and climate trends where
their farm is located.
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ANZ 2021 Climate-related Financial Disclosures

Risk management
We have disclosed our most material
economic, social and environmental
risks in our 2021 Annual Report (available
on anz.com/annualreport) in accordance
with the ASX Corporate Governance
Council’s ‘Corporate Governance
Principles and Recommendations –
4th edition’. Our most material climate-
related 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 considers
the impact to customer revenue and changes to the cost and level
of insurance cover available to customers.
We include climate change as one of our Principal Risks and
Uncertainties (available on anz.com/annualreport). Climate change
risk is included in the Group and Institutional Risk Appetite Statements
to ensure the risk is appropriately identified and assessed. New
technologies and markets required for the transition to net zero
emissions may require a change to risk appetite and accordingly we
will refine our Risk Appetite Statements, or equivalent documents,
across the Group as appropriate.
We continue to develop an organisational culture that encourages
regular discussion and consideration of emerging climate-related
risks. Our Risk team is working with our bankers, to seek an ongoing
engagement with customers about managing the risks and
opportunities associated with climate change, assisting us to progress
our engagement with our largest emitting business customers on
their transition plans.
Over the past year we have been developing an enhanced climate
risk management framework that strengthens our governance and
is responsive to climate change.
We have established a Climate Advisory and Coordination Forum,
chaired by Mark Whelan, Group Executive Institutional, and including
our Chief Risk Officer and other executives. The forum shapes the
future direction of climate policy, disclosures and related matters
across the Group.
Subject matter experts are overseeing the development of the
climate risk management framework, across five working groups
focused on regulatory monitoring, policy governance, risk appetite,
the Australian Prudential Regulatory Authority’s (APRA) Climate
Vulnerability Assessment (CVA) and analytics.
Our priority this year has been to ensure we are compliant with
current regulation. We have change management processes in
place to ensure we can comply with new regulatory obligations
when they come into effect in the jurisdictions in which we operate.
In some jurisdictions, climate-related risks are being integrated
into micro prudential supervision of banks and insurance firms,
including via requirements for firms’ stress testing and disclosure.
Some authorities report having set out – or being in the process
of setting out – their expectations as to firms’ disclosure of climate-
related risks. In some cases, such expectations explicitly refer to
the recommendations of the TCFD.
Regulators in our home markets of Australia and New Zealand have
flagged closer supervision on climate risk. APRA commenced its CVA
this year. In New Zealand, the government has introduced legislation
that would make climate risk reporting mandatory for banks, asset
managers and insurers by 2023, based on the TCFD framework.
We continue to measure the carbon intensity of industry exposures
within our portfolio and are investigating opportunities to enhance
our ESG data collection and analytical capabilities. Improved data and
insights will allow us to define a Group-wide strategy that will inform
appetite settings, enabling us to develop scenarios to stress test
particular portfolios.
PARTICIPATING IN APRA’S 2021
CLIMATE VULNERABILITY ASSESSMENT
We are participating in APRA’s Climate
Vulnerability Assessment (CVA), which
examines the material exposures and financial
risks that banks, the financial system and
economy may face due to climate risks.
The three key objectives of the CVA are: to assess potential
financial exposure to climate risk; to understand how banks
may adjust business models and implement management
actions in response to different scenarios; and to foster
improvement in climate risk management capabilities. APRA’s
CVA comprises two stress tests, a qualitative counterparty
assessment and data assessment.
APRA intends to disclose the outcomes of the CVA in 2022,
which may also be used to inform future supervisory
guidance. In this regard, APRA has already released draft
prudential guidance to assist supervised entities to identify,
monitor and manage the climate-related risks they are
exposed to, which they expect to finalise by the end of 2021.
The prudential practice guide has been informed by
stakeholder consultation and provides guidance on prudent
practice in the management of financial risks arising from
climate change, including with respect to governance, risk
management, scenario analysis and disclosure.
9
ANZ 2021 Climate-related Financial Disclosures

Engaging with our customers on their transition plans
Since 2019, we have engaged with
100 of our largest emitting business
customers, supporting them to establish
and, where appropriate, strengthen
existing transition plans.
Customers have valued our engagement on this topic, and our
perspectives. A number of customers outside of the 100 have sought
to engage with us, seeking clarity on our expectations or requesting
suggestions to improve their approach.
While our original target was aimed at supporting customers (where
applicable) to establish their plans, we recognise that amongst the
group of 100 there are now few at that stage – rather, they are at
various stages of implementation even if they have not disclosed
their plans publicly. Our focus now is on supporting our customers’
efforts to implement or, where a plan is less developed, strengthen
their transition plans.
To equip our staff with the skills and knowledge to undertake
these customer engagements, we have provided training to over
1,000 frontline bankers in our Institutional and corporate businesses
since 2019.
The training covers how climate-related risks and opportunities might
manifest for our customers and what elements we would expect to
see in a robust transition plan. Our Risk, Group and Institutional ESG
specialists assisted with the training, also attending team meetings
and customer discussions about low carbon transition plans and the
TCFD framework.
We consider three key elements constitute a robust low carbon
transition plan:
•governance
•targets/long-term plans; and
•disclosures that are preferably TCFD-aligned.
Transition plans vary depending on the sector. Some sector-specific
measures we expect are:
•energy customers seeking to diversify energy sources towards
less carbon-intensive fuels and outlining their plans by 2025. If
diversification is not feasible, we expect they will identify how
their business is resilient under ‘Paris-aligned’ scenarios in which
demand for their commodities declines more rapidly than a
‘business as usual’ scenario;
•transportation customers moving towards more fuel-efficient
vehicle fleets or undertaking other steps, such as switching from
road to rail transport that will reduce their carbon emissions; and
•property developers or retailers reducing building energy
consumption and refrigerant-based emissions using best available,
commercially viable technologies.
Our engagement with energy customers is well-progressed. While
we initially focused on customers with thermal coal operations,
we have broadened this to include major upstream oil and gas
producing customers. While the impacts of COVID-19 have affected
short-term demand, some customers are continuing to see strong
demand for high-quality, low-cost Australian thermal coal for use
in high efficiency, lower emissions (HELE) plants across Asia. Their
strategy is focused on developing high quality thermal coal assets
and they are committed to improving their external disclosures.
Other customers have undertaken scenario analysis (aligned with
TCFD recommendations), revealing that some of their commodities
will not perform well under a low carbon transition. In response, they
are limiting expenditure on thermal coal (with most capital directed
to maintenance rather than expansion), or seeking to divest those
assets. Some companies are starting to set firmer targets to work with
their suppliers and customers in their ‘value chain’ to seek to reduce
the emissions associated with the use of their mining commodities,
i.e. Scope 3 emissions.
Of the 100 customers we have engaged with over the last three years,
the diagram to the right shows how many we have assessed as
having met each of the three transition plan elements.
Customers
CUSTOMER TRANSITION PLAN STATUS
88
3
76
1
51
70
80
90
100
GovernanceTargets/long-term
plans
Disclosures
TCFD-aligned
60
50
40
30
20
10
0
PlannedYe sCustomers engaged
Following our initial engagement, customer transition plans were
grouped this year into four levels of maturity – advanced, developing/
intermediate, underdeveloped/starting out, and no public plans.
Overall, customers have improved their governance, strategies and
targets or disclosures. Many customers have clearly demonstrated
their intention to develop ‘Paris aligned’ or ‘science-based’ targets, and
a similar interest in engaging with ANZ on this topic. We will continue
to work with these customers and expect them to make substantive
progress towards their targets. While we consider this to be good
progress, we understand there is still much to be done. That is why
we have committed to continue supporting these larger emitting
customers to implement and, where appropriate, strengthen their
low carbon transition plans and enhance their efforts to protect
biodiversity, by the end of 2024.
10
ANZ 2021 Climate-related Financial Disclosures

Metrics and targets
TCFD-RELATED METRICS AND INDUSTRY EXPOSURES
For the fourth consecutive year we have disclosed credit metrics and
our exposure 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
forest products. This is in response to the TCFD recommendations
that ‘banks should describe significant concentrations of credit
exposure to carbon related assets’4 and provide a breakdown of
this data by industry, geography, credit quality and average tenor.
Our overall exposure to these four sectors is around 16% of the
Group exposure at default (EAD), down from 19% in FY20. In terms
of credit metrics, we have observed an increase in the percentage
of exposures rated as investment grade with 52% of our exposures
across the four sectors achieving this benchmark in FY21 compared
to 49.9% in FY20. The increase in the proportion of our loans rated
investment grade has been matched by a corresponding decrease
in the proportion of loans rated as non-performing with 0.3% of our
exposures across the four sectors falling into this category, down
from 0.5% in FY20. The decrease in the percentage of non-performing
loans is partly attributable to the agriculture sector, which had a
strong year due to commodity prices despite the impacts of the
COVID-19 pandemic. The consistently low levels of non-performing
loans across the four sectors identified by the TCFD, indicates that
transition and physical risks of climate change have not yet
manifested as material credit risks for ANZ. The average loan term
is relatively short for the majority of our exposures – 92% of total
loans to customers in the four sectors are due for repayment in
less than five years.
ANZ acknowledges stakeholder interest in banks’
exposure to the transition risks faced by some
customers in the energy sector, including the
potential risk of ‘stranded assets’ in the transition
to a net zero economy.
For ANZ, transition risks may manifest as credit losses which can
occur when a customer becomes unable or unwilling to repay debt.
Our total exposure to the energy sector at the end of FY21 was
$27.9 billion – which is 2.6% of the Group EAD. With over 85% of
these exposures rated as investment grade, and a consistently low
proportion of non-performing loans, this reflects our strategy to bank
larger, well-rated clients that are adapting their business strategies to
pursue opportunities available in the long-term decarbonisation of
the energy sector.
Also disclosed is a more detailed industry and sub-industry
breakdown of our exposures to the four sectors identified by
the TCFD (see following page).
Our exposure to the most carbon-intensive forms of energy
generation has declined since 2015. This decline is largely an
outcome of active portfolio management, informed by our credit
strategies. Our Risk Appetite Statements reference our Climate
Change Commitment and relevant industry standards. They reflect
risks associated with climate change, influencing decisions about
business strategy and capital allocation.
Industry groups and credit quality summary5,6
Exposure at Default ($bn)Non-performing loans (% of sector EAD) Investment grade (% of sector EAD)
Group FY21 FY20 FY19 FY21
FY20 FY19 FY21 FY20 FY19
Energy 27.9 31.2 31.9 0.1 0.1 0.1 85.1 80.1 81.5
Transportation 15.5 16.9 18.1 0.5 0.6 0.2 67.2 62.2 65.6
Materials and Building 92.3 96.2 93.6 0.3 0.4 0.4 47.2 45.9 46.6
Agriculture, Food and Forest Products 41.7 41.2 42.30.5 1.1 0.8 36.5 32.6 35.2
Total 177.4 185.6 185.9 0.30.5 0.4 52.4 49.9 51.8
4. Implementing the Recommendations of the TCFD, June 2017 (p24). 5. Values may not add to totals due to rounding. 6. The industry split has been revised for September 2020 and September 2019 comparatives to align to APS330 Pillar 3 disclosure.
11
ANZ 2021 Climate-related Financial Disclosures

Exposures to key TCFD sub-industries7
Group Industry/Sub-Industry FY21FY20 FY19
EnergyOil and Gas8 14.617.6 19.9
Coal Mining91.11.2 1.5
Electric Utilities1012.312.4 10.4
TransportationAir Freight 3.03.7 3.7
Maritime Transportation 1.51.8 2.4
Rail Transportation 1.81.9 1.7
Trucking Services 4.54.3 5.6
Automobiles 4.55.2 5.1
Passenger Air 0.20.0 0.1
Materials and BuildingMetals and Mining 7.28.8 8.5
Chemicals 2.12.8 3.1
Construction Materials 1.31.7 1.6
Capital Goods 17.318.2 19.8
Real Estate Management and Development 64.464.7 60.4
Agriculture, Food and ForestryBeverages 3.33.4 3.2
Agriculture 30.630.2 30.6
Packaged Foods and Meats 7.06.7 7.6
Paper and Forest Products 0.80.9 1.0
Total177.4185.6185.9
7. The industry split has been revised for September 2020 and September 2019 comparatives to align to APS330 Pillar 3 disclosure. Values may not add to totals due to rounding. 8. Exposure to oil and gas includes all of the oil and gas value chain
such as exploration, extraction, transport, refining and retail. Page 46 of ANZ's full year results investor discussion pack includes exposure to "upstream" exploration and extraction only as the focus is on resources (mining) exposure in line with
ANZSIC industry groupings: https://www.anz.com/content/dam/anzcom/shareholder/2021-FY-results-investor-discussion-pack.pdf. 9. Coal mining includes exposures to metallurgical (coking) coal used for steel making (~$0.6bn) and
thermal coal used for energy generation (~$0.4bn). 10. Electric utilities includes exposures to electricity generators that own or operate a mix of thermal and renewable generation assets as well as transmission and distribution infrastructure.
While supporting our customers to reduce their emissions, we are also seeking to reduce the environmental impact of our own operations. We have a suite
of environmental sustainability targets aimed at lowering our carbon emissions, reducing waste to landfill, and reducing water use and paper consumption.
See our 2021 ESG Supplement available at anz.com.au/about-us/esg/reporting/esg-reporting/ for further detail.
12
ANZ 2021 Climate-related Financial Disclosures

FINANCED EMISSIONS FOR OUR PROJECT
FINANCE PORTFOLIO
At 88%, renewable generation assets make up most of our total
exposures to electricity generation assets in our project finance
portfolio, which is a subset of our overall power generation portfolio
featured on pages 13–14. We have reported continually on this
portfolio since 2014 to track the impact of our direct lending.
Our financing has helped bring online a further 260 megawatts
(MW ) of solar projects in Australia over the past year, building on
the 859MW of renewables projects we helped bring online in FY20.
This has contributed to a rapid reduction in the emissions intensity
of the electricity generation assets we directly finance to 0.28 tonnes
of CO2 for every megawatt-hour generated – down 31% from FY20
and the lowest level recorded for this metric in the eight years we
have reported it. Given our commitments not to directly finance
any new or expanded coal-fired power stations and to phase out
our existing exposures by 2030, we expect to see continued
reductions in the emissions intensity of our Australian-based
generation portfolio over the coming years.
The average emissions intensity of generation we finance continues
to be well below the grid average in Australia of 0.73 tonnes of
carbon dioxide per megawatt-hour.11
For electricity generation assets located outside of Australia, we have
for the second consecutive year achieved an emissions intensity of
0.01tCO2 for every megawatt-hour generated. We are scheduled to
achieve a major milestone in FY22 with the exiting of our last ever
directly financed coal-fired power station outside of Australia. This
will put us on track to achieve a near zero emissions portfolio with
the scheduled commissioning of a new 376MW offshore wind farm
in Taiwan in late FY21 that was part financed by ANZ.
With the introduction of our interim target setting at 2030 to measure
our financed emissions to the electricity generation sector, this will
be the last time we separately report our financed emissions for our
project finance portfolio.
Tonnes CO2–e per MWh
electricity generated Australia
Outside
Australia
20210.280.01
2020 0.40 0.01
2019 0.54 0.02
2018 0.66 0.08
2017
0.58 0.24
2016 0.62 0.16
2015 0.64 0.20
2014 0.77 0.25
Movement
2014–2021-64% -96%
NEW PATHWAYS AND TARGETS FOR
TWO KEY SECTORS
Financial institutions are being asked to demonstrate how their
lending is supporting the achievement of the Paris goals. In response
we are disclosing two new pathways and associated targets for the
power generation sector and large-scale commercial buildings in
Australia (shopping centres and large office buildings).
We chose to start with these two sectors because electricity generation
is responsible for around one third of Australia’s national emissions,
with the non-residential buildings sector among the largest final end
users of electricity. Supporting our customers’ efforts to decarbonise
the electricity supply and reduce the energy needs of commercial
buildings will be a key focus for ANZ over the coming decades. While
they cover a relatively small part of our overall loan book at this stage,
the new targets we have set are aimed at providing greater
transparency about how our financing is aligned with climate
scenarios. They will also provide insights into how we are managing
the risks of the transition and capturing the growing opportunities.
In the short term, we expect companies will focus their efforts on
setting decarbonisation targets. We expect this will lead to more
transparent disclosure, including improved data for use in scenario
analysis which, in turn, should enable more meaningful outcomes.
Power generation portfolio metric
For the Paris goals to be met in full, the world needs substantially more
electricity to be generated in 2050 than it does today – according to
the International Energy Agency (IEA) in one scenario, by more than
2.6 times 2020 levels.12 Almost 88% of the electricity generated in 2050
will need to come from renewables, while generation from unabated
fossil fuels – responsible for around 61% of global electricity generation
in 2020 – shrinks to almost nothing.13 The scale of this challenge is
immense but ‘cleaning up the electricity mix and extending the
electrification of end-uses’ were among the key findings in scenarios
presented by the IEA in its 2021 World Energy Outlook.
We are committed to supporting the clean electrification of the
world’s energy supply and have set a target to reduce the emissions
intensity of our power generation portfolio by 50% on 2020 levels by
2030. Our 2030 target of 129 kgCO2/MWh is below the global average
of 138 kgCO2/MWh modelled by the IEA for its Net Zero Emissions by
2050 (NZE) Scenario.
Given the scale of the required increase in electricity generation,
we consider the emissions intensity of our portfolio (kg CO2 per
megawatt-hour of electricity generated) is an appropriate and
relevant measure to track. There are several ways to achieve the
targeted reductions in emissions intensity of our loan book –
not all of them within our control.
Firstly, because it is a debt-weighted metric, we will need to prioritise
financing projects and customers generating electricity at an average
intensity below our FY20 baseline portfolio average of 258kg CO2/
MWh. Those that generate electricity above this average will have
to be offset by increased limits to projects and customers with an
intensity lower than the baseline, or have their limits reduced so they
become a smaller proportion of the total book. This does not mean
11. Australian Government Department of Industry, Science, Energy and Resources, National Greenhouse Accounts (NGA) Factors, August 2021. 12 . Based on the Net Zero Emissions by 2050 Scenario (NZE) presented in the International Energy Agency’s (IEA) 2021 World Energy Outlook.
13. IEA NZE Scenario 2021.
13
ANZ 2021 Climate-related Financial Disclosures

we will no longer support corporate customers who generate above
this average – in fact, lending to support our customers' transition
plans may mean that the emissions intensity of our portfolio goes up
for a period as we may have increased exposure, however over time,
and as our customers bring online new clean generation capacity and
retire their existing fossil fuel assets, we expect to see the emissions
intensity of our portfolio decline. The timing of these retirements
and new capacity additions is the second key determinant that will
influence the emissions intensity of our portfolio. Decisions by our
corporate customers on the potential retirement and/or running
hours of their existing fossil fuel generation capacity will be the third
key determinant of whether we are able to achieve our targeted
reductions – and we expect this to be a key consideration in their
transition plans.
Our FY20 portfolio baseline of 258 kgCO2/MWh is well below the
2020 global average of 459 kgCO2/MWh. In large part this is due
to 39% of our exposures at the end of FY20 relating to renewable
projects or corporate customers whose generation fleets were
entirely composed of renewable technologies. Our funding of
renewables projects and companies has decreased slightly at
the end of FY21 to 38% of our portfolio total.
The emissions intensity of our portfolio has decreased slightly
during FY21 to 253 kgCO2/MWh. While this is 3.2% above a linear
pathway to our 50% reduction target, for the reasons outlined above,
we do not expect to see a linear trend towards the 50% reduction
target for 2030. The emissions intensity of our power generation
portfolio remains well below the global NZE trajectory.
Our engagement with power generation customers – large and
small – will be focused on how they intend to reduce the emissions
intensity of electricity supplied to their customers.
We know that decarbonising other sectors like transport, buildings
and industry will require an increase in electricity generation. The
challenge will be to meet that demand growth with clean energy
sources. Our new target seeks to meet this challenge and will have
considerable influence in terms of the customers and projects we
choose to support in future.
A complementary metric that we will measure and report against
is the debt weighted generation stack of our portfolio across six
generation technologies – coal, gas, oil, nuclear, hydro and
renewables. This metric is based on the Paris Alignment Capital
Transition Assessment (PACTA) approach developed by the 2 ̊C
Investing Initiative (2dii) in collaboration with global banks. Given
the metric skews results towards large generators, it highlights those
parts of our portfolio potentially more exposed to transition risks
which, could in turn, manifest as credit risks for ANZ. It also allows us
to compare our portfolio with various published climate scenarios.
At the end of FY21, fossil fuels comprised 56% of our debt-weighted
generation stack with gas assets making the largest contribution to
this at 33% of the total. Coal capacity remained stationary at 19%.
Our commitment to support the clean electrification of the world’s
energy supply is reflected in renewables increasing from 8% to
12% of the total portfolio over the past year. We expect this trend
to continue. ANZ’s power generation portfolio at the end of FY21
closely resembles the global mix. However, compared to various Paris-
aligned scenarios for the power sector out to 2050, it shows there is
significant opportunity for ANZ to finance the growth of renewables
– especially over the next decade to 2030.
Commercial buildings portfolio metric
In FY20, ANZ reported for the first time on the emissions intensity
of large commercial buildings and shopping centres that are either
fully or partially owned by large Real Estate Investment Trust (REIT )
and property fund customers in our Australian Institutional loan book.
The carbon intensity metric is calculated by adding the carbon
emissions from our customers’ office building and shopping centre
portfolios and dividing this by their ‘net lettable area’ (NLA), which
is a recognised metric in the commercial buildings sector. Reliable
public information is available on the environmental performance
of commercial buildings in Australia, which is why we chose it as
one of the first two sectors to report our financed emissions.
Non-residential buildings are one of the largest final end users of
electricity in Australia and will play a critical role in Australia’s path
to net zero emissions. We recognise there will be significant and
growing opportunities to support our customers to reduce their
energy use and the carbon intensity of the energy that they use –
both for new buildings and the retrofit of existing buildings.
This is why we have set a target to reduce the emissions intensity of
our Australian large-scale commercial real estate portfolio by 60% on
2019 levels by 2030.14 This exceeds the 50% reduction target we have
set for our global power generation portfolio and takes into account
the opportunities for faster and deeper cuts in emissions presented
by improved energy efficiency; greater electrification of final energy
14. ANZ’s target to reduce the emissions intensity of select buildings in our Australian commercial real estate portfolio by 60% was guided through the use of the Commercial Real Estate and Residential Mortgage Tool (April 2021 version) accessed from the Science Based Targets Initiative (SBTi) website
(available at https://sciencebasedtargets.org/sectors/financial-institutions#resources). The tool is yet to be updated with information from the IEAs Net Zero by 2050 scenario and ANZ will assess any implications for our target if and when this information is released by the SBTi. 15. Represents
combined generation capacity from non-hydro renewable sources like solar, wind and geothermal as well as battery storage and hydrogen and ammonia. All data for the global scenarios is sourced from the 2021 World Energy Outlook published by the International Energy Agency.
GHG Intensity (kgCO

/MWh)
ANZ vs. target pathway
+ 3.2%
POWER GENERATION
500
400
450
300
350
200
250
100
50
150
2020
2021
2022
2023
2024
2025
2026
2027
20282029
2030
–
IEA Net Zero Emissions
by 2050 Pathway
2030 Target
Pathway
Actual
Performance
GHG Intensity (kgCO

/MWh)
POWER GENERATION FINANCING MIX
100%
80%
40%
20%
60%
ANZ
2021
World
2020
SDS
2030
SDS
2040
SDS
2050
NZE
2030
NZE
2040
NZE
2050
–
Coal
NuclearOilNatural GasHydroRenewables
14
ANZ 2021 Climate-related Financial Disclosures

use; voluntary purchases of green electricity; and self-generation
of electricity from solar PV installations. It is important to note we
will be seeking opportunities to support our customers to improve
the environmental performance of their buildings across our entire
portfolio – not just those covered by the target.
The graphs below show that our large REIT and property fund
customers in Australia have made a strong early start to reduce the
emissions intensity of their office and shopping centre buildings. We
are also encouraged that several of our customers in the commercial
buildings sector have committed to achieving net zero emissions
targets by 2050 and are making strong progress towards their goal.
At the end of FY21 the office building portfolio was 24% below the FY19
baseline and the shopping centre portfolio 18% below. The reductions
in emissions intensity for both portfolios is also well ahead of the IEA’s
Beyond 2°C (B2D) scenario for service buildings presented in the 2017
Energy Technology Perspectives report. The B2D scenario puts service
buildings on a pathway to achieve net zero emissions by 2050, with
most of these savings to be achieved before 2030. These reductions
will primarily be achieved through energy efficiency improvements,
increased electrification of final energy use and the decarbonisation
of global electricity production. The 2050 convergence to net zero
emissions for service buildings aligns closely with the Net Zero Emissions
by 2050 scenario published by the IEA in May 2021.
16. At the end of FY21, the metrics captured the collective performance of 455 office buildings and 156 shopping centres across Australia that were either fully or partially owned by our
customers. 17. Based on findings contained in the October 2021 report by Knight Frank, Active Capital: Trends in Global Real Estate Investment (available at https://content.knightfrank.com/
research/1801/documents/en/active-capital-the-report-2021-8447.pdf).
There are other reasons we track the environmental performance
of our customers’ buildings – both at a portfolio level and at the
individual customer level. Research in Australia and internationally
suggests ‘greener’ office buildings attract higher sale prices. Analysis
by Knight Frank17 of more than 300 office sales over the past decade
in Sydney and Melbourne revealed that offices with NABERS energy
ratings of up to 4.5 stars are worth an average of 8% more than
unrated buildings on a per square metre basis. Buildings rated
between five and six stars attracted an 18% premium. Their research
also showed that on the rental side, many occupants are willing to
pay a rental premium for a building that reflects their preference
for environmental sustainability. Higher property values and lower
vacancy rates translates into lower risk profiles and therefore better
risk adjusted returns for our shareholders. Tracking the green ratings
and emissions performance of hundreds of office buildings and
shopping centres will therefore help us to identify the risk profiles
of individual customers and buildings and how they are performing
relative to the rest of the portfolio.
NEXT STEPS IN 2022
We will progressively expand our coverage of key sectors up to 2024,
in line with our NZBA commitment and the evolution of globally
recognised standards and methodologies, noting there is no single
method that covers all relevant sectors and asset classes. In 2022 we
expect to set out pathways and targets for more key sectors.
While the building assets covered by the target represent around
20–25% of our total exposures to the non-residential building
sector, we believe it provides valuable insight on the operational
performance of hundreds16 of office buildings and shopping centres
we have helped our customers to construct or upgrade in prior
years. The metrics will also reflect any steps that our customers take
in the future to improve the environmental performance of their
portfolio, which may be supported by lending from ANZ. We
acknowledge that our customers have multiple sources of capital
and so we do not claim that the reported reductions in emissions
intensity are entirely due to ANZ’s financing. We will seek to better
understand the attribution of our financing to emissions savings
in the years ahead to ensure we are aligned with leading
methodologies for the reporting of our portfolio emissions.
GHG Intensity (kgCO

/m
²
NLA)
ANZ vs. pathway
– 13.9%
COMMERCIAL REAL ESTATE
Oce Buildings
90.0
80.0
60.0
70.0
40.0
50.0
20.0
10.0
30.0
2019
2025
2030
20352040
20452050
–
IEA Beyond 2°C Scenario
(B2DS) Alignment Pathway
2030 Target
(-60%)
Actual
Performance
GHG Intensity (kgCO

/m
²
NLA)
ANZ vs. pathway
– 7.5%
COMMERCIAL REAL ESTATE
Shopping Centres
100.0
80.0
90.0
60.0
70.0
40.0
50.0
20.0
10.0
30.0
2019
2025
2030
20352040
20452050
–
IEA Beyond 2°C Scenario
(B2DS) Alignment Pathway
2030 Target
(-60%)
Actual
Performance
15
ANZ 2021 Climate-related Financial Disclosures

Explanatory notes
FINANCED EMISSIONS FOR PROJECT FINANCE
Reported figures reflect actual generation from financed assets
over the period 1 October 2020 to 30 September 2021, or an annual
reporting period as close to those dates as possible. The proportion
of generation attributable to ANZ finance was based on the ratio of
our Class 1 Debt Limits to Total Syndicate Debt. They do not include
generation assets under construction.
Australian financed emissions are 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) grid18 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. 2019–20 National Greenhouse and Energy Reporting (NGER) data
for designated generation facilities (available from Australian Clean
Energy Regulator website); and
4. Client supplied data 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 98% of electricity
generation from projects financed by us in 2021.
Financed emissions outside Australia are calculated using
generation and emissions data from four sources:
1. The New Zealand Electricity Authority’s Electricity Market
Information website for New Zealand generation assets;
2. Carbon Monitoring for Action database maintained by
the Centre for Global Development;
3. Client supplied data; and
4. Estimates by ANZ for remaining generators where there was
no data available from the first three sources or where there
was doubt over the accuracy from the first three sources.
The overall emissions intensity of our project finance portfolio is
calculated in accordance with the following formula:
∑
Projects
Project Emissions
x
Project Class 1 Limits
Electricity Sent OutTotal Syndicate Debt
POWER GENERATION PORTFOLIO METRIC
The figure reported reflects the debt weighted carbon intensity of
electricity generation (i.e. carbon emissions per unit of generation)
for Institutional customers whose main business activity is the
generation of power for distribution. Customers included in the
metric each year are those who we have more than $1m exposure
at default (EAD) as at 30 September 2021.
The emissions intensity for each of our customers is calculated by
summing up their total Scope 1 emissions from generation assets
either in their ownership or operational control, and dividing this by
their total gross electricity generation. To determine the portfolio
average emissions intensity, we apply a debt-weighted calculation
approach based on the following formula:
∑
Customer
Customer emissions
x ANZ Financing
Electricity generated
∑
Customer
ANZ Financing
It is important to note that this is a different calculation methodology
for determining the emissions intensity of our power generation
portfolio to the one we applied last year.
19
That methodology was
based on a derivative of the Paris Alignment Capital Transition
Assessment (PACTA) approach developed by five international banks
together with the 2 ̊C Investing Initiative (2dii).20 While there are many
strengths to the PACTA methodology, we consider the new
methodology provides improved insights on the environmental
impact of our financing and the collective efforts of our customers to
transition their electricity supply towards zero emissions. By focusing
on each customer’s emissions intensity of generation – irrespective
of the size of their fleet – it removes skewing the metric towards
customers with large generation portfolios. It also forms an important
metric on which to engage with our customers with respect to their
transition strategies.
We relied on a variety of different sources to calculate each
customer’s emissions intensity of generation. For our customers with
assets in Australia, our preference was to use the Scope 1 emissions
and gross generation data they report each year to the Australian
Clean Energy Regulator (CER) (responsible for administering Australia’s
National Greenhouse and Energy Reporting Act). We used the latest
available data submitted to the CER to calculate the emissions
intensity of our customers’ generation fleets, meaning we used
generation and emissions data applicable for the year ending
30 June 2020 for our FY21 calculations.
Our second preference was to use emissions and generation data
reported in corporate publications, the main method we applied for
customers with assets outside of Australia. Where this information
was unavailable, or deemed unreliable, we estimated our customers’
emissions intensity of generation based on their ownership stake in
generation capacity that we sourced from an Asset Level Database
(ALD), compiled and updated regularly by climate and energy data
18. Generation data for scheduled generation assets connected to the NEM was supplied by Energy One Limited. 19. The emissions intensity of our power generation portfolio was reported in 2020 as 472 kgCO2/MWh. The new calculation methodology has resulted in this being revised to
258 kgCO2/MWh. 20. A full description of the methodology we applied in FY20 is available from the 2 Degrees Investing Initiative website at the following link: https://2degrees-investing.org/wp-content/uploads/2020/09/Katowice-Banks-2020-Credit-Portfolio-Alignment.pdf.
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ANZ 2021 Climate-related Financial Disclosures

specialist Asset Resolution. The annual generation from these assets
was calculated by applying global average capacity factors for the
relevant technology type reported in the International Energy
Agency’s (IEA) 2021 World Energy Outlook. Emissions factors were
sourced from the IEA’s Emissions Factors 2021 publication and
applied based on the country that the customer’s assets were located
in and the relevant technology type of the plant i.e. coal, gas or oil.
Assets that were based on nuclear, hydro and renewables
technologies were assumed to have an emissions intensity of zero.
This calculation approach was also used to ‘sense-check’ the reported
emissions intensity of all our customers to ensure we could have
confidence in their reported information.
Because the metric is (for the most part) based on real emissions
and generation data from our customers, it allows us to benchmark
the portfolio average against Paris-aligned climate scenarios such
as those published by the IEA. We have chosen to benchmark our
portfolio against the IEA’s Net Zero Emissions by 2050 Scenario which
illustrates a pathway for the electricity sector to play its proportionate
role in driving the world’s energy sector to net zero emissions
by 2050.
For the first time, we have also reported a new metric that shows the
debt-weighted generation stack of our customers. The methodology
used to report the metric is based on the PACTA for Banks
methodology developed by the 2dii.21 Under the methodology, the
installed capacity of generation assets owned by our customers is
allocated to ANZ based on the proportion of their loan to our overall
exposures to the electricity sector. For example, if a customer owns
a 600 megawatt (MW ) gas-peaker power station and a 200MW wind
farm and their loan makes up 2% of our overall exposures to the
electricity generation sector, ANZ is allocated 12MW of the gas-fired
power station and 4 MW of the wind farm.
For each customer, the installed capacity of generation assets
allocated to ANZ are aggregated and assigned to one of six
technology types:
• Coal
• Gas
• Oil
• Nuclear
• Hydro
• Renewables
The debt-weighted generation stack of our customers is presented
as a 100% stacked bar chart, which again allows benchmarking with
climate scenarios that show how electricity generation capacity could
change in future to meet the goals of the Paris Agreement. We have
chosen to benchmark with the Sustainable Development and Net
Zero by 2050 scenarios that were published by the IEA in the 2021
World Energy Outlook.
COMMERCIAL BUILDINGS PORTFOLIO METRIC
This metric covers our commercial office and shopping centre
portfolio in Australia, where the majority of exposures are located.
The carbon intensity metric is calculated by adding up the carbon
emissions from our customers’ office building and shopping centre
portfolios and dividing this by their ‘net lettable area’ (NLA). This is
calculated in accordance with the following formula:
∑
Customer
Building Emissions (kg CO2)
∑
Customer
Net Lettable Area (m2)
Carbon emissions data for our customers’ office and shopping centre
buildings is based on Scope 1, 2 and 3 emissions associated with fuel
and electricity consumption. Any purchases of accredited green
power by our customers is assumed to have zero emissions.
Emissions data is sourced from NABERS Energy rating certificates
that are issued to our customers and includes a mixture of both
Whole Building and Base Building ratings. The ratings are accessible
from a public register.22
Data on the NLA of office buildings is sourced from the Australian
Government’s Building Energy Efficiency Register.23 For office
buildings and shopping centres that don’t have a Building Energy
Efficiency Certificate, the NLA of our customers’ buildings is back-
calculated based on information appearing in the NABERS Energy
Rating. This is calculated by dividing the total energy use of the
building by the published energy use per m2 of NLA.
The inclusion of our customers’ buildings and shopping centres in the
overall metric is dependent on whether the building has a current
NABERS energy rating at a given point in time e.g. 30 September or
that it has expired within the previous 12 months of that date. If those
criteria are not met, the building is not considered as part of the
overall calculation. Priority is given to using emissions data from
current NABERS energy ratings and in cases where a building is jointly
owned by two or more customers, the building is only counted once
in our calculation.
21. A full description of the PACTA for Banks methodology that is applied to the power generation sector is available at the following link: https://www.transitionmonitor.com/wp-content/uploads/2021/07/PACTA-for-Banks-Methodology-document-02-07-2021_v1.2.0_v4.pdf
22. See https://www.nabers.gov.au/ratings. 23. See https://www.cbd.gov.au/registers/downloadable-cbd-program-data-set.
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ANZ 2021 Climate-related Financial Disclosures

Independent Limited Assurance Report to the Directors
of Australia and New Zealand Banking Group Limited
Based on the evidence we obtained from
the procedures performed, we are not aware
of any material misstatements in the ANZ
FY2021 Climate-related Financial Disclosures
report which has been prepared by ANZ
in accordance with the Financial Stability
Board’s Task Force on Climate-related
Financial Disclosures (TCFD) framework
and ANZ’s Basis of Reporting, for the year
ended 30 September 2021.
CONCLUSION
WHAT DID KPMG’S WORK INVOLVE –
SCOPE OF WORK
Australia and New Zealand Banking Group Limited (ANZ) engaged
KPMG to perform a limited assurance engagement in relation to the
ANZ 2021Climate-related Financial Disclosures. KPMG’s scope of work
comprised limited assurance over all material text and data claims
in the ANZ 2021 Climate-related Financial Disclosures report.
The ANZ 2021 Climate-related Financial Disclosures report covers
ANZ’s global operations for the year ended 30 September 2021 unless
otherwise indicated. A copy is available at anz.com/shareholder/
centre/reporting.
WHAT WAS THE REPORTING CRITERIA USED?
The ANZ 2021 Climate-related Financial Disclosures was prepared
in accordance with the Financial Stability Board’s Task Force on
Climate-related Disclosures (TCFD) Framework and ANZ’s Basis
of Reporting (“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 2021 Climate-related
Financial Disclosures report, 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 climate risks and related disclosures;
•interviews with relevant management concerning ANZ's
climate change risk management framework;
•interviews with relevant staff responsible for developing the
content (text and data) within the ANZ 2021 Climate-related
Financial Disclosures reporting to understand the approach
for management, monitoring, collation, and reporting of
such information;
•comparing text and data (on a sample basis) presented to
underlying sources. This included considering whether all
material matters had been included or excluded; and
• an assessment that information reported was in accordance
with the TCFD Framework.
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ANZ 2021 Climate-related Financial Disclosures

WHAT IS LIMITED ASSURANCE AND
MATERIAL MISSTATEMENT
A limited assurance engagement is restricted primarily to enquiries
and analytical procedures. 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 Banking Group
Limited for the purpose of providing an assurance conclusion on the
ANZ 2021 Climate-related Financial Disclosures report 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 2021 Climate-related Financial
Disclosures report and other ESG related information in accordance
with the criteria; and
•establishing internal controls that enable the preparation and
presentation of the ANZ 2021 Climate-related Financial Disclosures
report 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 2021 Climate-related Financial Disclosures report
for the year ended 30 September 2021, 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 at anz.com).
KPMG
Melbourne,
22 November 2021
Adrian King | Partner
Melbourne,
22 November 2021
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The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.
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ANZ 2021 Climate-related Financial Disclosures

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