As the risks of climate change become more widely known and accepted, so does the idea banks can act as a catalyst for everyone to reduce emissions and preserve our natural environment by allocating capital to environmental and social outcomes.
“Banks are exposed to climate-related risks through their lending and investments… There are opportunities for banks to play a role in shaping a more sustainable future.”
Like many industries, banks have been working hard to understand the potential impact of climate change on their businesses.
Most banks – including ANZ – are working to understand climate risk and, as more data are captured, are becoming better placed to act and influence change. This work will continue to improve as the risk becomes better known and policies are developed to mitigate that risk.
Banks are exposed to climate-related risks through their lending and investments. As we begin to better understand these risks, we are in a key position in society to help people and businesses understand their own climate challenges.
But hand-in-hand with this is the growing realisation there are opportunities for banks to play a role in shaping a more sustainable future.
Initially, the connection between business and climate change might not seem obvious – as bankers, we have traditionally been good at dealing with financial risk.
Climate Change is now widely acknowledged as a key financial risk.
We understand data and risk intimately, we are good at having conversations with our customers about their financials and where their risks and opportunities lay.
ANZ is New Zealand’s largest bank - we have a relationship with one in two New Zealanders. That gives us an enormous opportunity to effect change by leveraging those relationships, having skin in the game and helping people make the transition to a less carbon intensive world.
Promoting environmental sustainability is now firmly one of our key priorities and ANZ’s climate strategy focuses on three areas:
- Helping our customers by encouraging them to identify climate risks and opportunities, create transition plans and report publicly on their progress;
- Support industries making the transition to help grow the economy;
- Reducing our own impact by managing and reducing emissions from our own operations.
The first one is by far the most important. We’re supporting customers to identify the risks associated with their situation and planning to minimise the risk or transition to a more sustainable business model.
We’re also looking at the physical risks of climate change, such as extreme weather events, and how they impact both businesses and individuals, including how this will impact property owners in different geographic areas in New Zealand.
At ANZ New Zealand, we know 20 of our existing customers are named on ANZ’s global ‘Top 100 Emitters’ list and we’ve already engaged with all 20 to get an idea of their plans for the transition to a net zero economy, as well as managing their climate-related risks and opportunities.
We’ve identified a further 15 companies we’ll be engaging with outside this list. We believe honest and meaningful engagement with those industries shifting and modifying their business will grow our economy and help facilitate the change we all need to make to varying degrees.
In many cases we’re finding this transition creates new opportunities and we’re helping customers identify and make the most of those too.
For example, the conscious consumer is driving significant changes in demand for products and services. Consumers want to support producers who are ‘doing good’ as well as delivering quality products and services.