ANZ has elevated housing affordability to a priority issue on its ESG agenda, alongside environmental sustainability and financial wellbeing. It has set a 10-year target of funding and facilitating A$10 billion for affordable and sustainable housing by 2030.
The bank gave an ESG briefing yesterday, outlining initiatives it is taking in housing, including financing disability accommodation development, rent-to-own schemes and land leasing.
ANZ chief executive Shayne Elliott said: “There is an emerging disparity in housing and COVID has made it worse.”
The bank has committed $226 million of finance for specialist disability accommodation, as part of its $10 billion target. It has also brought together SDA providers with property clients to facilitate the inclusion of disability accommodation in developments.
It claims to be the leading financier of land lease sector, a government-backed program that involves owning the home but leasing the land it sits on. This arrangement can reduce the cost of getting into a home significantly.
Elliott said the bank’s approach to dealing with some affordable housing groups is like early-stage capital investment.
“It is a different risk appetite and the returns will be different. We think it is worth doing because it is long term sustainable.”
One company it works with on this basis is rent-to-own developer Assemble Communities, which allows people to rent a house for five years before committing to buy.
ANZ’s other ESG priority areas are environmental sustainability and financial wellbeing
The bank has a commitment to reduce its thermal coal exposure to zero by 2030. Since 2015, it has fallen from exposure at default of $1.7 billion to $500 million currently.
Asked at the briefing about the bank’s exposure to other fossil fuels, Elliott said the bank has not made a decision on that issue but it was under active consideration. An updated policy will be released this year.
The bank’s current exposure at default to oil and gas extraction is $6.7 billion, its exposure to metal ore mining is $4.1 billion and its exposure to metallurgical coal mining is $600 million.
Elliott said: “Our focus is on the opportunities that the transition to a low carbon economy presents.”
In 2019 the bank set a 10-year target of funding and facilitating $50 billion of sustainable projects. So far it has funded $8 billion and facilitated $6 billion.
The bank is funding transport electrification, the development of hydrogen as a power source and energy efficient buildings.
Sixty of the bank’s largest emitting businesses have reported to the bank that they have targets or plans to transition to low or zero net emissions.