Elliott: integrating purpose and strengthening governance in ESG

We deliver our purpose by executing our strategy of improving the financial wellbeing and sustainability of our customers. Specifically:

“We formally engage with stakeholders annually to help determine the most pressing ESG issues of the day.”

• Helping people save for, buy and own a sustainable, liveable and affordable home;
• helping people to start or buy and sustainably grow their business; and
• helping companies move goods and capital around the region sustainably.

Then we weave purpose and strategy together to create value for all stakeholders – as shown on our value creation model.

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This is supported by a range of metrics reviewed regularly by the Board and management.

Three areas - financial wellbeing; affordable and sustainable housing; and environmental sustainability - are therefore fundamental to our business and strategy and form the basis of our ESG work.

In addition, in acknowledgement the operating environment is constantly changing and there is a need to keep pace with community expectations, we formally engage with stakeholders annually to help determine the most pressing ESG issues of the day.

That work highlighted three additional issues this year:

• Customer experience – offering affordable, accessible and responsible financial products and services that meet customer needs.
• Information security – responding and adapting to scams, fraud and cyberattacks.
• Ethics, conduct and culture.

Good governance

Our governance model is then calibrated to oversee our work in these six areas.

Specifically, our ESG governance dedicated to this includes our Board Ethics and ESG Committee, led by the Chairman, which is responsible for setting the policies and principles for our approach. It is focused on overseeing our response to risks and opportunities as well as understanding our most material ESG issues.

In addition, I chair an Executive Ethics and Responsible Banking Committee which is a decision-making group that operationalises our approach.

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Over the last 12 months, the Board EESG Committee has been spending more time on our approach to scams and understanding the challenges and opportunities for customers on climate and biodiversity.

My ERBC Committee has spent more time focused on our carbon offsetting strategy, family violence and financial abuse, and our commitment to improving the financial wellbeing of customers.

Both bodies are provided with regular updates on ANZ’s performance against key ESG external ratings – such as ratings agency S&P and the not-for-profit governance monitor CDP – which provide an indication of how external stakeholders perceive our performance. Governance is further embedded in the business through our group scorecard, staff training programs and ethical decision making framework.

Ensuring our governance processes – such as the ethical decision making framework - are embedded in our day-to-day work not only helps us create long-term value, it also enables us to manage risks.

For example, we recently assessed the impact of customers using credit cards to fund cryptocurrency purchases. Our discussion covered the volumes of these transactions, questions around customer harm, options for an ANZ response and the impact of the response on customers.

The great housing challenge

It goes without saying that housing remains a key priority for us in both Australia and New Zealand.

It remains one of the great challenges for our generation – to ensure everyone in Australia and New Zealand, irrespective of background and circumstance, has access to affordable, liveable and sustainable homes.

These challenges have recently been exacerbated by higher interest rates, impacting particularly those with higher levels of debt, first home buyers, those more exposed to cost-of-living challenges or who have less stable employment.

There was hope higher rates would lead to a moderation in house prices, however, after a 9 per cent fall in capital cities, it appears house prices and rents are rising again due to supply shortages. This is a significant challenge and not easily resolved. 

ANZ is playing a role by increasing our lending in affordable housing, on both sides of the Tasman, and supporting new business models like Assemble here in Australia or our “BluePrint to Build” program in New Zealand which has helped more than 8,000 Kiwis build new homes with discounted lending.

More broadly, we have already committed $A10 billion to fund affordable housing by 2030 and are pleased to have booked $A4.4 billion to date. In New Zealand we have also supported 4,800 households with over $NZ200 million in new lending through our Good Energy Home loan since launch in 2022. There is more we can do and we will.

Housing is not only an important business for us but also core to our customer proposition and core to what our community expects from banks – and therefore one of the areas we care about most.

We will, of course, continue to seek opportunities to expand our presence in this sector and contribute positively and constructively to the national dialogue. It is an area that rightfully occupies significant time at the Board and with our Executive team and is a great example of where purpose, strategy and business opportunity come together.

Shayne Elliott is CEO of ANZ

This article has been adapted from speaking notes at ANZ's ESG Forum. The presentation and investor discussion pack is available on the shareholder centre.