@GRIAusConf_Plenary: Linking Sustainability to Strategy, Corporate Governance and Risk - Shane Lucas


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@GRIAusConf_Plenary: Linking Sustainability to Strategy, Corporate Governance and Risk - Shane Lucas

  1. 1. Linking Sustainability ToStrategy, CorporateGovernance and Risk –the role of materiality.Chair: Stella Whittaker, Senior Executive Sustainability and ClimateChange, Manidis Roberts; Vice-Chair, GRI Stakeholder Council.Michael Dundon, Chief Executive Officer, Vic SuperShane Lucas, Group Head of Sustainable Development, ANZAlex Malley, Chief Executive Officer, CPA Australia 1
  2. 2. The Role of Materiality:Linking Sustainability to Strategy, Corporate Governance and Risk Shane Lucas Group Head of Sustainable Development The Australian GRI Conference on Sustainability and Integrated Reporting Melbourne, 27 March 2012
  3. 3. The context: Our Corporate Responsibility Framework. 3
  4. 4. We maintain Sensitive Sector policies to guide decision-making.• Sensitive Sector policies guide decision-making related to Water, Forestry & Forests, Energy, and Extractive Industries.• Policies were released in 2009 and comprehensively reviewed in 2011 incorporating consultation with internal and external stakeholders.• Process and outcomes of the review were reported through the 2011 Shareholder and Corporate Responsibility Review. 4
  5. 5. We offer social and environmental risk training to staffwith lending responsibility.• New social and environmental risk training program implemented earlier this year.• Mandatory for all Credit Approval Discretion (CAD) holders in our Commercial, Corporate & Institutional Divisions globally.• The training aims to: • Assist staff in making responsible practices the foundation of decision making • Ensure our people take account of the material risks and opportunities facing our clients and business • Help minimise exposure to reputation risk. 5
  6. 6. Our relationship managers use screening tools toassess social and environmental risks.• Social and environmental screening is a critical part of the assessment process for existing and prospective customers.• Our screening tools are designed to continually evolve to respond to issues and industry trends.• The screening covers social and environmental issues and includes our human rights standards – Respecting People and Communities. 6
  7. 7. There is a well understood and transparent escalationprocess that goes to the highest level of the bank.• ANZ utilises an escalation model allowing all staff to identify and escalate projects or customers with reputational risk potential.• Staff are provided with tools, training and policies to aid determination of approval – or the need for escalation or rejection.• Escalation can continue to the Group Reputation Risk Committee chaired by the Group Chief Risk Officer. Asia, Pacific, Sustainable A Approval point Europe, America Development Institutional risk Risk (Advisory role) Customer A A Social & A Reputation A RM Executive Transaction Environmental Risk consideration consideration risk Committee Project Equator S&E No appetite Principles Screening tool consideration 7
  8. 8. We publish sector information statements on anz.com• Stakeholders expect more disclosure and transparency on our approach to sensitive sector customers and projects.• anz.com houses detailed information statements on our sensitive sector policies.• anz.com also holds position statements on stakeholder concerns and specific campaigns (coal-fired power generation, cluster munitions, Gunns).• Our approach to transparency and reporting is continually evolving in response to industry trends – and our own values. 8
  9. 9. Our Shareholder and Corporate Responsibility Review –meeting stakeholder expectations.• Since 2010, ANZ has published a combined shareholder and corporate responsibility review• Stakeholder conversations and industry trends sought a robust and practical document that included information on financial and non- financial measures of performance• 2010 and 2011 reviews included information about sustainable development approach, material issues, policy positions, and governance processes• Our approach to the Review is also evolving in response to feedback from customers, investors and stakeholders 9
  10. 10. Our approach in action: Military equipment.• In 2010, we revised our Military Equipment policy in response to stakeholder concerns – and material, values-based reflection.• We encouraged direct engagement between the stakeholder and customers allegedly involved in the production of cluster munitions components.• We engaged directly with our defence customers and outlined the rationale behind our revised policy – and the material implications for our relationship.• Customers responded positively – 2 of 3 companies committed to cease production at the conclusion of existing contracts.• We respectfully exited one relationship. 10
  11. 11. Thank you 11