ANZ NZ’s Voluntary Climate Report

ANZ NZ’s first voluntary climate report provides a picture of our climate-related risks and opportunities as we shape our strategic approach to how we direct capital to support New Zealand’s transition to a low-emissions, climate-resilient economy.

This report describes our first exploration of climate risk in our lending portfolios: coastal and inland flooding risk in our residential mortgage portfolio, and transition risk across some of the sectors we lend to.

Producing this report has helped prepare us for reporting under the mandatory standards in FY24.

In future years we will expand our analysis to develop a clearer view of the risks and opportunities our customers face, and how we support them to mitigate and adapt.

We recognise the role we play in supporting our customers to reduce emissions and enhance their resilience to a changing climate.

We’re also committed to reducing emissions from our own operations and building our climate expertise within the business.

Since 2015 we’ve reduced our scope 1 and 2 greenhouse gas emissions by 61 per cent and in 2023 more than 2,400 of our staff took part in climate change training.

In early 2023 we launched the low-interest Business Regrowth Loan allocating an initial fund of $250 million to support customers and regional economies impacted by significant weather events.

During 2023 business customers invested more than $30 million in assets or projects that demonstrated environmental benefits through the new ANZ Business Green Loan. We’ve lent over $260 million through our Good Energy Home Loan designed to fund energy efficiency initiatives.

We continue to support our large institutional customers’ transition activities through funding and facilitating access to a range of sustainable finance products.

We were an early leader in sustainable finance for New Zealand’s large business sector, and we have continued to innovate in this space.

As a bank, the emissions from activities we finance through lending are the largest source of our scope 3 greenhouse gas emissions. For this report we’ve assessed the financed emissions for 98 per cent of ANZ’s lending.

As the country’s largest lender to the agriculture sector with 25 per cent market share, we are the main bank for farmers.

Agriculture is a high-emitting sector, and lending to the sector (mainly dairy, sheep and beef) accounts for around 64 per cent of ANZ’s overall financed emissions.

ANZ NZ is proud to be New Zealand’s largest lender to the agriculture sector and we are very aware of the progress our farming customers have already made to manage environmental impacts.

We plan to use our ESG information system (ESGIS) – a tool that enables us to better understand our agricultural portfolio by combining physical, emissions and financial data – to gain a greater understanding of physical climate risks in our agriculture portfolio.

We also plan to work alongside industry to develop our approach to setting targets with a roadmap to achieve these and broaden our support for customers to transition to a low emissions agriculture sector.

Some of our larger institutional agribusiness customers are already advanced in their transition planning; we are already engaging with many of them on how ANZ can assist their transformation efforts through finance and support.

This year, we plan to set a new engagement target with our large institutional agribusiness customers, some of whom we already engage with, to support their climate transition planning.

These customers face specific transition challenges, however, due to changing customer preferences in key export markets they may gain a potential competitive advantage when demonstrating reduced climate impact.

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Supporting climate resilience for our customers:

When Cyclones Hale and Gabrielle swept through the North Island in early-2023, we saw the devastating impact climate change can have on lives and livelihoods.

Extreme weather events can have an impact on our customers’ properties and their financial resilience.

For this report we’ve assessed the coastal and inland flood risk to residential properties with an ANZ mortgage. The analysis shows us that around 2 per cent of residential properties in our mortgage portfolio are at risk of coastal flooding by 2030.

It is important to note this work is at a very early stage and indicative only.

Inland flooding analysis shows that 17.6 per cent of residential properties in our mortgage portfolio may experience 1-in-100-year flooding.

Of these, 16.9 per cent of properties could expect damage of less than 0.5 per cent of total insurable value, while 0.18 per cent of properties could expect damage of 10 per cent or more of total insurable value in 1-in-100-year flooding.

We know this is top of mind for some of our customers. We’ve reached out to many of those impacted by Cyclone Gabrielle and other extreme weather events in 2023.

We’re committed to continuing support for customers impacted by extreme weather events now and into the future.

Climate adaptation is an evolving area. Policy is being developed at a local and national level, and work is also underway by government agencies and local authorities to make useful climate hazard information publicly available.

We are seeking to gain a deeper understanding of where financial vulnerabilities may exist, and how we respond to these risks and support our customers.

Looking to the future:

ANZ is committed to engaging constructively and transparently with stakeholders as we transition our lending to support a low-emissions, climate-resilient Aotearoa.

As New Zealand’s largest bank, we recognise ANZ can make an impact and influence transition to a low-emissions future by supporting access to finance to help reduce emissions and drive other environmental outcomes.

Our customers can be reassured we’ll work with them to ensure they understand what this might mean for them over time.

Any ANZ customers who have questions or concerns should get in touch with us.

Read more about ANZ New Zealand's Environmental, Social and Governance reporting here.

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