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Responsible business lending

Applying our Social and Environmental Risk Policy

We seek to assess and manage the impacts of our lending decisions through the application of our Social and Environmental Risk Policy (the Policy) and accompanying ‘sensitive sector’ requirements. For more information on our sensitive sector requirements, click on the sector name below:

We are committed to working with customers that support social and environmental sustainability in their approach. We recognise that one of the most valuable contributions we can make, is to inform and work with our customers to understand risks and opportunities posed by their operations and to manage their social and environmental impacts. This can include the effect of their operations on human rights, biodiversity, cultural heritage, indigenous rights, health and safety, governance and environmental sustainability.

The Policy outlines the social and environmental considerations to be taken into account by our bankers when determining business transactions. It incorporates our Human Rights Standards, including our ‘zero tolerance’ for improper land acquisition and involuntary resettlement, and labour rights issues such as modern slavery.

We review the Policy annually, with oversight from our Ethics and Responsible Business Committee (ERBC) to ensure it remains fit-for-purpose. The review takes into account changes to customer practices, international standards, emerging social and environmental issues and stakeholder expectations.

Screening customers

Prior to entering into a relationship with any large business customer, relationship managers are expected to examine a broad range of social and environmental issues. They must also have specific knowledge of the customer’s history and approach to dealing with any potential (or historical) social and environmental impacts.

Under our credit policy we typically review our business customers annually. This includes the consideration of relevant issues using our social and environmental risk screening tool. We expect our customers in all sectors to implement appropriate stakeholder engagement strategies and plans and we have included this consideration in the tool.

We monitor the social and environmental risks of our business customers through our monthly ‘Reputation Risk Radar’. We also rely on regular dialogue between relationship managers and their customers to alert us to issues. Notable incidents and allegations are referred to our risk management meetings in which social, environmental, governance and credit risks are considered.

In instances when a business’s practices may not be consistent with our policies, we work with the customer to understand the circumstances and, where necessary, encourage the customer to identify specific and time-bound improvement plans. If prospective or existing customers are unwilling to adapt their practices in an appropriate timeframe, we may decline further financing or exit the relationship.

Employee training

We recognise that educating employees on our policies and standards and how they are applied in practice is key to effective management of the social and environmental risks associated with our business lending. 

Our training programs cover the Policy, sensitive sector requirements and our approach to human rights. Guidance is also provided on identifying and escalating potential issues to the Ethics and Responsible Business Committee, which examines customer proposals that may significantly impact ANZ’s reputation with stakeholders. This training is mandatory for new employees authorised to make credit decisions for business customers.