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Responsible business lending

Applying our Social and Environmental Risk Policy

Our Social and Environmental Risk Policy (the Policy) and associated ‘sensitive sector’ requirements set out the principles and standards we apply to all Institutional and Corporate banking customers (business customers) and their activities to ensure consistent management and mitigation of social and environmental risks. It is important that we understand the social and environmental risks associated with our financing decisions as it helps avoid reputational and economic loss associated with customers who may not be managing these risks appropriately or who are engaged in activities that are not sustainable in the long term. When we take the time to understand these issues and encourage and support our clients to manage them effectively, we can deliver on our responsibilities to society while protecting ANZ from potential financial loss and reputation damage.

The Policy is principles-based and guides decision-making on clients, transactions and business strategies. These principles are:

  • ANZ supports customers that demonstrate a balanced approach to social, environmental and developmental impacts;
  • ANZ supports and encourages customers to adopt management practices to continuously improve their social and environmental performance; and
  • ANZ supports customers that use internationally accepted industry management practices to manage social, environmental and economic impacts (including effects on human rights, biodiversity, cultural heritage, indigenous rights, health and safety, governance and environmental sustainability)

In the first instance we will work to ensure our customers are compliant with relevant host country laws, regulations and permits that pertain to environmental and social issues. We will also work closely with our customers to support and encourage them to invest in new and improved technologies and adopt more sustainable practices.

Screening customers

We require all business customers to be assessed for potential social and environmental issues. The screening process is applied to all new customers, all material new transactions of existing customers and annual reviews of all customers.

We have developed a number of processes and tools to help reduce and/or mitigate social and environmental risk in our lending. These include:

  • Social and environmental screening tool: helps staff assess reputational, social and environmental issues, consider stakeholder concerns and assess adequacy of management and mitigation strategies.
  • Reputation Risk Radar: monitors social and environmental issues relating to existing and prospective customers
  • Early Alert Review Committee: provides staff with externally sourced social and environmental information relating to current and prospective customers
  • Ethics and Responsible Business Committee: agrees and sets ANZ's risk appetite for industry sectors to align with the banks purpose and values.

Where customer practices may not be consistent with our policies, we work with the customer to understand the circumstances and, where necessary, identify specific and time-bound improvement plans. If prospective or existing customers do not meet our standards and they are not willing to adapt their practices in an appropriate timeframe, we may decline financing or exit the relationship.

Employee sustainability training

We have a range of social and environmental training programs to educate our employees on our policies and standards and how they are applied in practice.

Corporate lending employees who have approval to make credit decisions undertake mandatory online Social and Environmental Risk training. The training covers ANZ’s Corporate Sustainability Framework, our Social and Environmental Risk Policy and ‘sensitive sector’ requirements and our approach to human rights. It also provides guidance 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.