ANZ’s latest ESG briefing was notable for: omitting reference to some of the big issues in last year’s briefing, such as its affordable housing initiatives; for highlighting new concerns, such as biodiversity, with little or no detail on its approach; and for using out-of-date data.
The bank’s ESG process, or at least the reporting of it, appears to lack rigour. Anyone trying to track the bank’s progress against some of its goals would struggle.
Last year, the bank said it had elevated housing affordability to a “priority issue” on its ESG agenda, setting a target of funding and facilitating A$10 billion for affordable and sustainable housing by 2030.
ANZ chief executive Shayne Elliott said at the time: “There is an emerging disparity in housing and COVID has made it worse.”
Yet affordable housing did not get a single mention in this year’s briefing.
At this week’s briefing, Maile Carnegie, group executive Australian retail, talked about the resilience of home loan customers in the face of higher interest rates, supporting her view that stress levels are low by presenting a breakdown of the bank’s Australian mortgage portfolio at March 30 – before rates started to go up.
The Reserve Bank has told banks they need to focus more on the climate risks in their mortgage portfolios, which have increased with the growing frequency and severity of floods, storms and fires.
But when asked about the bank’s exposure to climate risk in its mortgage portfolio, Carnegie could not offer any insights. Anther executive said the bank might be in a position to provide data on the risk of climate change in the mortgage portfolio “over the next couple of years”.
Mark Whelan, group executive institutional, said biodiversity now forms part of its discussions with corporate clients, alongside climate.
But in the section of the briefing paper dealing with the bank’s engagement with its 100 largest customers, all the data is about emissions.
Elliott said the bank was just getting started with its work on biodiversity, which he said was more complex than climate because the impact is hard to measure. “We are all learning,” he said.
But he also conceded the point raised by one investor that there is already available data on land clearing and the reduction of habitat.
On climate, the bank’s focus is on working with its 100 largest emitting business customers to help develop transition plans to net zero. Whelan said the bank would skew its institutional business to companies with credible transition plans.
But it was not able to provide current data on the progress with transition plans. A table showing customer transition plans grouped into levels of maturity was from last year.
The bank’s key takeaways were that it will be out of coal by 2030 and it has reached $31 billion of its target of $50 billion of sustainable funding and facilitation commitments by 2025.
It will release emissions intensity targets for customers in oil and gas and building products later this year to sit alongside its targets for the large scale real estate and power generation sectors.
For investors, the