Page created by Anthony Burke
  REVIEW 2016
Front cover: Mai Nu, Saver Plus Participant. See Mai’s story on page 44. Photography: Mary Thompson.

Chairman’s Message                                    2
CEO’s Message                                         3

How we do Business

About our Corporate Sustainability Review             4
Sustainability highlights                             5
Our markets of operation                              6
ANZ's purpose                                         7
Our strategy                                          8
Our Corporate Sustainability Framework                9
Identifying our most material
sustainability issues                                10
Stakeholder engagement                               13
Corporate governance and risk management             16
Our sustainability targets                           18

Fair and Responsible Banking                         20

Rebuilding customer trust                            21
Digital transformation                               28
Improving accessibility                              30
Social and environmental impacts of our operations   31

Social and Economic Participation                    34

Workplace participation and diversity                35
Building financial inclusion                         44
Giving and volunteering                              49
Tax transparency                                     52

Sustainable Growth                                   54

Responsible business lending                         55
Climate Change — managing risks and opportunities    58
Reducing the environmental footprint
of our operations                                    62

Sustainability Performance Summary 2016              65

                            CHAIRMAN’S MESSAGE

                                This year has been one of transition for the bank.
                                We are reshaping the Group and our revised
                                Corporate Sustainability Framework, reported
                                on here, is part of that work.

    DAVID GONSKI, AC            Our transition comes at a time of growing community discontent with
    CHAIRMAN                    big business in Australia, and with the banking sector in particular.
                                There are many reasons for this discontent, including highly publicised cases
                                of corporate misconduct and community concern over the social and economic
                                effects of the changing economy.
                                Large institutions such as ANZ have been slower than we should have been
                                to identify and respond to our failings.
                                Genuine sustained change takes time, but we have begun the process. We have
                                formally recognised the Board’s oversight of our most material sustainability
                                risks and opportunities by broadening the Governance Committee’s charter
                                and changing its name. Our new Environmental, Sustainability and Governance
       “IT MAKES SENSE          Committee, which I chair, will bring a greater focus on, and accountability for,
     FOR US TO RESPOND          achieving our sustainability goals.
      AND REBUILD OUR           A focus of our revised Sustainability Framework is to deliver fair and responsible
    COMMUNITY STANDING          banking. We want to do better than just meet basic expectations. We want to
                                provide products and services which are responsible and transparent in their
                                costs and benefits.
                                We also have a complementary role to play in enabling the social and
                                economic participation of people in the communities in which we operate.
     OTHERS TO IMPROVE          For example, ANZ’s MoneyMinded financial education program has helped
    OUR STANDING FOR US.”       more than 420,900 people build their money management skills and savings.
                                Tens of thousands of low-income Australians have also developed a savings
                                habit through our Saver Plus program.
                                I am confident that by improving customer and community engagement we will
                                create a more successful organisation — one with a longer term, more equitable
                                and sustainable view of company performance.


                         CEO’S MESSAGE

                         This year I was honoured to become ANZ’s
                         Chief Executive Officer and to begin a process
                         of reshaping our strategic focus to create a simpler,
                         better capitalised and more balanced bank.

SHAYNE ELLIOTT           The banking industry is facing a number of significant challenges. Technology
CEO                      is redefining our business and customer expectations, with political, social
                         and regulatory demands of banks changing rapidly. Left unmanaged, these
                         challenges will restrict our ability to fulfil our core purpose in society — to shape
                         a future where people and communities thrive.
                         While acknowledging the challenges ahead of us, this report provides an
                         opportunity to reflect on the positive contributions ANZ has made this past year
                         to the communities in which we operate. We helped over 168,000 people in
                         Australia buy a home, and have continued to support small business, providing
                         more than $2 billion in lending to help Australians start new businesses and
                         to grow their existing businesses.
                         We stepped up the pace of innovation with new initiatives to compete
                         successfully in the digital age, such as the launch of Apple Pay™ in Australia
IMPORTANT INFLUENCE      and New Zealand. In addition, almost 100,000 new digital banking customers
 ON THE COMMUNITIES      are now registered for goMoney™ in rural communities across the Pacific,
IN WHICH WE OPERATE      many of whom were previously unable to access banking services.
   AND THAT COMES        We have maintained our focus on understanding and managing the social and
 WITH AN ENORMOUS        environmental impacts of our business decisions. I am pleased that this year
                         we have substantially raised our standards with respect to human rights, clearly
                         articulating our zero tolerance approach to ‘land grabs’ and forced labour.
                         We could not have achieved all this without the hard work and commitment
                         of our people, and I thank them all for their contribution.


                                        ABOUT OUR CORPORATE
                                        SUSTAINABILITY REVIEW

    The purpose of our Corporate Sustainability Review is to inform stakeholders
    about how we manage and anticipate current and future social, environmental
    and economic risks and opportunities. We also report our performance against
    the sustainability targets we set for 2016, our targets for 2017 and the way in
    which we identify and manage the issues considered most material to our
    business by us and our stakeholders.

    REPORT STRUCTURE                                               SUSTAINABLE DEVELOPMENT GOALS
    This report is structured in four sections. The first          On 1 January 2016, the United Nations Sustainable
    outlines how we do business, including our revised             Development Goals (SDGs) came into effect. The 17 goals
    Corporate Sustainability Framework, our approach to            and 169 targets are aimed at solving the world’s biggest
    the identification and prioritisation of material issues,      challenges — ending global poverty, protecting our planet
    our engagement with stakeholders, and governance               and ensuring human rights — over the next 15 years.
    and risk management. The following three sections detail
                                                                   ANZ is committed to the SDGs and our revised
    our management approach and performance relevant
                                                                   Sustainability Framework, together with public
    to materially significant issues aligning with our revised
                                                                   sustainability targets which we set annually, supports
    Sustainability Framework.
                                                                   their achievement. In recognition of the important role
    This document is part of our reporting suite. An               business will play in achieving these ambitious goals,
    overview of our performance in our three focus areas           our CEO Shayne Elliott has joined over thirty leaders from
    of the sustainability agenda is included in ANZ’s 2016         the Australian business community and signed a public
    Shareholder Review. A complete set of 2016 financial           CEO Statement of Support for the SDGs. Throughout
    disclosures is contained in ANZ’s Annual Report and ANZ’s      this report we have indicated where our sustainability
    Consolidated Financial Report, Dividend Announcement           targets are aligned to relevant SDGs.
    and Appendix 4E. Our website,, also contains
    information about ANZ, our Corporate Sustainability            REPORT SCOPE
    Framework and our governance structures.
                                                                   Our 2016 Corporate Sustainability Review covers all
                                                                   ANZ operations worldwide over which, unless otherwise
    GLOBAL REPORTING INITIATIVE                                    stated, we have had operational control for the financial
    ANZ is a GOLD Community member of the Global                   year commencing on 1 October 2015 and ending
    Reporting Initiative (GRI). We have been reporting using       30 September 2016. In accordance with GRI G4, our
    the GRI framework for more than a decade, and since            reporting boundaries for material aspects are disclosed
    2014 we have been preparing our report in accordance           on page 12. Monetary amounts in this document are
    with the GRI G4 Guidelines. This is our second year of         reported in Australian dollars, unless otherwise stated.
    reporting to the ‘comprehensive’ level. This report also
    contains material disclosures required by the G4 Financial     EXTERNAL ASSURANCE
    Services Sector Supplement. A complete GRI Index can
    be found on our website at                         KPMG has provided independent assurance in respect
                                                                   of this Corporate Sustainability Review, including
                                                                   considering whether the appropriate indicators have
    CLIMATE DISCLOSURE STANDARDS                                   been reported in accordance with the GRI G4
    BOARD FRAMEWORK                                                Comprehensive Level of Disclosure. A copy of KPMG’s
    In 2015, ANZ became a signatory to the Climate                 Assurance Report is on page 79.
    Disclosure Standards Board (CDSB) Statement on fiduciary
    duty and climate change disclosure. Accordingly, when
    preparing the environmental information in this report
    we applied the principles of the CDSB Climate Change
    Reporting Framework.



          $2.5B                                                  113,071                                                          41.5%
         funded and facilitated                                        hours volunteered                                       women in management
           in low carbon and                                             by employees                                               positions1
          sustainable solutions

                  1ST                                     420,900+                                                                      17%
      on the Relationship Strength                        people reached through our financial                               reduction in Greenhouse
     Index (Institutional customers)2                      education program MoneyMinded3                                    Gas emissions in Australia4

       $89.8M                                               169,300+                                                                 336
        in community investment                         customers registered for ANZ goMoney™                                  people employed from
      (includes foregone revenue)5                           mobile banking in the Pacific6                                  under-represented groups7

1.    Includes all employees regardless of leave status excluding contractors (which are included in FTE).
2.    Roy Morgan Research. Base: MFI Customers, aged 14+, 6 months rolling average.
3.    This is the estimated number of people who have benefited from ANZ’s MoneyMinded financial education program since 2003.
4.    From premises energy against a 2013 baseline.
5.    Figure includes foregone revenue of $69.3 million, being the cost of providing low or fee free accounts to a range of customers such as government benefit
      recipients, not for profit organisations and students.
6.    Cumulative total since launch in 2013.
7.    Includes Aboriginal and Torres Strait Islander people, people with a disability and refugees.                                                                5

                          OUR MARKETS OF OPERATION

                                                      4                   15       13

                    30                 18                  10

                                                 3    34             22                  9

                                                 25                                                                                  14

                                                      12                            21
                                                                     28                           24                    23
                                                                                                       19               29       5

                    8            32

    1    Australia                    13    Japan                                            25   Singapore

    2    American Samoa               14    Kiribati                                         26   Taiwan

    3    Cambodia                     15    Korea                                            27   Thailand

    4    China                        16    Laos                                             28   Timor Leste

    5    Cook Islands                 17    Malaysia                                         29   Tonga

    6    Fiji                         18    Myanmar                                          30   United Arab Emirates

    7    France                       19    New Caledonia                                    31   United Kingdom

    8    Germany                      20    New Zealand                                      32   United States of America

    9    Guam                         21    Papua New Guinea                                 33   Vanuatu

    10   Hong Kong                    22    Philippines                                      34   Vietnam

    11   India                        23    Samoa

    12   Indonesia                    24    Solomon Islands


                                            ANZ'S PURPOSE

Our purpose is to shape a world where people and communities thrive.
That is why we strive to create a balanced, sustainable economy in which
everyone can take part and build a better life.

From our earliest days in the 1830s, financing              We combine the energy and commitment of our
commerce and facilitating trade, our focus has              people with the power of technology and data to
always been on unlocking opportunity for individuals,       deliver innovative and convenient services that make
families, businesses and communities. With fast-changing    the greatest difference for customers, and for the
technologies, demographic shifts, climate change            communities and countries in which we operate.
and globalisation bringing both opportunities and
challenges, we now have an important role to play           WE CARE ABOUT WHO WE BANK
in enabling economic participation and encouraging          AND HOW WE BANK THEM
sustainable growth.
                                                            We recognise that to earn trust we need to continuously
                                                            raise standards in everything we do. We must go beyond
AT ITS HEART, OUR BUSINESS                                  complying with laws and regulations to considering the
IS TRANSFORMATION                                           evolving needs and expectations of our stakeholders
We use our insights, products and services, and             in every decision we make, including the social and
our banking network in Asia, to help individuals            environmental impacts. We do this through the fair and
and businesses to grow. We convert savings into             balanced deliberation and actions that our customers,
investment, build small businesses into large, take         employees and society expect from us.
domestic enterprises international, and evolve old
industries into new. We transform ideas, hard work
and ambition into reality.

Our business is about building relationships that create
value. By connecting people and businesses, and playing
a leading role in workplace participation and diversity,
we create a strong, cohesive and vibrant community.


                                                                        OUR STRATEGY

             Our strategy is to use our strong Australian and New Zealand foundations, distinctive
             geographic footprint, and market-leading service and insights to better meet the needs
             of customers and capture opportunities linked to regional trade and capital flows.

             In doing this, ANZ provides shareholders with access to                              Focus our efforts on attractive areas where
             a unique combination of high-returning franchises and                                we can carve out a winning position
             direct exposure to long-term Asian growth.                                           Make buying and owning a home or starting, running
                                                                                                  and growing a small business in Australia and New Zealand
             Our strategy has three elements — creating the best
                                                                                                  easy, and to be the best bank in the world for customers
             bank in Australia and New Zealand for home owners and
                                                                                                  driven by the movement of goods and capital in our region.
             small business customers, building the best bank in the
             world for clients driven by regional trade and capital flows,                        Drive a purpose and values led transformation
             and establishing common, digital-ready infrastructure to                             of the Bank
             provide great customer experience, scale and control. The                            Create a stronger sense of core purpose, ethics and
             strategy is underpinned by strong expense, capital and                               fairness, investing in leaders who can help sense and
             risk management disciplines and the quality of our people.                           navigate a rapidly changing environment.
                                                                                                  Build a superior everyday experience for our people
             ANZ’S STRATEGIC PRIORITIES                                                           and customers to compete in the digital age
             Create a simpler, better capitalised, better                                         Build more convenient, engaging banking solutions
             balanced and more agile bank                                                         that simplify the lives of customers and our people.
             Reduce operating costs and risks by removing product and
             management complexity, exiting low-return and non-core
             businesses and reducing our reliance on low-returning
             aspects of Institutional Banking in particular.

             OUR BUSINESS

                      Transactional banking                        Lend money/                     Superannuation, insurance                 Risk mitigation
                            services                               hold deposits                    and financial planning/               products to manage
                                                                                                      investment advice                     market volatility
    and partners

                                           Invest in our people                    Invest in technology,             Collaborate with partners to
                                            to build a diverse                   digital solutions and our           innovate, build capacity and
                                         and inclusive workforce                   branches and offices               support economic growth

                        Paid $10.1B in                 Paid wages and                Paid dividends of            Paid taxes of $2.7B         Invested $89.8M
                     interest on deposits              salaries of $5.5B            $5B to our 545,256             to government              in communities

8            8.    Excludes employees where only ANZ shares are held in trust under ANZ employee share schemes.

                                OUR CORPORATE
                           SUSTAINABILITY FRAMEWORK

ANZ’s Corporate Sustainability Framework supports the delivery of ANZ’s
business strategy. This year, we revised our Sustainability Framework so as
to better reflect our most material social and environmental issues, and to
align with the bank’s purpose.

             FAIR AND                              SOCIAL AND
             RESPONSIBLE                           ECONOMIC
             BANKING                               PARTICIPATION

Earn trust by keeping pace with      Build strong customer                Create opportunities for all of our
the changing expectations of         relationships and connect with       customers and enable sustainable
our stakeholders, maintaining        our communities, supporting          growth for individuals, businesses
high standards of conduct and        a diverse and inclusive society in   and industry.
understanding the social and         which everyone can participate.
environmental impacts of our
business decisions.


                               IDENTIFYING OUR MOST MATERIAL
                                   SUSTAINABILITY ISSUES

     Our annual materiality assessment assists us to identify, review and prioritise
     material social, environmental and governance risks and opportunities.

     In addition to guiding our reporting, the process also             OUTCOMES
     informed the review of our Corporate Sustainability
                                                                        Evolution of our material issues
     Framework and the development of our FY17 sustainability
                                                                        Sixteen areas of material significance were identified
     targets. It also enabled us to identify our most material social
                                                                        in the early stage of the process. We updated the list
     and environmental risks, in line with Principle 7.4 of the ASX
                                                                        of issues used in 2015, improving clarity and alignment
     Corporate Governance Principles and Recommendations
                                                                        of issues and introducing new issues. New issues include
     in our 2016 Corporate Governance statement available on
                                                                        Fairness and Ethical Conduct and Digital Innovation. Also see the Material Risks section of
     the Operating and Financial Review of the Directors Report         Stakeholder engagement and analysis
     (pages 30–31 of the Annual Report) and the Principal Risks         We asked our stakeholders to rank the list of issues
     and Uncertainties (pages 179–187 of the Annual Report).            according to importance. We also asked them to discuss
                                                                        their ‘top three’ issues.
     THE KEY STEPS IN OUR 2016                                          Quantitative feedback from the participants was used
     MATERIALITY PROCESS:                                               to produce a materiality matrix, enabling us to determine
     • Engaged key internal stakeholders to discuss existing            the relative importance of each issue in the combined
       information that could be used to guide the materiality          view of our internal and external stakeholders.
       process and determine the internal and external
                                                                        We have rated these according to the following categories:
       stakeholders with whom we should engage
     • Compiled a detailed internal list of issues for review and       • Material issues rated as ‘very high importance’
       discussion, and assessed our operating environment,                by internal and external stakeholders
       including a detailed media scan to identify key issues           • Key issues rated as ‘high importance’ by internal
       and megatrends in our sector. This resulted in a shortlist         and external stakeholders
       of key material issues and opportunities for review and          • Key issues for our business rated as ‘lower in priority’
       discussion by our internal and external stakeholders               by internal and external stakeholders.
     • Independent external sustainability consultants
                                                                        Qualitative feedback from stakeholders during the
       facilitated workshops, supplemented by one-on-one
                                                                        workshops and interviews was recorded to inform
       interviews, with more than 100 stakeholders (internal
                                                                        our interpretation of the matrix and ensure key issues
       and external). Prior to the workshops, stakeholders
                                                                        were fully explored.
       were asked to complete a short survey identifying what
       they considered to be the most material social and               Key themes from stakeholder engagement
       environmental risks and opportunities facing ANZ.                Fairness and ethical conduct is the issue of highest
       The range of stakeholders consulted included customers,          importance to both internal and external stakeholders.
       employees, investment managers, research providers               Our stakeholders told us that ethical and fair conduct must
       and representatives of government, superannuation                be at the heart of everything we do. Stakeholders pointed
       funds and non-government organisations from                      to examples of poor conduct, particularly in Australia,
       Australia, New Zealand, Fiji, Vietnam and Hong Kong              leading to consumer detriment and commented that the
     • Analysed survey responses, workshop discussions and              banking sector had lost community trust. Many of the
       interview responses, distilling themes into a broader            comments made by stakeholders on this issue directly fed
       materiality review summary, resulting in a matrix                into the development of our new Sustainability Framework,
       that depicts the issues of significance to our business          specifically the focus area of Fair and Responsible Banking.
       and stakeholders
     • Reported and discussed the results of the process with
       our Corporate Sustainability and Diversity Executive
       Committee and Environmental, Sustainability and
       Governance Board Committee.


Responsible lending to business continues to be ranked                                          Due to the complex regulatory environment in which
highly and stakeholders view the way in which we manage                                         the Group operates across Asia and the Pacific,
the social and environmental impacts of our lending                                             stakeholders considered AML and TF critical reputational
decisions as core to our risk management. This issue refers                                     and operational risks.
primarily to large-scale business lending, particularly to
                                                                                                Community expectations for greater transparency was
corporate customers whose activities have a potentially
                                                                                                reflected in the high rating of Corporate governance.
significant impact on communities and the environment.
                                                                                                The volatility in global capital and banking markets is
Stakeholders also emphasised the importance of
                                                                                                seen as a threat to the global economy, highlighting
considering the social impacts arising from our corporate
                                                                                                the need for robust governance.
lending decisions, particularly in developing economies.
                                                                                                The importance of data protection was also raised by
Digital Innovation, Customer Experience and Talent,
                                                                                                stakeholders, especially given that threats to data security
Attraction and Retention are collectively viewed as key to
                                                                                                are dynamic and evolving with the increased sophistication
the long-term success of our business. Technology is rapidly
                                                                                                of technology. Stakeholders want comfort that we will
changing the way our customers bank, the way our business
                                                                                                respond effectively to cyber threats and that we will use
operates and the way we live. Accelerating technological
                                                                                                the personal data we hold for the benefit of the customer.
change and disruptive business models present operational
risks that require effective and strategic management.                                          We have used the prioritisation of issues in the materiality
Stakeholders also noted that Talent, Attraction and Retention                                   matrix to guide the content of this report and to determine
underpins our ability to deliver a positive customer                                            the applicable GRI G4 material aspects. The table on
experience and manage our brand reputation.                                                     the following page outlines our material issues against
                                                                                                corresponding GRI G4 material aspects, where appropriate.
The potential for significant negative impacts on reputation
                                                                                                In accordance with GRI G4 requirements, it also indicates
and the loss of customer and community confidence, as a
                                                                                                where the primary impacts of this issue occur in terms of
result of poor processes and controls, was emphasised by
                                                                                                our stakeholders, and whether they are internal or external
stakeholders. Anti-Money Laundering (AML) and Terrorism
                                                                                                to our business.
Financing (TF), Fraud and Data Security, Financial System
Stability and Regulation and Corporate Governance, were
all ‘rated’ in the top half of our most material issues.


Level of importance

     Material issues rated as
     ‘very high importance’

     Material issues rated as                                                                                                    Customer         Fairness and
     ‘high importance’                                                                                                          experience       ethical conduct
     Key issues rated as
     ‘lower in priority’                                                                                                Responsible
                                                                                                                          lending       Fraud and
                                                                                                                        to business
                                           Importance to stakeholders

                                                                                                                                       data security
                                                                                                 Diversity and
Priority areas                                                                                     inclusion Corporate                                 AML and
                                                                        Access to                                                                      Terrorism
                                                                                                                goverance                 Digital      financing
     Fair and responsible banking                                        services Investing in the
                                                                                                                    Financial System      innovation
                                                                                                            stability and regulation
     Social and economical participation

     Sustainable growth
                                                                                             Labour rights
     Other                                                                                                         Consumer       Talent,
                                                                                                                   protection attraction and
                                                                        supply chain

                                                                                                         Importance to business



            ANZ Material Issue                                    GRI Material Aspect                                  Boundary9

            Access to services                                    Local communities10                                  External (customers, communities)
                                                                                                                       Internal (employees)

            Anti-money Laundering                                 Anti-corruption                                      External (customers, communities)
            and Terrorism Financing                                                                                    Internal (employees)

            Consumer protection                                   Product and service labelling                        External (customers)

            Digital innovation                                    We report on ANZ-specific indicators                 External (customers)

            Fairness and ethical conduct                          General standard disclosures                         External (shareholders, customers,
                                                                  — ethics and integrity                               communities)
                                                                                                                       Internal (employees)

            Financial System                                      We report on ANZ-specific indicators                 External (customers, shareholders)
            stability and regulation                                                                                   Internal (employees)

            Fraud and data security                               Customer privacy                                     External (customer)
                                                                                                                       Internal (employees)

            Labour rights                                         Key issue rated as ‘lower in priority’               External (shareholders)
                                                                                                                       Internal (employees)

            Customer experience                                   We report on ANZ-specific indicators                 External (customers)

            Diversity and inclusion                               Diversity and equal opportunity                      External (customers, communities)
                                                                                                                       Internal (employees)

            Investing in the community                            Local communities10                                  External (customers,
                                                                  Product portfolio                                    communities, suppliers)

                                                                  Product and service labelling10                      Internal (employees)

            Sustainable supply chain                              Key issues rated as ‘lower in priority’              External (customers,
                                                                                                                       communities, suppliers)
                                                                                                                       Internal (employees)

            Talent, attraction and retention                      Employment                                           External (customers, communities)
                                                                  Training and education                               Internal (employees)
                                                                  Equal remuneration for
                                                                  men and women

            Environmental footprint                               Key issue rated as ‘lower in priority’               External (customers, communities,
                                                                                                                       Internal (employees)

            Responsible business lending                          Product portfolio                                    External (customers,
                                                                  Economic performance                                 communities, environment)

            Corporate governance                                  General standard                                     External (shareholders,
                                                                  disclosures — Governance                             customers, communities)
                                                                                                                       Internal (employees)

          Fair and responsible Banking                  Social and economical participation                    Sustainable growth                 Other

     9.  Internal boundary refers to entities over which ANZ has direct control and the people and contractors employed by those entities. External boundary refers
         to people and entities outside of ANZ’s direct control.
12   10. GRI G4 Finance Sector Supplement.

                                STAKEHOLDER ENGAGEMENT

Effective engagement with our stakeholders is an important part of our
business and is embedded in ANZ’s policies, processes and operations.
We have a formal engagement policy that applies to all employees and seeks
to maintain a structured approach to engagement through the existence of
clear and consistent communications channels, clear ownership of relationships,
and accountabilities for relationship owners. Our stakeholder engagement
principles are consistent with the AA1000 Stakeholder Engagement Standard.

             CUSTOMERS                                                    EMPLOYEES

How we engaged                                              How we engaged
• ‘Your Say’ Research Community online customer panel       • Annual ‘My Voice’ survey of employee engagement
• Stakeholder forums                                        • Direct communication and formal performance
• Real Time Customer Feedback program                         appraisals with line managers
• Customer research                                         • ‘Town Hall’ team meetings with senior executives
• Customer Advocate Office                                  • ANZ intranet, MAX, a resource for our
                                                              employees to receive updates and information
• Complaints Resolution Centre
                                                              about developments and initiatives at ANZ
• Social media
                                                            • ANZ’s internal collaboration tool, MAX Connect,
Key issues raised                                             which connects our people in real-time
• Interest rates                                            • Meetings with the Financial Services Union (FSU)
• Access to banking                                         Key issues raised
• Customer service                                          • Strategic focus and business priorities
• Fees and charges                                          • Employee health, safety and wellbeing
• ANZ responsible business lending practices,               • Training and development
  including human rights
                                                            • Workplace diversity
• Ethics and business conduct
                                                            • Access to flexible working conditions
• Business conduct
                                                            • Organisational restructuring
Comment                                                     • Performance and remuneration
Our response to the issues raised by customers can          • Negotiation of Enterprise Agreements
be found in the Fair and Responsible Banking chapter
of this report.                                             Comment
                                                            Our response to these issues can be found in the Fair
                                                            and Responsible Banking and Social and Economic
                                                            Participation chapters.


                                                                                 GOVERNMENT AND

     How we engaged                                                How we engaged
     • Results briefings                                           • Regular meetings with political stakeholders, officials
     • Strategy briefings and other market updates                   and regulators by our CEO and senior executives
     • Annual General Meeting                                      • Submissions to parliamentary committee inquiries
                                                                     and other government and regulatory consultations
     • Disclosure documents, including results
       announcements, investor presentations, annual reports       • Participation in industry engagement and forums
       and other ASX lodgements                                    • Meetings with trade negotiators regarding free
     • Electronic communications and webcasts                        trade agreements
     • Dedicated ANZ Shareholder website                           • Providing information and technical advice on
                                                                     international practices to regulators in developing
     Key issues raised                                               countries
     • Opportunities and challenges associated with ANZ’s
       new strategy                                                Key issues raised
                                                                   • Conduct and culture in the Australian banking
     • Progress on executing the strategy, including:
                                                                     industry, financial advice and treatment of customers
       –– Reducing operating costs and risks by removing             in financial difficulty
          product and management complexity
                                                                   • Competition, bank pricing and product decisions
       –– Reducing reliance on and exiting low-returning and
                                                                   • The impacts of national and international regulatory
          non-core businesses
                                                                     reform in New Zealand, including financial markets,
       –– Further strengthening the balance sheet by                 residential property lending restrictions, financial advice,
          rebalancing our portfolio                                  and consumer credit lending responsibilities
       –– Maintaining strong capital levels and a favourable       • Public policy development in New Zealand on issues
          position compared with global peers                        such as financial literacy, investor education and
       –– Stable balance sheet composition, managing funding         organised crime
          mix and asset tenor                                      • Financial crime risk management in Asia and the Pacific
       –– Consistent and diversified funding and liquidity
                                                                   ANZ has continued to engage constructively with
     • Operating environment                                       regulators, government and policy makers. We provided
       –– Managing to a more subdued revenue environment,          submissions to a number of government consultations
          balancing growth and return                              and parliamentary inquiries on topics such as:
       –– Strong, stable bank and banking systems                  • Financial advice; education and professional standards
       –– Regulatory changes and capital requirements              • Life Insurance
     Comment                                                       • The Impairment of Customer Loans
     ANZ recognises the importance of shareholder engagement       • Forestry Managed Investment Schemes
     and encourages shareholders to take an active interest in
                                                                   • Credit card interest rates
     the company. We seek to provide shareholders with quality
     information in a timely fashion through ANZ’s reporting of    • Foreign bribery
     results, the company’s Annual Report, Shareholder Review,     • Data Access
     announcements and briefings to the market, half-yearly        • New Zealand’s approach to organised crime
     newsletters and on our dedicated shareholder site at
                                                                   • Financial Advice in New Zealand
                                                                   • Restrictions on residential property lending
                                                                     in New Zealand
                                                                   • The Reserve Bank of New Zealand’s outsourcing policy
                                                                   We have also worked with regulators and enforcement
                                                                   agencies to share intelligence and help strengthen practices
                                                                   to remediate anti-money laundering and terrorism risks, exit
                                                                   high-risk customers, ensure compliance with sanctions and
                                                                   reduce fraud.
                                                                   Public submissions are available at the respective
                                                                   inquiry websites.


              INDUSTRY                                                         NON GOVERNMENT
              ASSOCIATIONS                                                     ORGANISATIONS (NGOs)

How we engaged                                                   How we engaged
• Participated in the development and implementation             • Direct engagement with relevant human rights,
  of the industry consumer protection reform program               consumer and environment NGOs
  in Australia                                                   • Regular engagement with peak bodies for professional
• Participated in industry discussions about sector issues         community services such as financial counselling
  and broad industry strategy                                    • Regular partnership meetings with community
• Participated on the Business Council of Australia’s (BCA)        organisations delivering MoneyMinded, Saver Plus
  climate change policy working group                              and MoneyBusiness programs
• Provided input into industry association responses to          • Engagement with NGOs providing oversight of key
  Parliamentary inquiries and government consultations             social commitments such as our Reconciliation Action
                                                                   Plan, Accessibility & Inclusion Plan and Financial
Key issues raised
                                                                   Inclusion Action Plan
• Conduct and culture in the Australian banking industry,
  including the handling of customer complaints, dispute         • A regular program of CEO and senior executive meetings
  resolution and remediation processes, the protection of          with civil society leaders to exchange ideas and discuss
  whistleblowers, and dealing with poor conduct                    material social, economic and environmental issues of
                                                                   mutual interest
• Remuneration including retail sales commissions and
  product-based payments/commissions                             Key issues raised
                                                                 • Climate change, carbon risk management and
                                                                   the role of banks in supporting the transition
In 2016 we engaged with industry associations, including           to a low carbon economy
the Australian Bankers’ Association (ABA) and the Financial
Services Council (FSC) to develop strategies for addressing      • ANZ’s provision of finance in the extractive and energy
industry reputation issues at a senior executive level and at      sectors, including coal and gas mining and coal-fired
a business level. ANZ joined with the other Australian banks       power generation
to develop and implement the industry reform program, a          • Finance to customers in ‘soft commodities’, such as sugar
comprehensive set of new measures to protect consumer              production and forestry in Asia and the Pacific, who are
interests, increase transparency and accountability and build      alleged by NGOs to have engaged in ‘land grabs’ or other
trust and confidence in banks.                                     human rights abuses
We have also contributed to the BCA’s climate change policy      • Customer hardship and consumer protection
working group to develop a revised policy platform for           • Strategies to tackle unemployment and build social
business to engage with governments who are working to             and economic participation
reduce emissions following the COP21 climate negotiations        • Remediation and compensation schemes in the
and ensuing Paris Agreement.                                       financial services sector
We provided input into the development of industry               • Challenges associated with homelessness
submissions including:                                             in Australian society
• Inquiry into Scrutiny of Financial Advice                      • How best to support people affected by family violence
• Inquiry into the Impairment of Customer Loans                  • Governance and strategic focus of our community
                                                                   investment approach
• Inquiry into Credit Card Interest Rates
                                                                 • Issues around the impact, scale and sustainability
• Productivity Commission Inquiry into Data                        of our financial inclusion programs
  Availability and Use
The current status of the actions we are taking to build
                                                                 Our response to the issues raised by NGOs can be
customer confidence and community trust under the
                                                                 found in the Fair and Responsible Banking, Social and
six-point Australian Bankers’ Association (ABA) plan can
                                                                 Economic Participation and Sustainable Growth
be found in the Fair and Responsible Banking chapter.
                                                                 chapters of this report.


                                        CORPORATE GOVERNANCE
                                         AND RISK MANAGEMENT

     Failure to manage our most material sustainability risks has the potential to erode
     community trust, ultimately impacting on our ability to do business.

     THE BOARD                                                       AUDIT COMMITTEE
     ANZ’s governance structure provides oversight of                The Audit Committee’s responsibilities include oversight
     the risks and opportunities arising from our activities.        and review of ANZ’s financial reporting principles and
     The Board is responsible for setting the direction,             policies, controls and procedures, and the effectiveness of
     strategies and financial objectives for ANZ and for             ANZ’s internal control and risk management framework.
     monitoring the implementation of those strategies
     and financial objectives.                                       HUMAN RESOURCES COMMITTEE
     The Board monitors compliance with regulatory                   The Human Resources Committee assists the Board in
     requirements, ethical standards and external commitments,       relation to remuneration matters and senior executive
     and the implementation of related policies. The Board also      succession, including for the Chief Executive Officer. Its
     oversees the effectiveness of workplace health and safety       responsibilities include reviewing the effectiveness of
     in the Group. The Board has delegated responsibility to the     ANZ’s Remuneration Policy and the approach taken in
     Environmental, Sustainability and Governance Committee          relation to diversity and inclusion. It also reviews the
     for reviewing and approving ANZ’s corporate sustainability      Annual Employee Engagement Survey Results and
     objectives and monitoring progress in achieving them.           Action Plan, and the cultural alignment with ANZ
     Ultimate responsibility for ANZ’s Corporate Sustainability      strategy and values.
     Framework and performance against it rests with
     the Board.
                                                                     DIGITAL BUSINESS AND
                                                                     TECHNOLOGY COMMITTEE
                                                                     The Digital Business and Technology Committee’s
                                                                     responsibilities include monitoring progress of, and
     The Environmental, Sustainability and Governance                approving and providing guidance on matters relating
     Committee, led by ANZ’s Chairman, is responsible for            to ANZ’s digital transformation information technology,
     ensuring an appropriate set of corporate governance             and technology-related innovation strategies.
     principles/arrangements are developed and maintained
     for application across ANZ. It approves ANZ’s Corporate
                                                                     EXECUTIVE OVERSIGHT
     Sustainability objectives and reviews progress in achieving
     them. In addition, it has responsibility for monitoring the     The Board has delegated to the Chief Executive Officer,
     effectiveness of ANZ’s approach to diversity to the extent      and through the Chief Executive Officer to other
     it relates to the Board, and reviewing and approving            senior management, the authority and responsibility
     measurable objectives for achieving gender diversity            for managing the everyday affairs of ANZ. The Group
     on the Board.                                                   Executive Committee is structured to make the most
                                                                     of diverse backgrounds and experience, ensuring a
                                                                     well-rounded and committed leadership team. The
                                                                     Board monitors management and its performance
     The duties of the Risk Committee include reviewing              on behalf of shareholders.
     reports from management concerning the implications
     of new and emerging risks.This may include reputational
     issues that arise from social and environmental impacts
     of our lending decisions. It also advises the Board on
     ANZ’s overall current and future ‘risk appetite’ and
     oversees management’s implementation of ANZ’s
     risk management strategy.


 CORPORATE SUSTAINABILITY                                                Our Reputation Risk Policy requires all employees
 AND DIVERSITY COMMITTEE                                                 and contractors to consider our reputation and the
                                                                         expectations of our stakeholders when making decisions
 The Corporate Sustainability and Diversity Committee
                                                                         about what business we will do and with whom. The Policy
 (CSD), chaired by the Chief Executive Officer, is responsible
                                                                         recognises that risks may arise from any of our products
 for leading the development of ANZ’s Group-wide
                                                                         and services, transactions, relationships, communications
 Sustainability Framework. The CSD provides strategic
                                                                         or strategies. Risks arising from all activities must be
 leadership on ANZ’s Corporate Sustainability risks and
                                                                         identified as part of regular assessment and escalated to
 opportunities, agenda, and monitoring progress against
                                                                         the appropriate level for decision. We use our Reputation
 our targets on a quarterly basis.
                                                                         Risk Radar tool to identify and monitor allegations of
 Our Corporate Sustainability targets and priorities, which              customer activities with potentially adverse social or
 cover our most material issues, are reviewed annually by                environmental impacts.
 the CSD and approved by the Environmental, Sustainability
                                                                         Regular screening informs who we do business with and
 and Governance Committee.
                                                                         what decisions we make. Where an existing customer is the
                                                                         subject of allegations, we investigate the issue and the RRC
 REPUTATION RISK COMMITTEE                                               considers the appropriate course of action.
 Executive leadership relating to reputational risk is
 provided by the Reputation Risk Committee (RRC). Chaired                OPERATIONAL RISK
 by our Chief Risk Officer, the RRC is responsible for assisting         EXECUTIVE COMMITTEE
 our businesses to manage reputational risk in relation to
                                                                         Executive leadership relating to operational risk and
 social, environmental, economic, business and regulatory
                                                                         compliance risk is provided by the Operational Risk
 issues. The RRC meets at least four times a year to approve
                                                                         Executive Committee (OREC). Compliance and Operational
 or decline products, transactions and activities that may
                                                                         Risk Frameworks define how we conduct our business
 give rise to reputation risk. It also approves principles,
                                                                         in accordance with applicable laws, regulations and codes
 policies, processes and guidelines for the management
                                                                         in the countries where we operate. Breaches of these
 of reputational risk.
                                                                         obligations are identified and escalated, as appropriate.


                                                                                                                Audit and Financial
                                     BOARD OF DIRECTORS                                                         Governance
                                                                                                                }} Internal audit
CEO                                                                                                             }} External audit
                               PRINCIPAL BOARD COMMITTEES                                                       }} Financial controls

                                                                                                               DIGITAL BUSINESS
                 AUDIT               SUSTAINABILITY              HUMAN RESOURCES             RISK
                                                                                                               AND TECHNOLOGY
               COMMITTEE            AND GOVERNANCE                  COMMITTEE              COMMITTEE

                                           GROUP EXECUTIVE COMMITTEE

                                            KEY MANAGEMENT COMMITTEES

                                                                    Group Asset           Global Markets
              Sustainability           Credit & Market                                                              Reputation
                                                                     & Liability          & Loans Product
               & Diversity             Risk Committee                                                             Risk Committee
                                                                    Committee               Committee

                                                     Operational                Credit Ratings
                       Capital Management
                                                    Risk Executive            System Oversight
                        Policy Committee
                                                     Committee                   Committee


                                                        OUR SUSTAINABILITY

     Each year we set public sustainability targets and a corresponding Group wide
     program of work to support the delivery of our business strategy and respond to
     our most material sustainability issues. Progress against our targets11 is reviewed
     by the Corporate Sustainability and Diversity Committee, chaired by our CEO,
     and twice a year by the Board Environmental, Sustainability and Governance
     Committee, led by our Chairman. Our 2017 targets, many of which are aligned
     with the United Nations Sustainable Development Goals, are outlined below.
     Performance against our 2016 targets is discussed throughout this report.


                                                              50%                                         35%                         15%
     This year we have achieved
     or made good progress
     against 85% of our targets.
                                                              Achieved                                    Partially achieved          Did not achieve
                                                                                                          or in progress


                        FAIR AND RESPONSIBLE BANKING

     Targets                                                                                               Relevant United Nations
                                                                                                           Sustainable Development Goals

     Implement our revised Human Rights Standards in 2017

     Apply a strengthened third party ESG screening process to all
     suppliers in high-risk countries,12 including ongoing monitoring
     of compliance with ANZ’s Supplier Code of Practice by 2017

     Create the best experience for our customers, measured by:
     • improving Net Promoter Score relative to peers (Retail, Commercial
       and large Corporate/Institutional customers, Aus & NZ)

     Improve customer cyber security awareness through pro-active
     engagement and provision of simplified cyber education materials
     and programs, reaching >60,000 customers in 2017

     11. Unless stated targets are at Group level.
18   12. High-risk countries are those that score


Targets                                                                                                  Relevant United Nations
                                                                                                         Sustainable Development Goals

Help enable social and economic participation of 1 million people through
our targeted inclusion programs by 2020 by:
• reaching >519,000 participants through delivery of MoneyMinded and
  Saver Plus, employment and community programs (coming off a baseline
  of >420,900 participants in financial inclusion programs up to end 2016)
• supporting >70,000 new small businesses through our ‘start up’
  banking packages

Register 240,000 customers for goMoney™ Mobile Phone
Banking in the Pacific by 2017 (cumulative total since
launch in 2013)

Build an engaged, diverse and inclusive workforce by:
• increasing the representation of Women in Management
  by 3% from 2015 to 2018
• extending flexible working policies in place for a minimum of 90%
  of ANZ geographies by 2018
• recruiting >1,000 under-represented groups including Aboriginal and
  Torres Strait Islanders, people with a disability and refugees by 202013
• improving employee engagement by 3% to 77% in 2019

Increase employee volunteering participation
rate in 2017 to 30%

                   SUSTAINABLE GROWTH

Targets                                                                                                  Relevant United Nations
                                                                                                         Sustainable Development Goals

Fund and facilitate at least $10 billion by 2020 in low carbon and
sustainable solutions including renewable energy generation, green
buildings and less emissions intensive manufacturing and transport

By 2017, reduce the direct impact of our business activities
on the environment by:14
• reducing absolute GHG emissions from premises energy by 1 to 3%
  (against a 2013 baseline) and maintaining carbon neutrality
• reducing paper consumption by 15% across material operations
  (against a 2013 baseline)
• expanding number of recycling programs across material
  commercial offices and establish a waste baseline
• applying eco-efficient design standards to improve water efficiency
  in our material branches and offices
• developing a weather and natural disaster property resilience strategy

13. This will also contribute to the ‘Help enable social and economic participation of 1 million people’ target.
14. All environment targets are three-year targets. Environmental reporting year is 1 July–30 June in line with Australian regulatory reporting year.   19

               FAIR AND

                             MATERIALITY REVIEW KEY THEMES

        Ethical, fair and responsible           Customers want their interactions        ANZ needs to protect customer
     conduct is critical to building trust      with the bank, whether they are in     privacy and prevent financial crime
      and confidence of stakeholders,           person, over the phone or digitally,        as it responds to advances
      and maintaining a social licence                      to be easy.                   in technology and disruptive
                  to operate.                                                                     business models.


                                        CUSTOMER TRUST

The values and behaviours of our people, combined with our standards, policies
and procedures, are critical to meeting our goal of delivering fair and transparent
banking services.

                                                          Recognising that we have not always met the standards
                                                          expected of us by the community, most notably in Australia,
   “ANZ STANDS FOR SIX IMPORTANT                          this year we commenced a purpose- and values-led
     PRINCIPLES AGAINST WHICH                             transformation of the bank, seeking to create a stronger
       WE SHOULD BE JUDGED:                               sense of core purpose, ethics and fairness.
                                                          We have been defining the attributes and capabilities that
                                                          our leaders will need in order to embed our purpose. Our
     We should offer services that are easy
                                                          leadership training and development programs will be
     to understand, competitively priced and
                                                          reviewed to ensure they focus on the key leadership skills
     designed to meet customers’ needs
                                                          and behaviours that will deliver the cultural shift required
                                                          to transform the bank.

     We need to ensure customers get the right            This period of cultural transformation is occurring
     products for their individual circumstances          simultaneously with a technological transformation of
                                                          the banking sector, which is redefining our business and
                                                          customer expectations. Political, social and regulatory
                                                          expectations of banks are also evolving. Failure to meet
     When customers get into difficulty, or when
                                                          those expectations puts at risk our social licence to operate.
     we fail them, it is our responsibility to work
                                                          Stakeholders expect us to understand and manage
     with them to find a fair and balanced resolution
                                                          the social and environmental impacts of our business
                                                          operations — encompassing everything from who we
                                                          lend to, who we source our goods and services from
     We should be quick to fix mistakes and               and how we treat our employees.
     stop them happening again
                                                          TRANSPARENT FEES AND CHARGES

     When making decisions that affect our                Stakeholders expect us to be transparent about how we
     customers, we need to explain them clearly           make decisions on the fees associated with our products
                                                          and services. Easy to understand product disclosure,
                                                          including information about the fees and charges which
                                                          may be applied, is vital to ensuring that customers
     We need to ensure that our culture, systems          are able to choose the most appropriate products for
     and processes are aligned to produce the             their circumstances.
     right results for customers.”
                                                          Certain fees we charge customers have recently been
   Shayne Elliott, CEO — 5 October 2016, House of         the subject of litigation in Australia. Class actions were
 Representatives Standing Committee on Economics.         commenced against ANZ, challenging certain ‘exception
                                                          fees’ charged by the bank. In July this year, the High Court
                                                          found in ANZ’s favour deciding that ANZ’s late payment
                                                          fees were lawful. In addition, ANZ’s honour, dishonour
                                                          and over limit fees had earlier been found to be valid by
                                                          the Full Federal Court, which also stated that “there was
                                                          no lack of good faith by ANZ…no dishonesty, no trickery,
                                                          no victimisation, predation or taking advantage of the
                                                          applicants. The fees were fully and not unfairly disclosed”.



     The Australian Securities and Investments Commission          In November this year ANZ announced that a settlement
     (ASIC) has brought actions against ANZ and two of             had been agreed with the ACCC in relation to conduct
     our peers in relation to certain transactions in the          in 2011 associated with certain foreign exchange
     Australian interbank market, known as the Bank Bill           contracts for the Malaysian Ringgit. ANZ has
     Swap Rate (BBSW) market, over the period from March           acknowledged that three Singapore-based employees,
     2009 to December 2012. Following on from the ASIC             who have since left ANZ, engaged in conduct that
     proceedings, a class action relating to bank trading          contravened Australia’s Competition and Consumer
     and BBSW was launched in the United States against            Act. As part of the resolution with the ACCC, ANZ
     two international broking houses and 17 global banks,         has agreed to a $9 million penalty which is subject
     including ANZ. ANZ is defending the actions.                  to Court approval.
     Since 2014, ASIC and the Australian Competition and
     Consumer Commission (ACCC) have been investigating
     foreign exchange trading conduct of various banks,
     including ANZ. ANZ expects the ACCC to confirm that
     it has concluded its investigation and will not take
     further action. ASIC’s investigations are ongoing.


     Together with our Australian banking peers, earlier this      We will use the findings of the Review, which is due to
     year we announced a program of reform initiatives aimed       report by March 2017, to examine our own remuneration
     at lifting bank standards in order to regain customer         framework to ensure that there is alignment between
     confidence and trust. Implementation is being overseen        remuneration and incentives and customer outcomes.
     by an independent expert, with quarterly public reports
                                                                   During 2016, we have:
     on progress.
                                                                   • Improved the repayment options available for
     These reform initiatives are intended to make it easier for
                                                                     our customers experiencing financial hardship
     customers to do business with banks and to give people
     confidence that when things go wrong, their bank will         • Trained frontline employees on empathy and
     do the right thing. We are working with our industry on         identifying issues such as family violence and
     improving remuneration and incentives, whistleblowing,          elder abuse
     complaints handling, customer hardship and the Banking        • Advocated for a last resort compensation scheme, to be
     Code of Practice.                                               funded by the financial advice industry, which will assist
                                                                     victims of poor financial advice
     With regard to remuneration, an independent review has
     been established examining product sales commissions          • Strengthened our whistleblowing policy, making it
     and product-based payments for bank staff or third              easier for employees and contractors to raise concerns
     parties selling bank products, including deposits,              on issues such as unethical or dishonest conduct and
     mortgages, credit cards, general insurance products and       • Supported broadening of small business access to
     small business lending. The Sedgwick Review aims to             external dispute resolution, as a cheaper and simpler
     identify whether these payments should be removed               alternative to the courts.
     or changed in order to improve customer outcomes.


A suite of policies detail expectations of all our employees      “ETHICAL AND FAIR CONDUCT MUST
regarding their behaviour, both internally and externally.
                                                                   BE AT THE HEART OF EVERYTHING
Policies are regularly reviewed to ensure they reflect any
changes in legislative requirements, and include:                      WE DO. HOW WE TREAT OUR

• ANZ Anti-Money Laundering and Counter-Terrorism                  CUSTOMERS, EMPLOYEES AND THE
  Financing Policy                                              COMMUNITIES IN WHICH WE OPERATE
• ANZ Economic and Trade Sanctions Policy                               SPEAKS TO THE VALUES WE
• ANZ Use of Systems, Equipment and Information Policy                HOLD AS AN ORGANISATION.”
• ANZ Fraud Policy
                                                                                  Shayne Elliott, CEO
• ANZ Expense Policy
• ANZ Equal Opportunity, Bullying and Harassment Policy
• ANZ Health and Safety Policy
• Conflict of Interest Policy                                  WHISTLEBLOWER POLICY
• Trading in ANZ Securities Policy                             ANZ actively encourages openness, integrity and
• Trading in Non-ANZ Securities Policy                         accountability. Our Whistleblower Protection Policy (WPP)
                                                               provides a means by which our employees and contractors
• ANZ Anti-Bribery and Anti-Corruption Policy
                                                               can raise concerns regarding actual or suspected
• ANZ Whistleblower Protection Policy                          contraventions of our ethical and legal standards, without
All ANZ employees and contractors are required to              fear of repercussions. We appointed Country CEOs and
complete the ANZ Essentials training course. The               Business Unit Heads to undertake the role of Whistleblower
course is divided into:                                        Protection Champion, to provide employees with
                                                               information about the policy, including who to contact
1. Living the Code,                                            should they wish to make a complaint.
2. Equal Opportunity Essentials,
                                                               Employees raising a complaint through the WPP process
3. Compliance (Compliance Essentials, Anti-Money               have a number of channels available including internally
   Laundering, Operational Risk Essentials) and                through a Whistleblower Investigations Officer, and
4. Preventing Fraud, Bribery and Corruption.                   externally via confidential phone, email and web-based
                                                               mechanisms, operated by a third party. Where the
The Living the Code course reinforces the importance
                                                               whistleblower has concerns about the resolution of the
of our values and ethics and seeks a declaration of
                                                               matter, an escalation avenue to the Chief Compliance
compliance with our Code of Conduct and Ethics.
                                                               Officer is available.
By completing ANZ’s Living the Code course, participants
are confirming they understand the Code’s principles and       This year we have strengthened our policy so that
have complied with them over the previous 12 months.           whistleblowers are kept better informed on the progress and
In 2016, 98% of our employees and contractors completed        outcomes of the disclosure they have made. We have also
the training.                                                  extended protections to those assisting with investigations.
                                                               In addition, we have explicitly stated in the policy that
CODE OF CONDUCT AND ETHICS                                     employees and contractors have the right to contact
                                                               regulators at any time to raise concerns on matters such
It is a requirement that all ANZ employees comply with         as unethical or dishonest conduct. We have also made
our Code of Conduct and Ethics. This applies equally to        it easier for our people to report a matter by developing
employees who are permanent or temporary, contractors          a Quick Response code, so for those with smart phones,
and consultants. Our Code of Conduct and Ethics                they can simply scan the code and submit a report.
comprises eight guiding principles that set the standards
for the way we do business at ANZ.                             Reports under our WPP in 2016 remained steady with
                                                               71 reports (2015: 72). The majority of the reports did
In 2016, there were 1,408 alleged breaches of our Code         not uncover any significant issues. In those cases where
of Conduct and Ethics across our operations, down              our policies were breached, we took appropriate action,
from 1,629 alleged breaches in 2015. Breaches ranged           including dismissal.
from conflict of interest through to allegations of fraud,
bullying, discrimination and email misuse. Outcomes
following investigations of breaches this year included        FRAUD
133 resignations, 254 terminations and 1,021 warnings.         ANZ’s Fraud Policy establishes a consistent understanding
Breaches of the Code of Conduct and Ethics are reported        of fraud across our business. It outlines each person’s
to the Environmental, Sustainability and Governance            responsibilities to prevent and detect fraud and how
Committee and form part of regular risk reporting to the       to report suspected or actual fraud. The policy directs
Operational Risk Executive Committee.                          that all instances of fraud (whether internal or external)
                                                               must be reported in accordance with defined
                                                               reporting requirements.

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