The ESG opportunity: poised for long-term success

The increasing importance of environment, social and governance (ESG) issues continues to become more apparent to everyone here at ANZ – especially in our interactions with investors.

" What’s unique about ANZ is how our approach to ESG considers our extensive international footprint. We operate in more than 30 markets and manage a broad range of ESG issues across our global business."We’ve worked hard over the last five years to ensure we have a strong culture, an embedded purpose and that ethics and values are integrated into our decision-making.

Our strategy is also clear. We want to improve the financial wellbeing and sustainability of our customers. Our three key priorities are; 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.

Aligned with these are our ESG priorities:

  • Improving the financial wellbeing of our people, customers and communities by helping them make the most of their money
  • Improving the availability of suitable and affordable housing options for all Australians and New Zealanders
  • And supporting household business and financial practices that improve environmental sustainability.

We also have a strong commitment to fair and responsible banking, as well as issues identified through our annual materiality assessment. These include investing in new technology and tools to protect our customers from scammers looking to steal their data and money.

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We also want to ensure we have the most empathetic and helpful customer experience processes for when things go wrong, including managing complaints and customers in financial difficulty.

We’re investing in technology and partnerships that help customers improve their financial wellbeing and create value. And finally we look out for our people – physically and mentally so they can bring their best selves to assist customers.

Our purpose, strategy and ESG priority areas are aligned as well as integrated with our material issues. Together they work to support our overall ambition to create value for our customers, community, and shareholders.

What’s unique about ANZ is how our approach to ESG considers our extensive international footprint. We operate in more than 30 markets and manage a broad range of ESG issues across our global business. We need to be aware of challenges across our entire network and regularly assess and identify numerous ESG risks and opportunities.


This ESG approach is critical to creating value and delivering long-term success. How we hold ourselves to account and govern our approach is also critical. And we have two ESG committees dedicated to this.

Firstly, our Board Ethics and Environmental, Social and Governance (EESG) Committee 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 identifying and understanding our most material ESG issues. This informs our approach and guides our targets, external reporting and disclosures.

Over the last 12 months this committee has spent the bulk of its time on ‘governance’ issues, such as making sure our policies – like those which govern our lending to sensitive sectors – are up to date.


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It’s also spent a lot of time overseeing our climate change commitment, including setting our portfolio emissions pathways in areas like commercial properties and power generation.

Then we have our management Ethics and Responsible Business Committee, which I chair. This is a leadership and decision-making body. It operationalises our ESG work; considering the social and environmental impacts of the industries we finance. This is the “who we bank” side of things as well as our treatment of customers and the communities we serve – the “how we bank”.

This year the Executive Committee spent its time discussing topics such as scams and cyber-crime and customers in difficulty or in need of additional support. This includes initiatives such as the additional training we provided to about 4500 staff to help them identify and offer special support to customers facing financial difficulty.

Our people are also critical to the delivery of this strategy. We want purpose-led people who drive value by caring about our customers and the outcomes we create. The last couple of years of the pandemic showed us what our people are capable of – supporting customers during times of stress.

We’re proud of them and their work and our recent employee engagement results are testament to this, with overall engagement at 84 per cent.  Additionally, 89 per cent of staff reported a feeling of ‘belonging’ which is above the global best-in-class benchmark.

Strong and sustainable

We are also seeking to measure the success of our ‘Bank we’re Building’ program, including clear metrics with internal and external targets. These include having customers who are more loyal and engaged and have greater financial wellbeing over their lifetime. It’s also ensuring our financial results are stronger and more sustainable over the long term.

So, we’re building an ANZ that improves the financial wellbeing and sustainability of our customers. And one that delivers consistently strong shareholder returns. We’ve got some work to do, but we’re excited and driven to make this succeed.

As always, there are external events that will impact our business. Globally there are geopolitical tensions with Ukraine and Russia and North Asia and the Pacific. Trade tensions with US and China continue.

There are also very significant energy security issues in the European Union, which is having a knock-on effect around the globe. Closer to home – in our key retail markets of Australia, New Zealand and the Pacific – many of our customers are dealing with real cost-of-living pressures.


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Rising inflation and higher food and fuel prices across the Pacific are starting to have real impact on people’s standard of living. In New Zealand, inflation is at its highest since 1990 and in Australia inflation is also at its highest in more than 30 years and is outpacing wage growth.

Savings buffers

And interest rates are rising with the RBA undertaking a substantial rate tightening cycle. Because of this, we’re asking ourselves what it means for the financial resilience of our customers and what can we do to support them if they’re feeling challenged.

While households have built up a large pool of savings over the last couple of years – it’s too early to tell how this will play out. There are going to be some customers vulnerable to stress and we will be on the look-out to assist them.

Many of our customers have built up a significant savings buffer through the COVID-19 pandemic. About 40 per cent of them have 12 or more months of savings buffers across offset, savings or redraw facilities. Around 70 per cent of our customers have paid additional funds to reduce their principal debt.

The percentage of customers who are behind in their loan repayments has also continued to decrease. About 0.7 per cent of home loans are more than three months behind, which is lower than pre-COVID levels.

While customers are in a stronger starting position – the current environment is challenging for many people. This potential downturn will look different to what we’ve seen in recent history, where hardship was triggered by unemployment. 

We’re in a rising interest rate environment. For many of our home loan customers – this is the first time they are experiencing this. Our job is to identify these customers and work with them as early as possible to support them. Data plays an important role in early identification of customers heading towards difficulty.

We are using data analytics to look at savings, credit and offset accounts – to help understand customers’ financial behaviour and potential future outcomes. It analyses events like interest rate changes, increases in living expenses and cashflow and whether these could impact the customer’s financial position. 

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This is helping us to understand who is in a positive financial position to meet future repayments; and who could experience financial stress in the next 12 months. We are focused on proactively identifying and contacting customers who may need help.

This could be through text messages, nudges, or prompts. For example, courtesy reminders of when next payments are due or phone calls suggesting direct loan payments. We’ve also invested significantly in building and upskilling our financial hardship team during the pandemic.

The path to net zero

In the area of sustainability we want be the leading Australia-and New Zealand-based bank in supporting customers' transition to net zero emissions.

We have a key role to play by directing our finance, services and advice to support our customers in shifting to low-carbon business models. We’ve committed to funding and facilitating $50 billion by 2025 to help our customers achieve lower emissions and we are well advanced in meeting this target.

Some examples of this strategy coming to life include a $200 million funding program with the Clean Energy Finance Corporation, which offers discounted asset finance to help medium sized business improve their energy efficiency.

We’ve also piloted the trading of tokenized carbon credits, using ANZ’s Australian-dollar stable coin. And we’ve signed a memorandum of understanding to develop a carbon farming and biodiversity project with our partners Qantas and Inpex that combines native reforestation and biomass harvesting.

This project is expected to provide opportunities for rural landowners in the wheatbelt community in Western Australia. It will also support our customers by contributing to supply, market making and distribution capabilities for carbon credits.

We were the first Australian bank to sign up to the Net Zero Banking Alliance. The NZBA commits us to aligning our lending portfolio with the goal of net zero emissions by 2050. We are on track to set targets for nine priority sectors. We commenced this work last year, setting emissions intensity targets for power generation and large-scale commercial real estate.

We’ve been continuing that work and later this year will be announcing targets for oil and gas and building products. Our targets, pathways and disclosures make very clear how we are aligning our lending to the Paris Agreement goals.

We’re confident we are well positioned for the future and looking forward to the opportunities to come.

Shayne Elliott is CEO of ANZ

This article has been adapted from speeches at ANZ's annual ESG Briefing. You can read his full speeches here.


The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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