WHAT’S THE DIFFERENCE? CORPORATE RESPONSIBILITY REPORT 2007

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g erin deliv INTRODUCTION ABOUT THIS PUBLICATION ANZ is one of four major Australian-based This publication ‘What’s the Difference?’ banks and is the largest bank and is ANZ’s third annual Corporate company in New Zealand. Headquartered Responsibility (CR) Report. It focuses in Melbourne, ANZ’s Australian on our performance against the publicly operations began in 1835 and its stated goals from our 2006 CR Report New Zealand operations in 1840. (see www.anz.com/cr2006) and CR issues material to our business As at 30 September 2007, ANZ has and stakeholders. total assets of $392.6 billion and shareholders’ equity of $22 billion. This Report complements our summary We have a market capitalisation of report and covers our Australian, approximately $55.4 billion and are New Zealand and Asia Pacifi c the fi fth largest Australian company banking operations for the year to by market capitalisation listed on the 30 September 2007. Australian Stock Exchange. We have used the Global Reporting We operate in 31 countries worldwide Initiative G3 guidelines and the fi nance with the majority of our operations in sector social and environmental Australia and New Zealand. This year supplement as a reference in the we announced a new Asia Pacifi c preparation of these publications. division to refl ect the growing The Corporate Citizenship Company importance of the region to ANZ. has provided an external assurance To support its strategy, ANZ has had statement in keeping with the a consistent focus on key areas: International Standard on Assurance the quality of its people and culture; Engagements ISAE 3000 and AA1000 its customers; and the communities Assurance Standard. in which it operates.

Chairman’s message 4 Stakeholder engagement 18 New Zealand 85 CEO’s message 5 Section 1 People 19 Asia Pacifi c 92 2007 Performance summary 6 Section 2 Customers 34 Our performance 95 Profi le 11 Section 3 Community 54 Recognition 97 Corporate responsibility 14 Section 4 Environment 73 Assurance 98 governance and supply chain More information & Contacts 103 ANZ CORPORATE RESPONSIBILITY REPORT 2007 2 ‘Leading a responsible business is personally important to me…

The nature of our business means we will potentially become involved in clients and transactions that raise controversial issues. Clarifying and understanding our role in these circumstances is part of being a responsible corporation…

Our role is to work with our clients, helping them to pursue their goals and improve their social and environmental performance. In some cases, where a client’s commitment does not seem evident, we must be prepared to discuss why and whether our relationship is sustainable.’

MICHAEL SMITH, CHIEF EXECUTIVE OFFICER CHAIRMAN’S MESSAGE

This Report is concerned with our responsibilities to all our stakeholders: our staff, our customers, the community, the environment and our shareholders.

It reviews our progress in these areas and We are involved in the global response sets new targets for the future and we are to climate change, assisting our clients pleased that we have made signifi cant to understand and manage the risks progress in 2007. We are embracing the and opportunities. While our own challenges and seeking innovative ways environmental footprint is not signifi cant, to address them. Our aim is to be a we are making progress in reducing the respected, responsible corporate citizen Bank’s direct impact and this is receiving that recognises and constructively considerable attention in the plans for faces up to our responsibilities to all our new offi ce at Docklands in Victoria. of our stakeholders. We have had another solid year for our Our people are becoming more engaged shareholders with a higher profi t and with our corporate responsibility agenda. higher dividends. We have plans to Our fi nancial literacy programs are continue to be a satisfactory investment assisting thousands of vulnerable for our shareholders in the future. Australians. We are lowering our lost This year the Board supported the OECD time injury frequency rate, responding Guidelines for Multinational Enterprises to the needs of an increasingly diverse as a framework to help us further workforce, focusing on increasing the develop our corporate responsibility number of women in leadership approach. The commitment to the positions and building employment Guidelines will be refl ected in the Bank’s opportunities for Indigenous Australians. policies and practices. I anticipate the We have continued to focus on the needs Guidelines will be particularly useful as of our customers and our retail customer we expand our existing interests and satisfaction score remains high. pursue new opportunities in Asia. The Equator Principles have become On a fi nal note, we are very pleased that a standard part of our assessment we were assessed as the leading bank of project fi nance proposals and are globally on the Dow Jones Sustainability providing a useful framework for Index. This provides recognition of the our consideration of social and efforts of our staff to create a successful environmental issues in other parts and responsible corporation. of our Institutional business.

CHARLES GOODE CHAIRMAN

ANZ CORPORATE RESPONSIBILITY REPORT 2007 4 CHIEF EXECUTIVE OFFICER’S MESSAGE

Leading a responsible business is personally important to me.

I have been with ANZ for about a month We must balance a diverse range of at the time of this report’s preparation. responsibilities, especially to our people, It is clear that much has been achieved customers and shareholders. Our work in ANZ’s core markets of Australia and will be guided by considerations New Zealand: including community sentiment, the ■ A great culture and workplace policies decisions and policies of governments that support it and regulators, and the views of social and environmental interest groups. ■ A strong focus on retail customer service and responsible lending standards Our most important role is to work with ■ Innovative programs to improve fi nancial our clients, helping them to pursue literacy their goals and improve their social and environmental performance. In some I have also been impressed by the cases, where a client’s commitment genuine connection between our does not seem evident, we must be employees – particularly our branch prepared to discuss why and whether network – and their local communities. our relationship is sustainable. These themes are on the right track and We are also growing in Asia. We have have created a very strong foundation our own operations and joint ventures for the bank. and we are looking for the right As we prepare for our next phase, we are opportunities to expand our presence deeply conscious that doing business, there. Some of the governance and especially with larger corporate clients, standards in these markets are quite is becoming increasingly complex. Many different to what we expect in our forces are at play. These include social, “home” markets. I believe we can and ethical and environmental considerations, will play, over time, an important role in as well as the more familiar and direct contributing to the further development concerns of an economic, fi nancial and of these standards and the fi nancial industrial character. services sector in the region. The nature of our business means we will I want to thank you for your support for potentially become involved in clients ANZ. I hope you will stay engaged in our and transactions that raise controversial journey and assist us in providing true issues. Clarifying and understanding leadership in responsible business our role in these circumstances, and management in the coming years. acting accordingly, is part of being a responsible corporation.

MICHAEL SMITH CHIEF EXECUTIVE OFFICER

ANZ CORPORATE RESPONSIBILITY REPORT 2007 5 PUTTING OUR CUSTOMERS FIRST

2007 Performance summary

GOAL COMMENTARY PERFORMANCE

Continue to improve our ANZ’s retail customer satisfaction at 77.2% (September 07) continues to lead major bank Partially achieved customer satisfaction and peers in Australia according to the Roy Morgan Finance Monitor. Overall our customer match the performance of satisfaction has increased by 1.7% since September 2006, and is 4.7 points higher than community and regional the average for major banks. Against the regional banks, ANZ continues to perform well but banks is 15.4 points behind the regional bank leader in customer satisfaction.

Meet or exceed the We met or exceeded the performance standards on the majority of our Customer Partially achieved performance standards set Charter promises. Signifi cant efforts to improve our performance on fast account openings out in our Customer Charter in Mortgages resulted in 98.5% of standard home loan applications being answered in two working days, up from 96.1% in 2006.

Maintain our position as ANZ continues to perform strongly in the large corporate and institutional banking market in Achieved Number 1 Lead Bank for Australia and New Zealand. ANZ maintained or gained leadership in 11 measures including Major Corporate and No.1 Most Trusted Adviser according to research of Treasurers and Chief Financial Offi cers Institutional clients conducted by Peter Lee Associates.

Develop and implement We developed and conducted extensive consultation on our draft Forests Policy, the fi rst in a Did not achieve social and environmental series of sector-specifi c policies designed to provide greater consistency in the integration of management policies for social and environmental factors into our lending and business decisions. ANZ Institutional forestry, mining and energy Division is engaged in a fi nal round of stakeholder discussions prior to fi nalising the Policy. for our Institutional business Policies on water, mining and energy are being developed and will be the subject of stakeholder consultation in 2008.

Implement the Equator Since we adopted the Equator Principles in December 2006, we have reviewed 26 projects Partially achieved Principles across our Project for social and environmental impact under the Principles and approved 16. Projects did not Finance business proceed for a range of reasons, including their inability to meet the Principles. Equator Principles training has been provided to 75% of our Project Finance staff in Melbourne, Sydney, Hong Kong and Singapore. Further work is being undertaken to implement a specifi c Equator Principles toolkit, training program and reporting process across our global Project Finance business.

CUSTOMER SATISFACTION % 2008 GOALS

85 ■ Continue to improve our retail ■ Maintain our position as the Number

80 customer satisfaction and match 1 Lead Bank for major Corporate and the performance of community and Institutional clients 75 regional banks ■ Achieve Equator Principles reporting 70 ■ Meet or exceed the performance for 100% of ANZ’s Project Finance standards set out in our Customer transactions 65 Closest major Charter and conduct a review of its peer ■ Implement Institutional social and 60 commitments environmental lending policies for 55 ■ Implement a new Personal Division forests, mining, energy and water SEP 96 SEP 07 policy and processes to assist retail ANZ Peer banks Regional banks customers facing fi nancial diffi culty Source: Roy Morgan Research – Aust MFI Pop’n aged 14+, % Satisfi ed (Very or Fairly Satisfi ed), 6 mth moving average

ANZ CORPORATE RESPONSIBILITY REPORT 2007 6 CREATING VALUE FOR OUR SHAREHOLDERS

2007 Performance summary

GOAL COMMENTARY PERFORMANCE

Achieve annual revenue We achieved revenue growth of 9.7% and a record profi t of $4,180 million for the year ended Achieved growth of 7 to 10% 30 September 2007, up 13.3% on the previous year. Cash earnings per share (excluding non-core items) were 210.3 cents, up 8.1%. Total Shareholder Return was 15.6%.

Over time reduce our We reduced our cost-to-income ratio from 45.6 to 44.8%, while continuing to invest in the Partially achieved cost-to-income ratio to 40% business. This investment is consistent with our long-term approach to reduce our cost-to- income ratio by maintaining revenue growth in excess of expense growth rather than merely cutting costs.

IMPROVING OUR GOVERNANCE

GOAL COMMENTARY PERFORMANCE

Address the fi ndings of In April 2007, the ANZ Board supported the OECD Guidelines for Multinational Enterprises Partially achieved the independent human as a comprehensive framework for the integration of responsible practices across our business. rights review conducted in We have made strong progress in addressing the fi ndings of the independent review of our 2006 and make a public business against the Guidelines. Signifi cant achievements included the launch of ANZ’s commitment to one or more Disability Action Plan and the development of our People Charter, containing specifi c human human rights instruments rights commitments and performance indicators. More work is required to integrate the during 2007 guidelines into our due diligence procedures for joint ventures and acquisitions.

SHARE PRICE AND DIVIDEND PERFORMANCE BY YEAR 2008 GOALS

150 30 ■ Examine how best to build relevant social and environmental criteria into joint 25 120 venture due diligence processes 20 ■ Achieve Disability Action Plan employment 90 and banking access targets 15

60 10

30 5 1997 2007

Dividend (cents) Share price (A$)

ANZ CORPORATE RESPONSIBILITY REPORT 2007 7 LEADING AND INSPIRING OUR PEOPLE

2007 Performance summary

GOAL COMMENTARY PERFORMANCE

Reduce our Lost Time Injury ANZ achieved its goal of a 20% reduction in Australia’s Lost Time Injury Frequency Rate Achieved Frequency Rate (LTIFR) by a (LTIFR) from 3.8 in September 2006 to 3.0 in September 2007. further 20% in Australia and In New Zealand, as a result of improved data, the LTIFR for 05/06 has changed from New Zealand 1.5 to 3.6. The LTIFR for 06/07 is 1.6 resulting in a 56% reduction. The New Zealand LTIFR is calculated using only LTIs that become a workers’ compensation claim.

Close the gap on pay Following the 2006/07 Remuneration Review the weighted average differential between Partially achieved differential between men male and female management salaries in Australia has improved from 3.1% in favour of and women at all levels males to 2.6% in favour of males. For all Australian employees, the weighted average differential has moved from 0.4% in favour of males to 0.2% in favour of females.

Improve our performance Eighty-seven per cent of staff participated in our annual Engagement and Culture Survey. Achieved on the ANZ Engagement and Employee engagement increased from 60 to 64%, solidly above the Australasian fi nancial Culture Survey services sector benchmark of 58%.

Achieve our 2007 targets We continue to focus on achieving our three year targets for women in management. Did not achieve for women in management While the percentage of females in executive positions increased from 20% in September roles including 24% female 2006 to 22% at the end of September 2007, we did not achieve our target of 24%. executives Our programs and initiatives to advance women within our organisation were again acknowledged by Equal Opportunity in the Workplace Agency which recognised ANZ as an Employer of Choice for Women for the sixth consecutive year.

Employ 50 Indigenous We have 35 Indigenous school-based trainees including eight in metropolitan Sydney and Partially achieved Australians, as part of our the remainder in rural New South Wales and Western Australia. By December 2007 we plan Indigenous Employment to have 81 additional Indigenous school-based trainees in Regional and Rural Banking and Strategy 50 in Retail Banking. We also announced the most signifi cant Indigenous employment targets of any Australian company as part of our Reconciliation Action Plan. This includes the recruitment of at least 300 young Indigenous trainees by 2009 and the promotion of 20 Indigenous employees on merit to ANZ management positions by 2014.

ANZ EMPLOYEE ENGAGEMENT* 2008 GOALS

60 60 64 ■ Achieve our targets for women in ■ Improve our performance in the ANZ management Engagement and Culture Survey ■ Close the gap on pay differential ■ Employ 100 Indigenous Australians, between men and women at all levels as part of our Indigenous employment of the organisation strategy Financial Services Benchmark ■ Reduce our Lost Time Injury Frequency

* The ANZ Culture and Rate (LTIFR) by a further 20% in Australia 04 06 07 Engagement Survey was and New Zealand and report performance not conducted during 2005. globally

ANZ CORPORATE RESPONSIBILITY REPORT 2007 8 EARNING COMMUNITY TRUST

2007 Performance summary

GOAL COMMENTARY PERFORMANCE

Enable 1,500 people to ANZ’s Saver Plus matched savings and fi nancial literacy program is running in 19 locations Partially achieved participate in Saver Plus, and with 1,385 new participants this year. Research shows that 75% of participants from the reach 20,000 people through initial pilot continue to save the same amount or more one to two years after completing MoneyMinded the program. A total of 22,458 people participated in our MoneyMinded fi nancial education program this year. An additional 1,040 facilitators were trained to deliver MoneyMinded throughout Australia. We also extended the reach of the program, launching fi ve online courses and a monthly newsletter for MoneyMinded subscribers.

Achieve 60,000 hours of This year, 27% of all ANZ staff contributed a total of 73,098 hours of volunteering as part Achieved staff volunteering and of our ANZ Volunteers program. 15% participation in Fifteen per cent of Australian and 11.6% of New Zealand employees participated in our workplace giving workplace giving programs – Community Giving and the New Zealand Staff Foundation. Their contributions were matched dollar for dollar by ANZ, in total providing $1,108,733 in funding for more than 100 community organisations.

Evaluate the Progress Loans Progress Loans has been extended to two more locations around Melbourne following Partially achieved Victorian pilot and extend the completion of the initial 12-month pilot in May this year. We have deferred further the program to three expansion to other States pending recommendations from the full evaluation of the pilot additional States, writing program, including its social impact, which will be released in early 2008. at least 200 new loans In 2007, 245 applications for Progress Loans were received with 165 (67%) being approved for a total lending value of $288,260. The average loan size was $1,796.

Work with Indigenous We launched our Reconciliation Action Plan in April and achieved our commitments for 2007. Achieved organisations and other The Plan includes the most signifi cant Indigenous employment targets of any major Australian stakeholders to develop and company and a focus on improving fi nancial literacy and inclusion amongst Indigenous implement a Reconciliation Australians. Action Plan.

ANZ’S COMMUNITY INVESTMENT 2008 GOALS

Types of Contributions ■ Release ANZ’s bi-annual fi nancial ■ Achieve 70,000 hours of staff Cash $10,737,964 literacy research volunteering across the Group and 15% participation in payroll giving Time (volunteering) $3,335,940 ■ Meet our fi nancial literacy and inclusion program targets: enable 1,500 people to ■ Achieve the commitments in our In-kind $2,443,766 participate in Saver Plus, reach 30,000 Reconciliation Action Plan including Management costs $1,292,417 people through MoneyMinded and staff training, fi nancial literacy and Total contributions* $17,810,087 achieve 300 Progress Loans participants assisting to build the capacity of

* According to London Benchmarking Group methodology. Indigenous organisations

ANZ CORPORATE RESPONSIBILITY REPORT 2007 9 MANAGING OUR ENVIRONMENTAL IMPACT AND SUPPLY CHAIN

2007 Performance summary

GOAL COMMENTARY PERFORMANCE

Achieve our target to reduce We met or exceeded our two-year targets to reduce electricity and paper consumption, Partially achieved our environmental footprint greenhouse gas emissions and waste by 5%. We did not meet our water reduction target. by a minimum of 5% by 2007

Continue to improve supply One hundred and seventy suppliers have completed our supplier self-assessment tool (an Achieved chain reporting and expand increase of 70 from the previous year) and 90% of tenders for ANZ goods and services have the reach of our Sustainable included sustainability criteria. Procurement Policy New sustainable sourcing standards were introduced to support our Sustainable Procurement Policy and guide purchasing decisions. These cover printed matter and offi ce paper. We customised our supplier self-assessment tool to suit the needs of large and small businesses. Data from completed assessments will be aggregated and reported in 2008.

Engage with internal and We established new two-year environmental performance targets to achieve a 5% reduction Achieved external stakeholders in electricity and water usage per Full Time Equivalent (FTE) and a 10% reduction in paper to establish ANZ’s purchased and waste to landfi ll per FTE. The targets were set following an international review environmental performance of current and emerging practices in environmental management amongst leading fi nancial targets for 2008–2010 institutions and other sectors globally, together with engagement with our key environmental stakeholders in Australia and New Zealand. The new targets will also be refl ected in our updated Environment Charter which will be released next year.

PERFORMANCE AGAINST TWO-YEAR GOALS 2008 GOALS

Electricity ▲ ■ Work towards our two-year goals to: ■ Ensure sustainability clauses are Paper ▲ achieve a 5% reduction in electricity included in 100% of tenders issued Water ✖ and water usage per FTE; achieve a 10% by our Sourcing Alliances team Waste and recycling ▲ reduction in paper purchased and waste ■ Review our sustainable procurement to landfi ll per FTE; and become carbon Greenhouse gas emissions ▲ policy, develop sector-specifi c social neutral in Australia and New Zealand by Key: Achieved ▲ and environmental standards for the end of 2009 Did not achieve ✖ our suppliers and audit suppliers’ ■ Increase the number of suppliers performance against these standards undergoing detailed social and environmental screening by 50%

ANZ CORPORATE RESPONSIBILITY REPORT 2007 10 PROFILE

ABOUT ANZ ANZ is also subject to oversight by PERSONAL ANZ is one of the fi ve largest and most the Australian Transaction Reporting ANZ’s Personal Division comprises the successful companies in Australia, the and Analysis Centre (AUSTRAC), retail branch network, Regional, Rural leading bank and largest company in Australia’s anti-money laundering and and Small Business Banking, Banking New Zealand, the leading bank in the counter-terrorism fi nancing regulator Products, Mortgages, Consumer Finance, South Pacifi c and Australia’s leading and fi nancial intelligence unit. Investments and Insurance and Esanda. bank in Asia. ANZ shares and related Australian competition laws are It is Australia’s second largest retail securities are listed on the Australian administered by the Australian bank (Roy Morgan Research – Traditional and New Zealand exchanges. Competition and Consumer Commission Banking Products 12-month average Our businesses serve more than fi ve and ANZ is also subject to regulation to June 2007) with approximately 19% million customers and we employ more under State law in relation to consumer market share. ANZ has approximately than 37,000 people. We are represented lending and fair trading. 14% market share in mortgages (APRA in our primary markets of Australia and ANZ National Bank Limited operates statistics September 2007), 20% in New Zealand, as well as Asia, the Pacifi c, under Conditions of Registration set by credit cards (APRA statistics September the United Kingdom, Europe and the the Reserve Bank of New Zealand (RBNZ), 2007) and 13% household deposits United States. which has a supervisory function to (APRA statistics September 2007 and ANZ Banking Products Cash Management Our history dates back to 1835, and encourage the soundness and effi ciency Trust account research). the values we live by today are helping of the fi nancial system as a whole. INSTITUTIONAL to build a strong future for our business, ANZ National is subject to competition shareholders, staff, customers and laws contained in the Commerce Act ANZ Institutional encompasses communities. We also make every effort which is administered by the Commerce businesses providing a full range of to achieve and maintain the highest Commission, as well as legislation fi nancial services to ANZ’s corporate and standards of corporate governance regulating consumer lending and institutional customers across the globe. and continuous disclosure obligations fair trading. Its businesses include Working Capital to our shareholders. Solutions, Markets, Corporate and BUSINESS STRATEGY AND STRUCTURE REGULATION Structured Financing, Business Banking, ANZ operates a series of specialist and Financial Institutions. ANZ is authorised to operate as a bank businesses in key segments: Personal, by the Australian Prudential Regulatory Institutional, Wealth Management and ANZ Institutional Division in Australia Authority (APRA), the Australian Private Bank, and its major geographic and New Zealand holds the No 1 lead prudential regulator responsible for businesses in New Zealand and Relationship bank status (Peter Lee maintaining the stability and safety Asia Pacifi c. Associates, 2007) with 37% lead of the Australian fi nancial system. customer market penetration. ANZ’s future focus will be on sharpening ANZ holds an Australian Financial our performance in the intensely Services Licence, issued by the competitive markets of Australian Australian Securities and Investments and New Zealand while building on Commission (ASIC), which carries the growth opportunities in Asia. minimum standards relating to disclosure, advice and adviser training. As the fi nancial services regulator, ASIC licenses and monitors fi nancial services businesses to ensure that they operate effi ciently, honestly and fairly.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 11 PROFILE CONTINUED

NEW ZEALAND ASIA PACIFIC PRIVATE BANK Our New Zealand business is conducted Asia Pacifi c is a newly created Division Private Bank manages the top one per across similar business units to Australia, covering ANZ’s representation in the cent of ANZ’s individual client base, encompassing Retail Banking, Mortgages, Asian region including Greater China, specialising in providing clients with a Consumer Finance, Private Bank, Rural, Indonesia, Japan, Korea, Malaysia, complete range of fi nancial solutions. Small Business Banking, Corporate and the Philippines, Singapore, Thailand ING AUSTRALIA Commercial, UDC (a fi nance company) and Vietnam and retail networks in and Central business units. 12 countries across the Pacifi c region. ANZ has a joint venture with ING Group The International Partnerships business which provides integrated manufacture ANZ National Bank Limited has in this Division is responsible for and distribution of wealth creation, approximately 35% of total customer developing new and existing partnerships management and protection products market share, and is the leading player with local banks across Asia. and services. in most market segments of the New Zealand banking market. ANZ has strong market share in the major Pacifi c retail markets of Fiji (44%), Papua New Guinea (37%), Vanuatu (51%) and Samoa (50%).

Australia Other New Zealand NPAT $82m Asia Cambodia China Hong Kong Indonesia Japan Korea Asia Laos Malaysia NPAT $171m Philippines Singapore Taiwan Thailand Vietnam Pacifi c American Samoa Cook Islands East Timor Fiji Pacifi c Guam NPAT $121m Kiribati New Caledonia Papua New Guinea Samoa Solomon Islands Australia Tonga NPAT $2,889m Vanuatu India Europe United Kingdom United States of America New Zealand NPAT $917m

ANZ CORPORATE RESPONSIBILITY REPORT 2007 12 PROFILE CONTINUED

ECONOMIC PROFILE This year has seen another solid fi nancial ANZ’s EVG&D information is derived from In 2007, direct economic value generated performance from ANZ. Our profi t was up our audited fi nancial statements and was $30,293 million and total economic 13% to a new record of $4,180 million, community investment fi gures calculated value distributed was $27,957 million. and we increased our 2007 dividend by using the London Benchmarking Group 9% to 136 cents per share. methodology.

However, the economic contribution we ECONOMIC VALUE GENERATED AND DISTRIBUTED (2007) make to society is more than fi nancial COMPONENTS $M profi ts. We create jobs, pay salaries and invest in the skills of our people. We also Direct economic value generated: Revenues 30,293 pay taxes in the countries where we Total direct economic value generated: 30,293 operate, support business in our supply Economic value distributed: chain and provide products that satisfy Operating costs 1,962 the needs of our customers. Employee wages and benefi ts 2,991 Economic value generated and distributed Payments to providers of capital 21,308 (EVG&D), as defi ned in the Global Payments to government 1,678 Reporting Initiative’s Sustainability Guidelines (G3), provides a basic Community investments 18 indication of how an organisation has Total economic value distributed: 27,957 created wealth for stakeholders. Economic value retained/reinvested: 2,336

TOTAL TAX CONTRIBUTION In 2006, ANZ participated in a Total Tax AUSTRALIAN TAXES BORNE AND COLLECTED BY CATEGORY1 Contribution Survey in conjunction with ($AUS m) 2007 2006 the Business Council of Australia and the Income Taxes 1431.5 Corporate Tax Association. The Survey 1005.3 provided a framework to enable the Goods & Services Taxes 115.7 collection and publication of information 83.8 based on taxes paid and taxes collected. Employment Taxes 549.2 ANZ has used this framework to 513.6 communicate our economic tax Property Taxes 339.3 contribution, manage tax-operating risk 287.7 and optimise our tax strategy to create shareholder value. Further, a disclosure Environment Taxes 0.4 of this kind supports our tax strategy, 0.3 being to maintain a low-risk tax appetite and a transparent tax culture. NEW ZEALAND TAXES BORNE AND COLLECTED BY CATEGORY1 During 2007, taxes borne in Australia ($AUDm) 2007 2006 amounted to more than $1.6 billion, Income Taxes 744.9 with income tax and GST combining 633.6 to contribute 92% of this amount. Goods & Services Taxes 54.5 In New Zealand, taxes borne totalled 45.4 $350 million, with income tax and Employment Taxes 171.7 GST contributing 97% of this amount. 162.1 Taxes collected in Australia amounted to Other Taxes 15.6 $825 million with more than half relating to employee PAYG. New Zealand’s taxes 13.3 collected fi gure was $608 million with 1 Note taxes borne and collected have not been audited. Withholding tax amounts collected and remitted by resident withholding tax and employee ANZ in its capacity as a nominee for a number of investments are not included. Defi nitions of all taxes are PAYG making up 94% of the total. available at www.anz.com/cr2007

ANZ CORPORATE RESPONSIBILITY REPORT 2007 13 CORPORATE RESPONSIBILITY GOVERNANCE

ANZ has developed leading approach to human rights and DEVELOPING OUR APPROACH practice corporate governance responsible business management. ANZ’s Corporate Responsibility Charters structures where corporate The Board has endorsed ANZ’s Corporate guide our approach and are supported responsibility is integrated into Responsibility Charters setting specifi c by specifi c policies and initiatives. We the way we manage our business. commitments and targets across all continue to review and develop the Our organisational and strategic stakeholders. The Board has also charters to refl ect what our stakeholders, approach is reflected in our supported the establishment of an including our employees and customers, governance structures, charters, Executive Corporate Responsibility consider should be distinctive to ANZ’s codes of conduct, policies Council, which, with the CEO and approach and their expectations of a and approach to remuneration Management Board members, provides leading fi nancial services company. and rewards. strategic leadership and performs an We conducted extensive internal and oversight and advisory role in achieving external engagement to develop a LEADERSHIP the Group’s CR agenda and priorities. People Charter for ANZ and to review the The Board’s Governance Committee Members are responsible for agreeing commitments in our Environment Charter. regularly reviews ANZ’s corporate on our public targets, integrating policies responsibility strategy and programs. Other signifi cant policy developments and management systems, and in 2007 included: Ian Macfarlane was named Chair of delivering results in their business. the Governance Committee following ■ The release of ANZ’s Reconciliation David Gonski’s resignation as a Director This year, our Chief Financial Offi cer, Action Plan, the fi rst of any major of ANZ in May this year. Peter Marriott, was appointed Chair corporate in Australia. This plan aims of the Council. Peter’s priorities are to to assist Indigenous inclusion through The Governance Committee’s corporate ensure we strengthen our leadership employment, fi nancial literacy, cultural responsibility focus in 2007 has positions and anticipate and respond recognition and awareness, and capacity included the review of ANZ’s policies, to emerging CR risks and opportunities, building. It includes the most signifi cant practices and management systems particularly as we build our business Indigenous employment targets of any against the OECD Guidelines for beyond our core markets of Australia major Australian company. Multinational Enterprises. and New Zealand. ■ The release of ANZ’s Disability Action Following considerable work by Additional forums also exist to drive Plan. This Plan sets out the steps we will management to address the issues specifi c issues, for example the take to ensure our workplace welcomes identifi ed in the review, the Board Diversity Council, Occupational Health and supports people with a disability announced its support for the Guidelines and Safety Committee, and Disability and that our products and services are as a framework for our Group-wide Action Plan Committee. inclusive and accessible to everyone.

ANZ’S ORGANISATIONAL AND STRATEGIC APPROACH TO CORPORATE RESPONSIBILITY

ANZ Board of Directors

Governance Committee CEO & Management Board

Customer Shareholder People Community Environment Charter Charter Charter * Charter Charter

Group General Manager Corporate Responsibility Corporate Affairs Council

* The People Charter will be launched in 2008

ANZ CORPORATE RESPONSIBILITY REPORT 2007 14 CORPORATE RESPONSIBILITY GOVERNANCE CONTINUED

■ The review of ANZ’s Global Anti-Bribery An online course helps ensure our ■ operational risk Policy to align it with Australian and business standards and Code of Conduct ■ securities trading by employees overseas requirements. This Policy are understood by our people. Almost ■ our relationship with external auditors prohibits the involvement of ANZ 9,000 employees completed this course ■ whistleblower protection staff globally in bribery and will be in 2007. We also ask all employees to implemented in 2008. complete a Code of Conduct Declaration ■ wholesale risk social and environmental course every two years to confi rm they issues ■ A Group-wide project to implement the understand and agree to abide by the new Australian Anti-Money Laundering HUMAN RIGHTS principles set out in the Code. More and Counter Terrorism Financing Act. In May 2007, ANZ announced its than 8,000 employees completed this A new Correspondent Banking Due public support for the OECD Guidelines course this year. Diligence Policy was implemented during for Multinational Enterprises as a 2007 and an updated Group Anti-Money In addition to ANZ’s compulsory Code of comprehensive framework to guide Laundering Policy and training program Conduct course, we have issue-specifi c our approach to responsible business has been developed. training for employees on topics such management. as money laundering, identifi cation ■ The adoption of the Equator Principles In 2006, ANZ commissioned of terrorist money, fraud and privacy. to apply consistent best practice independent consulting fi rm, Corporate A new program of risk and compliance social and environmental standards ResponseAbility, to benchmark our courses is also being rolled out to policies, practices and management to our consideration of project fi nance staff in New Zealand covering General transactions. systems against each criterion in a range Security Awareness Training, Business of internationally recognised human ■ The development of our new Forests Continuity Awareness Program and rights standards including the OECD Policy, the fi rst in a series of sector- Introduction to Fraud. Guidelines, the UN Global Compact and specifi c policies designed to provide Almost 18,000 employees globally the Business Leaders Initiative on Human greater consistency in the integration of completed courses related to Rights. Outcomes of the project were social and environmental factors in our discrimination, harassment and publicly reported in our 2006 CR report. lending decisions to major corporates. bullying during 2007. The review found that ANZ complied with, and in many cases, exceeded most CODES OF CONDUCT GROUP-WIDE POLICIES Three codes of ethical conduct help criteria in Australia and New Zealand. In addition to our Charters and Codes It highlighted that more work was ensure we are responsible, trustworthy of Conduct, we have Group-wide and law-abiding: required to understand and mitigate policies covering: human rights risks in our supply chain, ■ ANZ Directors’ Code of Conduct guides ■ anti-money laundering our lending decisions in our Institutional directors in pursuing the highest ■ corruption and bribery business and our operations and ethical standards in the interests of partnerships outside our core markets shareholders, our people, customers ■ confi dentiality of information and the communities in which ■ confl icts of interest This year, we have made strong progress in addressing the key issues highlighted ANZ operates. ■ employee indemnity in the review. Specifi c actions include ■ ANZ Employee Code of Conduct sets ■ equal opportunity and harassment the following: out the ethical standards and principles ■ health and safety to guide the conduct of all ANZ people. ■ ANZ’s People Charter was developed ■ market disclosure It seeks to create an environment where and will be released in 2008. It aims to ensure our employment practices our people can excel regardless of race, ■ prevention of money laundering covering human rights, occupational religion, age, disability or gender. and terrorist fi nancing health and safety, workplace relations, ■ privacy ■ ANZ Code of Conduct for Financial whistleblower protection and anti- Offi cers guides the Chief Financial ■ public policy advocacy and political discrimination policies are applied to Offi cer and fi nancial staff in their donations our operations globally where they are everyday dealings. ■ operation of our compliance framework applicable and culturally appropriate.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 15 CORPORATE RESPONSIBILITY GOVERNANCE CONTINUED

■ We have adopted new processes to to examine opportunities to strengthen A specialist Risk Training/Learning ensure human rights are explicitly our JV due diligence and management Academy was also established in 2007. considered in Institutional lending processes relative to relevant social and STRENGTHENING COMPLIANCE decisions. This has included enhancing environmental criteria. Our goal is to our screening processes to include pursue complete compliance with the Compliance with ANZ’s Codes of specifi c reference to human rights Guidelines over time, and to lead the Conducts and relevant policies are issues. We have also adopted the way for others. referenced in all employee contracts Equator Principles which ensure that and confi dential advice on ANZ policies, RISK MANAGEMENT the International Finance Corporation practices and management systems is (IFC) safeguard policies including those The Board sets the ANZ risk policy available via our hotline, People Assist. framework which provides a uniform relating to human rights are applied Breaches of operational, regulatory and governance structure for the way risks to our Project Finance business. ANZ compliance requirements are tracked are discharged from Board to Project Finance staff have also been using an online reporting system and management. trained in the Equator Principles case management, with corrective action including a detailed explanation of It sets out the role and responsibilities of closely monitored. IFC Performance Standards which cover the Chief Risk Offi cer and respective Risk During 2007 we also enhanced our issues such as involuntary resettlement, Executives in credit, market, operational system for reporting both signifi cant and Indigenous rights and cultural heritage. risk and compliance. In addition, it minor Code of Conduct breaches across provides clarity on accountability for ■ We have upgraded our supply chain the Group. Breaches of the Code of setting and implementing policies management to include specifi c Conduct are reported quarterly to ANZ’s within the Group. consideration of human rights issues in Management Board and form part of our sourcing decisions. Supplier policies The ANZ Group Discretions Policy, regular risk reporting to Operational and self-assessment tools have been approved by the Board, outlines the Risk Executive Committee. enhanced to ensure there is detailed governance framework at the highest In 2007 there were 417 serious breaches reference to our standards and criteria level. The Board last approved this Policy of the ANZ Code of Conduct (282 for on human rights issues. in July 2006. Australia and 135 for New Zealand). ■ We released our Disability Action Plan Each ANZ Division is regularly required to These mainly related to breaches of which sets out the actions we will take review and report portfolio stress testing, ‘Abiding by the law and this code’ and to ensure our workplace welcomes and to review asset writing strategies more specifi cally for breaching the ANZ and supports people with a disability and risk appetite. In addition to the Email and Internet Policy. The outcomes and that our products and services are annual stress testing scenario set by of these breaches were: inclusive and accessible to everyone. the Risk Committee and the IMF stress It includes specifi c measures to: ensure ■ 96 exonerated/no action testing program, ‘hot spot’ business our communications with staff and ■ 83 counselled areas are identifi ed and required to customers are accessible to people undergo reviews. For the year 2007, ■ 139 reprimands with a disability; increase awareness Rural and Regional, Resource and Mining ■ 32 resignations of disability issues through staff and the Building sectors were identifi ed communications; ensure our premises, ■ 67 dismissals as areas requiring additional attention. products and services support people with disabilities and comply with Our Reputation Risk Framework gives recognised disability access standards; staff guidance on issues that have the and help to improve the fi nancial literacy potential to affect our standing in the and inclusion of people with disabilities. community. Some of the most challenging issues are We also have a Group-wide crisis still ahead. For example, understanding management plan that is tested every and addressing compliance with the 18 months by four crisis management Guidelines in each of the 31 countries teams and regularly assessed by where we operate. Another priority is external experts.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 16 CORPORATE RESPONSIBILITY GOVERNANCE CONTINUED

REVIEW OF TRADE FINANCE REPORTING AND COMMUNICATION RECOGNITION TRANSACTIONS We aim to be an open and transparent IN 2007, ANZ was one of only four This year, we conducted a detailed bank. We have a comprehensive companies to receive a 10/10 corporate review of ANZ’s compliance with US website, produce annual and interim governance rating from Governance policy on trade sanctions following the Corporate Responsibility Reports and Metrics International (GMI). GMI rates identifi cation of a small number of trade conduct an extensive formal and the corporate governance practices of fi nance transactions with parties from informal stakeholder engagement over 4,000 companies around the world, US-sanctioned countries. program. We produce a monthly update recognising that a company’s governance for more than 8,000 stakeholders and transparency are closely linked to Key actions taken by ANZ in response world-wide, make our public policy its overall performance and therefore to the review include curtailing these submissions available online and have of interest to potential investors. GMI fi nancial transactions, strengthening released detailed position statements measures performance on indicators management and compliance procedures on issues such as our approach to such as board accountability, fi nancial and upgrading automatic sanction fi lters. lending to the forestry industry, human disclosure, shareholder rights and ANZ made full disclosures to all relevant rights and climate change. corporate behaviour. regulators and, at the time of this Report’s publication, discussions were continuing with US authorities. POLITICAL DONATIONS ADDRESSING KEY CHALLENGES AND OPPORTUNITIES ANZ makes political donations each ANZ’s Board and executives access a range of systems and sources to assist them in year (disclosed in our Annual Report) anticipating, understanding and managing emerging issues and risks. The following to support the democratic process. In Group-wide material corporate responsibility issues for ANZ and our stakeholders 2007, we donated $100,000 to the have been identifi ed and reported upon in this document: Liberal Party of Australia and $50,000 Putting our customers fi rst to the Australian Labor Party. There were ■ Responsible lending and supporting customers in diffi culty no political donations in New Zealand. ■ Implementing fairer fees ■ Managing the social and environmental risks in our Institutional lending decisions Leading and inspiring our people ■ Engaging a global workforce ■ Developing women in leadership ■ Providing fl exibility for a changing workforce ■ Managing the opportunities and impacts of offshoring Earning community trust ■ Working with our community to improve fi nancial literacy and inclusion ■ Making progress on small loans ■ Improving Indigenous fi nancial literacy and employment opportunities Managing our environmental impact and supply chain ■ Responding to climate change challenges and opportunities ■ Creating more environmentally-friendly workplaces ■ Infl uencing our supply chain

ANZ CORPORATE RESPONSIBILITY REPORT 2007 17 STAKEHOLDER ENGAGEMENT

ANZ’s approach to stakeholder partnerships and discussed issues We also contribute to public policy- engagement refl ects our long-term such as program targets and evaluation; making process through regular aim to create relationships of trust, increasing the scale of our programs; engagement with regulators and integrity and mutual respect with and differences in philosophy, language governments. Our CEO formally meets all of our stakeholders. and cultures between corporate and with political and regulatory leaders community organisations. twice a year. Some of our key Our Stakeholder Engagement Principles, contributions in the past year included A Community Forum was also held submissions to: developed in 2005, support the AA1000 in New Zealand with our community Assurance Standard. By consulting partners and national bodies ■ The Prime Ministerial Task Group on widely we are able to consider a broad representing not-for-profi t and Emissions Trading range of perspectives, develop policies volunteering groups. The forum focused ■ The Productivity Commission’s Review of that balance competing needs and on community leadership, successful Australia’s Consumer Policy Framework interests of stakeholders and foster partnerships and overcoming barriers strong partnerships to achieve to working together. ■ The House of Representatives Economics shared goals. The Environment Forum was attended Committee’s Inquiry into Home Lending In 2007 we held specifi c forums for our by a number of environmental ■ The Australian Law Reform Commission’s People, Community and Environment organisations, expert consultants and Inquiry into Australia’s Credit Reporting stakeholders. suppliers. It explored topics such as the System. Our People Forum focused on work-life meaning of carbon neutrality; the need Our submissions, together with outcomes balance for employees. It explored to focus on reductions in energy use; ANZ’s Environment Charter and targets; of our engagement processes are shared opportunities for the workplace to with our stakeholders via our interim and become more adaptable to people’s our new building in Melbourne’s Docklands; and how ANZ might approach annual Corporate Responsibility Reports, changing needs, particularly those with our monthly ‘What’s the difference?’ caring responsibilities. Participants, emerging issues such as the growing trend of staff working from home. stakeholder update and our corporate including representatives from the responsibility website. Finance Sector Union, government Many of the issues discussed in the agencies, educational institutions and forums are covered in more detail in recruitment organisations also provided this Report. feedback on ANZ’s draft People Charter which will be launched in 2008. Additional specifi c stakeholder engagement activities in 2007 included The Community Forum was attended a review of our Environment Charter; the by our community partners including development of our Reconciliation Action not-for-profi t organisations, State and Plan; new policies to ease the burden of Federal government departments and exception fees for low-income earners; consumer advocacy groups. It focused and a review of how we support on the topic of community business customers facing fi nancial hardship.

ANZ’S STAKEHOLDER ENGAGEMENT PRINCIPLES

CONGRUENCE CONSULTATIVE COLLABORATIVE CREATIVE COMMUNICATE COMMITMENT

ANZ CORPORATE RESPONSIBILITY REPORT 2007 18 ANZ employees, Cameron and Kellie Stirling, use ANZ’s fl exible work arrangements so that they can spend more time with son Darcy.

section 1 people

OUR FOCUS ON EMPLOYEE ENGAGEMENT AND CULTURE HAS HELPED US TO CREATE A STRATEGIC COMPETITIVE ADVANTAGE FOR ANZ.

WHERE WE’VE BEEN 1999–2006 KEY ACHIEVEMENTS 2007 FUTURE PRIORITIES ■ Employees describe culture as ■ Employee engagement reaches 64% ■ Access the talents of our increasingly ‘bureaucracy’, hierarchical’, ‘long ■ Employees describe cultural values global workforce hours’ and ‘risk averse’ in 2000 as ‘customer satisfaction’, ‘customer ■ Build on the Breakout program’s ■ Culture program begins in 2000 and focus’, ‘profi t’ and ‘community success for sharpening business 26,000 employees complete Breakout involvement’ performance workshops by 2006 ■ LTIFR reduces by a further 20% ■ Continued focus on women in ■ Staff satisfaction moves from 49% in ■ Women in management positions management 1999 to 85% in 2004 gradually increasing ■ Improve staff usage of fl exible ■ Australian LTIFR decreases from 9.5 working arrangements in 2001 to 3.8 in 2006

ANZ CORPORATE RESPONSIBILITY REPORT 2007 19 OUR APPROACH LEADING AND INSPIRING OUR PEOPLE

The passion of our people is extremely important to our business. We understand that the workforce is changing and people have different career goals. Our people policies and programs are embracing changes in the diversity of employees and preferred working arrangements and these initiatives are helping us manage our workforce into the future.

The ANZ People Charter was developed this year and will be launched in 2008. The Charter acknowledges that ANZ is its people and they are responsible for the ANZ HAS ONE OF customer satisfaction, energy and innovation that enables the bank to grow and THE MORE ENGAGED prosper. The Charter includes a series of public commitments to our employees. WORKFORCES OF Specifi c performance indicators have also been designed to help determine whether ANY LARGE BANKING we have met our commitments. ORGANISATION The Charter features the themes of values, opportunities, recognition and performance. GLOBALLY Its performance standards include having the lowest levels of voluntary staff turnover in the industry, ensuring every employee has a professional development plan and HEWITT ASSOCIATES 2007 increasing the use of fl exible working practices across ANZ. It also focuses attention on some of our most challenging people issues. During the past year, for instance, we have sought to improve our organisational culture and employee engagement, improve opportunities for women to develop their careers at the senior levels within the company, help our employees to achieve better work-life balance and minimise the impact of offshoring on our employees.

EMPLOYEES GLOBALLY BY CONTRACT TYPE Full-time 28,335 Part-time 7,775 Temporary 927

NUMBER OF ANZ EMPLOYEES (HEADCOUNT) COUNTRY 2007 2006 2005 2004 Australia 21,772 21,012 20,542 19,229 New Zealand 10,102 10,292 10,329 9,672 Asia 1,307 901 833 686 Pacifi c 1,971 1,780 1,696 1,638 UK & Europe 204 226 226 277 Americas 86 86 90 277 Middle East & South Asia (includes India) 1,595 1,247 664 495 Total 37,037 35,544 34,380 32,274

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 20 ENGAGING A GLOBAL WORKFORCE

ANZ aims to engage its employees this has on the culture at ANZ. They are Today, our engagement score is in the organisation by helping also given the tools they need to make 64% which is well above the benchmark them to understand the important values-based decisions. for Australasian fi nancial services role they play in our success. Our organisations (58%) and close to Hewitt ‘The word Breakout was consciously Associates’ Global High Performance experience is that organisational selected as it symbolised a breaking out benchmark of 79%. This makes ANZ culture and employee engagement from the current paradigm – changing one of the more engaged workforces are key elements of our business mindsets, symbols and behaviours – with of any large banking organisation strategy. In fact, they are a critical a strong force and energy,’ says Siobhan. success factor and part of our (Hewitt Associates 2007). This year Harvard Business School competitive advantage. Employee perceptions of our culture Professor, John Kotter, introduced have also changed for the better. Our Breakout as a case study for ‘Culture’ has been a key performance people now consider the following organisational change and leadership. area for ANZ for several years. Rather values as refl ective of our culture: According to Professor Kotter, Breakout than a ‘soft’ issue, it formed part of customer satisfaction, customer focus, may be the most important addition to a three-pronged business strategy profi t and community involvement. launched in 2000 called Perform, Grow his learning materials in the past decade. TAKING BREAKOUT TO A NEW LEVEL and Breakout. This strategy matched But Breakout is more than a series of the organisation’s focus on performance workshops. It has also led to the This year, we held an event called and growth with an equal emphasis on establishment of new initiatives in Breakout Live, which gave 1,000 people and culture. various areas of ANZ including our employees the opportunity to deepen their understanding of emotional Extensive research at the time showed diversity strategy; employee benefi ts intelligence, our values and that our people were not satisfi ed working such as share schemes and product self-awareness through a series at ANZ. They did not identify with ANZ’s discounts; health, safety and wellbeing of mini workshops and experiences. culture which was seen as hierarchical, programs; talent and graduate programs; overly bureaucratic and inconsistent with learning and development and We also held our fi rst Breakout Festival – the personal values of the people who community programs. These programs a fi ve-month global culture initiative worked here. This was limiting the have contributed to improved staff which encouraged our people to depict performance of the organisation. satisfaction and engagement results. what our Breakout culture means to them, through art, fi lm and song. Employees said they wanted to FROM SATISFACTION TO ENGAGEMENT differentiate ANZ by being ‘The bank By 2004, staff satisfaction had increased The Festival celebrated the creativity and with a human face’. This meant from 49% in 1999 to 85%. So we started diversity of our people. There were more developing relationships of trust with focusing on ‘employee engagement’ – than 500 entries from around the world our customers, shareholders, employees which is the extent to which staff are and employees voted for their favourite and the community. Together we willing to be advocates for their employer, entries. A special event was held in developed ANZ’s values to refl ect this: are committed to staying with their Melbourne where 1,300 staff celebrated ■ Put our customers fi rst employer and are motivated to contribute the winning entries. their best every day. ■ Perform and grow to create value The next step is to build on Breakout to for our shareholders Research by Hewitt Associates shows deliver a high performance culture. ■ Lead and inspire each other companies that have an engagement ■ Earn the trust of the community score of 60% or higher have an average fi ve-year Total Shareholder Return of ■ Breakout, be bold and have the greater than 20%. courage to be different According to Siobhan McHale, Head of Breakout, the Breakout personal ‘Of the materials I use to help people learn about leadership and transformation workshops were the change, the Breakout case study may be the most important addition fi rst step in changing our culture. Staff in the last decade.’ Professor John Kotter, Harvard Business School examine the thoughts and values that drive their behaviour and the impact

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 21 DEVELOPING WOMEN IN LEADERSHIP

ANZ is actively seeking to ■ Providing coaching and support for Cathryn Carver, Managing Director, Corporate Finance, and Chair of the boost the number of women women during critical role transitions Institutional Talent Council, is a strong in leadership positions. With a ■ Introducing transparent processes for advocate of advancing women in the workplace. predicted skills shortage and more reviewing an individual’s career potential than 50% of university graduates ■ Reviewing gender pay equity on an Improvements to our fl exible work being female, it is imperative for annual basis and identifying and arrangements are helping to address ANZ to enable women to contribute resolving discrepancies in pay equity in different and fl exible ways at a this issue. Both men and women can ■ Providing managers with better guidance senior level. access fl exible working hours, part-time on setting appropriate pay levels for work and job sharing. A My Flexibility all employees. Women make up approximately 61% hotline also assists employees and of our workforce and are more highly INCREASING REPRESENTATION OF managers to fi nd fl exible work solutions. engaged than their male counterparts, FEMALE GRADUATES This year our Women@ANZ intranet site but they continue to be under- Recently, we have refocused our was redeveloped, providing women with represented at the senior leadership graduate recruitment strategy to be information about career development, levels of the organisation. more attractive to women. Four years health and wellbeing, fl exible work According to Cathryn Carver, Managing ago, only 39% of our Australian policies and progress on our women in Director, Corporate Finance, and Chair graduates were women – today it’s 51%. management targets. Working parents of the Institutional Talent Council, the Now we are concentrating on retaining also have the opportunity to participate problem goes beyond the boundaries and supporting our female graduates in Staying in Touch lunches and the of the organisation. throughout their careers. Working Parents Network and receive ‘Our top clients in key segments are Many of these graduates are involved ANZ Baby Bags when they have a new mostly male, and historically we have in employee-led programs which are addition to the family. appointed senior relationship bankers helping to address specifi c issues in In 2007, 82.5% of Australian employees and product specialists that match our different parts of our business. For on parental leave returned to employment clients’ profi les, including gender. example, in our Institutional business, a at ANZ. These outdated perspectives are reverse mentoring program called Trading increasingly shifting, and we now aim Places helps executives understand THE FUTURE to appoint the best person, regardless the issues facing people from different The tide is changing according to of gender,’ says Cathryn. backgrounds. Programs such as the Rebecca Griffi n, Head of the Offi ce of ForWARD Forum and Banking on Women the CEO: ‘More and more strong female INITIATIVES TO IMPROVE LEADERSHIP also provide opportunities for female candidates are coming up through the OPPORTUNITIES FOR WOMEN employees and clients to network and ranks and our hiring training programs ANZ’s Diversity Council is taking a share their experiences. are helping executives to identify and multi-faceted approach to dealing with overcome natural biases.’ gender diversity issues. The response SUPPORTING WORKING PARENTS has been designed to address the Another way we are improving leadership While ANZ did not meet its 2007 targets fi ndings of a 2005 survey which opportunities for women is by supporting for women in management, there are identifi ed some of the barriers for women them as parents. For example, our staff signs that our focus on this issue will including a lack of understanding of receive 12 weeks paid parental leave deliver results in the future. We will have issues related to women, women being regardless of years of service and they succeeded when we see the pipeline of assessed on ‘style issues’ rather than can also request an extension of up to talented women at ANZ fl owing more performance, and a ‘blokey’ culture. two years. strongly into senior leadership positions. This year we’ve continued to build on This year, we’ve focused on parental We know that supporting women’s the following initiatives: leave as the fi rst critical point where careers is a complex issue but we have a ■ Setting and tracking our gender targets female employees experience barriers solid foundation, a culture that supports for women in management and in talent to career advancement. Some women women to bring their whole selves to and graduate programs returning from parental leave experience work, an engaged female workforce and ■ Ensuring women are put on job short-lists a lack of fl exibility or believe that their excellent female talent. We are confi dent and selection panels for senior positions career progress has stalled. that positive outcomes will follow.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 22 PROVIDING FLEXIBILITY FOR A CHANGING WORKFORCE

ANZ understands that the EXPERIENCES OF FLEXIBILITY AT ANZ Simon Nowakowski, an EFT Fraud workforce is changing and ANZ offers a range of fl exible work Investigation Offi cer in ANZ’s Personal business must adapt. A skills arrangements including fl exible working Division, was able to adjust his working shortage is on our doorstep, hours, working offsite, job sharing, hours to allow him one day off a week, baby boomers are leaving the extended unpaid leave and guaranteed while still working full-time: ‘It means workforce, Generation Y is choosy part-time work for employees aged I have more of a personal life. I live a and working parents want 55 and over. good distance from work and with not to share family responsibilities. having to travel fi ve days, I save time Research conducted with employees and money.’ in 2007 found that just over half of Our experience is that fl exibility makes respondents benefi ted from fl exible ADDRESSING THE CHALLENGES good business sense. Research has arrangements in the past year. However, OF FLEXIBILITY found it helps retain talented it found a gap between employees who The pilot also identifi ed the challenges employees, reduces absenteeism, would like to access fl exibility and of workplace fl exibility initiatives. In improves customer service and those who are able to do so – 15% of particular, a lack of employee coverage retention, and enhances employee respondents said they had seriously and perceived diffi culty in some productivity and performance. considered leaving ANZ due to a lack customer-facing roles, a narrow or rigid Our employee engagement and culture of fl exibility. view of fl exibility in some areas of ANZ surveys have also consistently shown and administration and technological The survey found that effective that employees desire better balance constraints. implementation of fl exibility initiatives between their work and home life. makes a positive difference to an Internal communication and cultural Shane Freeman, our Group General employee’s engagement, trust and change programs and administration Manager of People Capital and Breakout, personal wellbeing. and technological solutions are being says initiatives to make fl exibility a implemented to address the challenges In 2006/2007 a My Flexibility pilot with standard way of working are essential. identifi ed in our research. 1,200 employees found that overall ‘In the 1980s and 1990s it was all about satisfaction levels with fl exible work We also consulted key stakeholder workers being fl exible for companies; practices were high across all Divisions. groups on the topic of work-life balance now it’s about companies being fl exible It found the most popular practices are at our People and Employment Forum in for workers.’ fl exible start and fi nish times, multiple July 2007. The feedback will be used to arrangements like working part-time and further develop our fl exible work ‘Our fl exibility strategy has been working off site, fl exible work locations policies and systems and to address designed to deliver a more inclusive and fl exible hours across a week. the gap between employees who would work environment, improved career like to access fl exibility and those who opportunities and work-life balance, Many employees commented on their are able to do so. enhanced employment, a distinctive positive experiences and attitudes brand and great business results,’ towards work when the work-life balance My Flexibility is being rolled out globally he said. was improved. They also reported across ANZ business units from late greater productivity when free to 2007. determine their own work schedule.

EMPLOYEES THAT AGREED OR STRONGLY AGREED WITH THE FOLLOWING STATEMENTS*:

Leave arrangements fl exible to enable me to handle important family/personal issues 83% Satisfi ed with fl exibility in hours 76% Job allows fl exibility I need to meet my work and family/personal commitments 78% * According to 2007 My Flexibility Survey

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 23 MANAGING THE OPPORTUNITIES AND IMPACTS OF OFFSHORING

ANZ is the only major Australian bank which fully owns its operations in India. This is now starting to deliver real benefi ts to Buvana Sharma and Sushma Shetty from our bottom line and our culture. ANZ OTSS India talking about their local community programs. ANZ has been operating in Bangalore Since October 2005, a total of 538 since 1989 and employs 1,800 people permanent employees have been including 60 employees who are impacted by offshoring – this includes seconded to Melbourne. Our operations 256 employees in Operations and 282 in provide a specialist capability in Technology. Of the employees impacted, developing and managing software 38.5% (207 people) were redeployed and technology, as well as support into other positions at ANZ. and back-offi ce processing services. BUILDING THE SUSTAINABILITY According to Fred Bertram, Managing OF OUR INDIAN WORKFORCE Director, Operations, Technology and We offer one of the best recruitment in a mentor program with Australia and Shared Services (OTSS) India, the and onboarding programs in India. our Breakout program is also being Bangalore operation has provided ANZ Employees are attracted to our brand offered to managers in India. with a highly skilled workforce while also values and improved work-life balance. We are establishing our local community helping us to remain cost competitive Most of our employees work fewer hours investment strategy to help increase and supporting our growth in Australia, than those required by other major employee engagement. We have New Zealand and the Asia Pacifi c region. Indian employers. partnered with Parikrma Humanity ‘We are building up a resource base that We have a highly qualifi ed workforce Foundation, a school for underprivileged is ANZ’s – not a third party’s. The people with strong career aspirations. In fact, children and our people development are ANZ people, and that ownership and almost all of our employees have a program includes secondments with our the cultural connection will position us tertiary qualifi cation and the majority community partners. Staff are also well as we extend into Asia.’ have a technology or Masters degree. encouraged to take paid volunteer leave to assist local community organisations. IMPACT ON OUR STAFF This presents unique challenges and We have made a series of commitments opportunities. Wage increases are THE FUTURE FOR ANZ IN BANGALORE to our employees who are impacted growing rapidly to meet employee ANZ will continue to leverage our by the offshoring of functions to our aspirations (15% per year over the technology and operations centre Bangalore team. past three years) and there are shortages in Bangalore to build a world-class in good quality leadership talent. capability consistent with ANZ values These include ongoing communication Employee turnover is high compared to and practices. about proposed changes, retraining staff Australia and New Zealand – but still who wish to continue their careers at Nidhi Nikum, Technical Analyst in lower than the local industry average. ANZ and giving them priority for vacant Bangalore says: ‘ANZ’s culture in India roles within ANZ. We have responded to these challenges is just starting to take off. It has a vision in a number of ways. towards operational excellence and it’s We also offer workshops on resume serious about things like diversity and writing and interview techniques, advice For example, our high performers work-life balance. I think this will help on career goals and planning and case are offered a range of career and us to retain the right people to get us management support. In our Technology development opportunities. These where we want to be.’ area, staff were also offered up to include management and leadership $5,000 for retraining to assist with skill development, career acceleration, securing their next opportunity either secondments to Australia and additional internally or externally. Our goal is to investment in professional development. retain as much talent and experience for There are 30 employees from Bangalore other areas of the business as possible, participating in the Group’s Talent while also minimising the impact on staff. program, 15 employees participating

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 24 OUR RESULTS ENGAGING OUR EMPLOYEES THROUGH BREAKOUT

EMPLOYEE ENGAGEMENT BREAKOUT PROGRAM ENGAGEMENT SCORE BY Employee engagement is measured as Our Breakout cultural transformation COUNTRY/ REGION 1 part of our annual Engagement and program continued in 2007, with FINANCIAL COUNTRY/ 2007 SERVICES Culture Survey conducted in partnership 3,054 staff completing the Breakout REGION SCORE with Hewitt Associates and Cultural Foundation workshop and a further AVERAGE Transformation Tools. It provides all ANZ 1,024 participating in other Breakout Australia 64% 58% employees with the opportunity to have programs including Breakout Recharge New Zealand 65% 58% their say on what it’s like to work at ANZ. and Breakout Coaching. This means The results give us insight into our that 27,236 ANZ employees have India 63% 57% employees’ views on ANZ, as well as participated in Breakout Foundation Asia 58% 57% issues ranging from leadership to workshops since 2000 and a further Pacifi c 72% – individual opportunities for career 2,957 have completed other Breakout development and progression. programs, including Breakout Recharge Americas 52% – and Breakout Coaching. The ANZ staff engagement score UK/Europe 41% – increased from 60% in 2006 to 64% in Breakout workshops are a core Total Group 64% 60%2 2007 – well above the benchmark of component of our cultural transformation 1 These engagement scores are based on survey 58% for Australasian fi nancial services strategy as they focus on personal participants’ responses to the question ‘In which organisations and making ANZ one of transformation, with an emphasis on country or region do you work?’ 2 Hewitt Associates 2007 benchmark for Financial the more engaged workforces of any building trust and collaboration to enable sector globally. large banking organisation according our people to perform at their best. to Hewitt Associates (2007). Breakout Live and Breakout Festival, Almost 32,000 employees participated both new initiatives in 2007, were in this year’s Survey. Our engagement designed to help us to continue to create score is too close to Hewitt Associates’ a high performing workplace with a Global High Performance Benchmark. culture that is values-driven and creates opportunity for our people. Breakout will continue to be rolled out globally in 2008.

ANZ CULTURE AND ENGAGEMENT SURVEY*

PERCENTAGE OF EMPLOYEES WHO AGREE OR STRONGLY AGREE WITH THE FOLLOWING STATEMENTS: 2007 2006 2005 This organisation takes its societal responsibilities seriously 75% –– This organisation takes its environmental responsibilities seriously 65% –– We are making a positive difference in the community 70% –– I value the opportunity this organisation provides for me to make a personal contribution to my community 71% 68% 64% People in this organisation take corrective action if standards of behaviour fall below the levels set by our business principles and values 62% –– People in this organisation maintain high standards of ethics and integrity 69% 73% 71% Workplace safety and security is considered important here 80% 81% 77% I can take action that I think will meet the needs of our customers 65% 72% 69% Our people policies are used effectively in my work area 66% 50% 54%

* Survey of 31,982 ANZ employees globally in March 2007

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 25 OUR RESULTS MEETING THE NEEDS OF A DIVERSE WORKFORCE

DIVERSITY STRATEGY ■ International Women’s Day events FLEXIBILITY Managing diversity provides ANZ with in Sydney, Melbourne, Brisbane, We understand that employees want the variety of talent, perspectives and Darwin and Perth fl exible working arrangements to enable experiences we need to value and utilise ■ a women’s intranet site them to effectively balance their work to succeed in a global marketplace. and personal commitments. ■ an ANZ fl oat in the Sydney Gay and Research clearly indicates that diverse Lesbian Mardi Gras The ‘My Flexibility’ Survey conducted teams operating in inclusive workplaces in November 2006, found that 52% of are better at innovation, problem solving ■ promotion of Disability Awareness respondents already benefi ted from and creating new products. Week and an staff awards program fl exible working arrangements. It also ■ production of the ‘Welcoming Disabled ANZ DIVERSITY COUNCIL Customers’ booklet helped to identify some of the barriers The ANZ Diversity Council was and problems with accessing fl exible ■ a Diversity Symposium held in established in 2004 to generate and arrangements at ANZ. New Zealand. guide policies and initiatives that create After a successful pilot earlier this year an inclusive culture at ANZ. It includes During the year, the Council commissioned research to inform with 1,200 employees, ANZ is rolling staff representatives and executives out the ‘My Flexibility’ program from late from across the organisation. strategy development including the ‘My Flexibility Survey’ in Australia and 2007 which will encourage employees In 2006–2007, the Diversity Council divisional fl exibility studies in Consumer and managers to discuss fl exible funded initiatives to increase global Finance and Markets, as well as ‘Women working arrangements and promote diversity, awareness and employee in Leadership’ research in New Zealand. fl exibility across the organisation. engagement including: The Council also supports a number of Some of the fl exible options at ANZ ■ ‘Creating Inclusive Teams’ pilot workshop employee interest groups including the include: lifestyle leave providing an to help increase employee awareness of Disability Network, Parents Network, additional four weeks unpaid leave; the business case for diversity and build ForWARD Forum, Gay, Lesbian, Bisexual fl exible long service leave – where more inclusive teams and Transgender (GLBT) Networking employees can take double long service Group and the Indigenous Network. leave at half pay; career breaks – providing extended unpaid leave; job sharing; carer’s leave – to care for family members in illness or emergencies and DIVERSITY OF ANZ’s GOVERNANCE BODIES telecommuting. FEMALE 30-50 ANZ offers Australian staff 12 weeks MALE % %<30 YRS YRS >50 YRS paid parental leave with no minimum Group Board of Directors 87% 13% 0% 0% 100% service period to qualify – and staff can request an extension of up to two years. Group Management Board 100% 0% 0% 50% 50% In addition, we support employees with Group CR Council 54% 46% 0% 85% 15% children through our partnership with Group Diversity Council 67% 33% 20% 60% 20% ABC Learning Centres in Australia. There NZ Board of Directors 100% 0%%%%are seven centres in operation and 73 families using the child care service. NZ Management Board/EXCO 86% 14% 0% 50% 29% NZ Diversity Council 50% 50% 0% 79% 14% NZ CR Council 50% 50% 11% 78% 11%

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 26 MEETING THE NEEDS OF A DIVERSE WORKFORCE CONTINUED

DISABILITY GENDER DIVERSITY Our New Zealand operations have also In September 2007, ANZ launched its Women make up approximately 61% seen some improvement in this area, updated Disability Action Plan. The Plan of our workforce globally. We continue achieving their target at the senior outlines ANZ’s strategy to increase to focus on increasing the number of manager level but not at the executive support for customers, staff and other women in management positions and manager level. community members with a disability. across our business. This year we also began tracking women The Disability Action Plan Oversight In Australia, female representation in in management positions in Asia, the Committee is responsible for monitoring management at the executive level has Pacifi c and India. However targets are implementation of the Plan and reports increased from 19% in 2005 to 25% in not set for these regions. to the ANZ Management Board. 2007. While this is a positive outcome, we did not achieve our targets for The action items contained in our women in senior manager and Disability Action Plan address the issues managerial positions in Australia. of accessibility and usability of: ■ communications with customers, staff and the community

■ property and premises WOMEN IN MANAGEMENT WOMEN IN MANAGEMENT ■ services, including technology-based (AUSTRALIA) (NEW ZEALAND) banking services EXECUTIVES EXECUTIVES 2005 19% 2006 12% ■ systems, policies, procedures and culture to ensure inclusion and 2006 22% 2007 13% availability for all staff. 2007 25% 2008 Targets 20% 27% ANZ set up a Disability Network in 2005 2008 Targets SENIOR MANAGERS which includes staff from all levels of the SENIOR MANAGERS 2006 14% organisation interested in fi nding ways 2005 24% 2007 17% to better support disabled customers 2006 28% 2008 Targets 22% and staff. Recent achievements include 2007 29% MANAGERS running Disability Awareness Week at 2008 Targets 39% 2006 31% ANZ, increasing awareness among staff 2007 33% through regular presentations and MANAGERS meetings and contributing to ANZ’s 2005 36% 2008 Targets 43% Disability Action Plan and the Technology 2006 39% Accessibility Initiative. The Network also 2007 40% led the establishment of the Reasonable 2008 Targets 49% Accommodation Kit and Policy for staff WOMEN IN MANAGEMENT members with disabilities. (ASIA PACIFIC & INDIA) ASIA PACIFIC Executives 14% Senior Managers 16% Managers 42%*

INDIA Executives 22% Senior Managers 17% Managers 42%

* Manager fi gure has been restated on 6 February 2008 due to a reporting error

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 27 MEETING THE NEEDS OF A DIVERSE WORKFORCE CONTINUED

AGE DIVERSITY CULTURAL DIVERSITY for the employment of Indigenous ANZ was the fi rst Australian company ANZ’s Group-wide diversity survey Australians of any major Australian to introduce a Career Extension (2005), My Difference, showed that company and a commitment to improve program which guarantees part-time ANZ is a culturally diverse organisation awareness of Indigenous issues and work for employees aged 55 and over. with employees born in more than culture amongst our employees (for more information, see pages 55–56 and 59). The program gives mature-aged 130 different countries. The majority of We have 35 Indigenous school-based employees the fl exibility to adapt their employees who responded were born trainees and have committed to the career to suit their changing lifestyle – in Australia (45%) and New Zealand recruitment of 300 Indigenous trainees whether they are gradually moving (28%) and other countries included by 2009. ANZ is also a member of the towards retirement or are looking to India, Fiji, United Kingdom and Malaysia. Corporate Leaders for Indigenous change their career. The Survey also found that approximately Employment Project. 32% of employees speak a language other than English, with the top Our teams play an active role in languages being Hindi, Italian, Greek, celebrating our cultural diversity. French, Tamil, Cantonese and Mandarin. For example, ANZ’s Payments team holds an annual Cultural Week at sites In April 2006, ANZ was the fi rst across Australia and in Bangalore. major corporation to announce its Staff participate by wearing cultural Reconciliation Action Plan. The Plan dress, decorating work areas and includes the most signifi cant targets enjoying food from different cultures.

ANZ EMPLOYEES OVER 55 YEARS OF AGE

AUSTRALIA NEW ZEALAND Employees over 55 years of age 10% 7% Employees 55+ who are full-time 58% 66% Employee 55+ who are part-time 41% 23% Employee 55+ who are temporary 1% 11% Annual total turnover of 55+ 16.2% 8.98%

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 28 OUR RESULTS BEING A LEADING EMPLOYER

REMUNERATION ‘Model My Pay’ assists Australian staff We review salaries annually to ensure to determine the impact of fl exible pay we remain a premium employer in the choices on their take-home pay, enabling fi nancial services sector. We also monitor them to make more informed decisions. the pay differential between men and EMPLOYEE BENEFITS women at all levels and our internal audit We offer a range of employee benefi ts team conducts an annual review of remuneration outcomes to ensure that including discounts on ANZ products ANZ’s fi xed pay and variable rewards and services, salary packaging choices are appropriate and aligned with ANZ’s and access to discounted ANZ shares. pay philosophy and guidelines. Since 1999, ANZ has given each There are disparities in average salaries permanent full-time or part-time between men and women because employee (excluding senior executives fewer women are in senior management and permanent employees with less positions within our salary bands and than one year’s service) $1,000 in a greater proportion of men occupy shares as part of our Employee Share roles that command market premiums Acquisition Program. In 2006, more (e.g. Investment Banking roles). We are than 900,000 shares were issued to gradually seeing a positive change and 28,023 staff in 28 countries. This anticipate it will continue to improve included 560,509 shares to 17,165 as we develop and support women Australian staff and 268,920 shares into more senior roles. to 7,992 New Zealand staff. ANZ’s ‘Flexible Pay Choices’ initiative Employees who have participated in allows Australian employees to tailor this program every year in the 10 years their salary to suit their own needs since its inception would now own and includes items such as child care, shares worth more than $20,000 workplace giving and superannuation including re-invested dividends. Around contributions. Our online calculator, 79% of staff now own ANZ shares.

GENDER PAY DIFFERENTIAL – SALARIES BY EMPLOYEE GROUP AUSTRALIA NEW ZEALAND EMPLOYEE GROUP DIFFERENTIAL FAVOURS DIFFERENTIAL FAVOURS Executives 4% Males 1% Females Senior Managers 6% Males 6% Males Managers 2% Males 6% Males Non-managers 2% Females 4% Females Overall weighted average 0% Gender Parity 2% Females

• The Differential represents the difference between average male and female remuneration. For example, if average remuneration = $100,000 for females and $103,000 for males, then the differential is +3% in favour of males. • In Australia, the Group Heads (who report directly to the CEO) have not been included in the executive gender differential analysis due to the absence of female Group Heads for comparison purposes. Similarly, in New Zealand, Group 1 Executives are not included as there are no females in this category. • In Australia, the predominance of males in Investment Banking roles (which command) a market premium, has notably skewed the gender differential in favour of males at the manager level and above. If we exclude Investment Banking roles, gender pay parity improves at all levels, specifi cally the differential in favour of males is 0% for Executives, 2.5% for Senior Managers and 1.5% for Managers.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 29 BEING A LEADING EMPLOYER CONTINUED

WORKPLACE RELATIONS COMMUNICATION AND COMPLAINTS RECRUITMENT, RETENTION The employment conditions of our ANZ encourages a culture of open AND TURNOVER staff are covered by the ANZ/Financial and honest communication where We aim to attract and nurture the very Services Union (FSU) Agreement (1998) employees feel comfortable raising best people through our recruitment and the Workplace Relations Act (1996) issues with their line managers. We and retention programs. It is common in Australia and the Collective conduct regular employee surveys and practice to hire local residents in our Employment Agreement, the Workplace our company intranet provides channels signifi cant areas of operation. We also Relations Act (2000) and the Health for employee feedback including a encourage secondment opportunities and Safety in Employment Act (1992) ‘CEO Chat’ site and bureaucracy blogs. and transfers between our businesses in New Zealand. in different geographic locations. Serious grievances, problems and ANZ respects the right of employees complaints can be submitted under our In the past year, 8,810 new employees to join unions of their choice and Employee Assistance Program, FORUM joined ANZ globally. This includes consults with staff unions prior to and the Whistleblower Protection Policy. 4,722 in Australia and 1,666 in New organisational or structural change Some business units also use external Zealand. During the reporting period, impacting our employees. mediators to help resolve disputes. 5,658 left ANZ voluntarily (2,909 in Australia and 1,109 in New Zealand). For example in 2006, ANZ and the FSU The ANZ Employee Assistance Program worked closely on developing a joint is a confi dential counselling service ANZ seeks to avoid redundancies, but arrangement on working conditions for free to all ANZ staff. Employees can when restructuring and redeployment employees who work in retail branches seek professional assistance and are unavoidable, our processes and on a Saturday. guidance to resolve or better manage guidelines aim to minimise the impact on those affected. Priority for internally Other 2007 initiatives include: personal and professional problems. Just over 900 employees used this advertised positions is given to those ■ obtaining FSU support for a Sunday service in the past year. on redeployment. We also provide Trading Licence in Lismore NSW (ANZ’s access to outplacement services to help fi rst seven day a week operation in NSW) The Whistleblower Protection Policy affected employees fi nd suitable roles ■ FSU led training of ANZ branch managers provides employees, contractors outside the bank. and consultants with a mechanism and staff on the requirements of In Australia, at least 12 weeks notice to escalate serious issues on a effective staff rostering within Retail is provided to employees who are confi dential basis. There were no Banking NSW impacted by significant operational investigations undertaken in the ■ regular consultations on employee changes. This includes six weeks’ past year under this Policy. satisfaction and on stress testing redeployment and six weeks’ notice initiatives to best meet the needs of retrenchment. Employees are of ANZ staff and businesses. entitled to a minimum of one day off per week to find a new job outside of ANZ. Retrenchment and redeployment procedures are specified in the ANZ Group Award (1998) and the ANZ/FSU Agreement (1998).

ANNUAL TOTAL TURNOVER RATE BY GENDER AND AGE1 COUNTRY FEMALE MALE <30YRS 30-50YRS >50YRS TOTAL Asia 25.2% 28.3% 24.2% 27.3% 27.2% 26.3% Australia 16.6% 19.1% 26.8% 15.0% 11.8% 17.6% India 15.5% 23.1% 17.5% 27.8% 0.0% 20.1% New Zealand 12.0% 13.1% 18.9% 10.7% 8.5% 11.1% Pacifi c 8.4% 9.8% 9.8% 8.1% 6.3% 8.9%

1 Total turnover includes voluntary and involuntary staff turnover

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 30 BEING A LEADING EMPLOYER CONTINUED

In New Zealand, an employee whose All staff members have access to TALENT PROGRAMS position becomes redundant and is the 360 Degree feedback tool which The ANZ Talent Radar aims to develop not redeployed receives a minimum of helps employees understand their a strong leadership pipeline of talented six weeks’ written notice of termination performance. This feedback is also employees across ANZ. Employee or payment in lieu thereof. Before an used to inform the development of potential is identifi ed via line managers employee is given formal notice of our top 100 executives. and confi rmed via divisional People days. redundancy, the Bank examines all alternative job options and makes GRADUATE PROGRAMS The program offers networking every reasonable endeavour to identify ANZ’s graduate programs aim to attract, opportunities, increased visibility to and offer at least one job option. develop and retain talented individuals senior leaders, career opportunities Redundancy and redeployment are who want to embark on a challenging and world-class development specifi ed in the ANZ National Bank’s career within the banking and fi nance programs designed to help us retain Collective Employment Agreement, the industry. ANZ offers graduate programs our future leaders. Individuals are Individual Employment Agreement, and in Australia, New Zealand, Asia and also earmarked for future roles and the Managerial Employment Agreement. India. All graduates have an ANZ coach alerted to ‘hot’ job vacancies. to help them to build networks, PERFORMANCE MANAGEMENT In 2007, a new global Talent Radar improve their infl uencing skills and The performance of each person at ANZ was launched replacing previous navigate the organisation. is linked to remuneration and rewards talent programs that existed at Group, with assessments covering fi nancial In 2007, we recruited 367 graduates functional, divisional and business and non-fi nancial criteria such as worldwide including 229 in Australia, unit level. customer satisfaction, employee 56 in New Zealand, six in Asia and There are currently 850 employees engagement, community involvement 76 in India. worldwide on the Radar and 40% of and environmental performance. Gender diversity in our graduate those employees are women. All managers are required to take recruitment has been a focus in recent their staff through the performance years. Four years ago, only 39% of our development process. Key performance Australian graduates were women – indicators are established in today it’s 51%. The focus now is to consultation with the individual and ensure that we help support our female performance reviews are conducted graduates through the career pipeline informally half yearly and formally at at ANZ. least once every year. Line managers are encouraged to regularly discuss The graduate intake has increased by development with staff. 37% compared to the previous year.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 31 OUR RESULTS DEVELOPING OUR EMPLOYEES

LEARNING AND DEVELOPMENT Leadership – Deep Smarts’ aimed at ANZ continues to invest heavily rapid acceleration of high potential in the development of our people. In employees and Leadership Essentials 2007, the spend was over $63 million aimed at new managers globally. ANZ employees completed ■ A pilot of Breakout Inclusion – a team more than 16,000 self-paced study based learning event focused on courses and 26,000 facilitated courses. inclusion and diversity. On average, the total learning time Capabilities for effi ciency: investment per annum is approximately In 2007, 25 hours per employee. ANZ has invested almost $2 million in learning programs to support LEAN The Learning and Development priority and six sigma methodologies. These is to build capability for growth, programs have delivered $26 million effi ciency and leadership in an of savings for the bank. increasingly global workforce. Global capabilities: In 2007, a key Capabilities for growth: ANZ will priority has been to roll out the launch a learning facility called the interactive learning and knowledge ANZ Learning and Breakout Centre in platform known as e-train throughout late 2007. The centre is designed to Asia and the Pacifi c. There are currently encourage our staff to think differently more than 30,377 active learners and to provide a supportive learning using e-train at ANZ, and employees environment. completed an average of 10 e-learning Some of the other key initiatives in courses over the past year. In total, 2007 include: more than 325,766 e-train courses were completed in 2007. ■ Establishing ANZ Learning Academies for functional skill building (for example ANZ and partner organisations now a Finance Academy, an Operations have access to the global suite of Academy, a People Capital Academy leadership and culture programs. and a Risk Academy) During 2007 programs were delivered in China, Vietnam, Cambodia, India ■ Ongoing partnerships with universities and the Pacifi c. to build professional skills (Melbourne University, Deakin, AGSM) ■ New programs for leadership development including ‘Igniting

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 32 OUR RESULTS SUPPORTING THE HEALTH, SAFETY AND WELLBEING OF EMPLOYEES

APPROACH AND STRATEGY Development of HS&E Strategic The physical wellbeing of our staff is ANZ is committed to providing a Plans and Operational Plans has important to us and over the past three workplace that is safe, secure and also commenced in countries outside years, ANZ has participated in the supports the physical and mental Australia – with full-time health Global Corporate Challenge – a wellbeing of our employees. Our and safety resources engaged for six-month fi tness initiative where approach goes beyond compliance, New Zealand and India. participants undertake a virtual walk around the world. Last year, 266 teams to proactively supporting the physical, ANZ’s union agreements in Australia earned ANZ the Gold Award Trophy emotional and fi nancial wellbeing of and New Zealand include health and for overall outstanding company our people. Our aim is to be the safest safety topics. Our Australian agreement performance. This year we have funded fi nancial institution in the world. covers health and safety committees 298 teams globally, with an additional Our health and safety program and our and representatives and breaks for 60 self-funded teams. Lost Time Injury Frequency Rate (LTIFR) branch staff. Our New Zealand are externally audited on an annual agreement covers management of We continue to support the fi nancial basis. Our Australian LTIFR was 3.0 as hazards, secure environment and wellbeing of our employees through at September 2007, down from 3.8 in safety working techniques. our Financial Fitness sessions, a comprehensive intranet site and online 2006, a 21% reduction. In New Zealand, HEALTH, SAFETY AND WELLBEING MoneyMinded courses. This year our LTIFR is 1.6 – a 50% decrease on PROGRAMS the past year. However, New Zealand 1,400 employees participated in Leadership in Safety is a training has restated its 2006 fi gure to 3.6 as MoneyMinded online including two program for Senior Managers introduced the previously reported fi gure of new courses – Investment Basics and in July 2006. The program is an 1.5 was found to be inaccurate. Super Future. interactive session focusing We aim to reduce our LTIFR by another on the leadership role that senior In October 2006, Financial Fitness 20% in Australia and New Zealand management must take on to make Week focused particularly on branches over the next 12 months. the workplace safer. Twenty-three and call centres, where each member Leadership in Safety sessions have been of staff was sent a fi nancial fi tness ANZ’s health and safety strategy has held to date for ANZ senior managers pack. The pack included a DVD been applied globally and tailored from Australia and Pacifi c Divisions. (containing information on budgeting, for individual countries. Health and saving, investing and superannuation) Safety Committees exist in each state The My Health program continued in and information cards with useful tips in Australia and in New Zealand. 2006/2007, giving all Australian ANZ about fi nance. We have also developed a global employees the opportunity to register health promotion program which for access to an online health and provides relevant and accurate health wellbeing site as well as participating information and activities for our in health checks. There have been employees in all countries. more than 9,000 health checks and over 10,000 registrations to MyHealth Three-year Health, Safety and Online since the program was Environment (HS&E) Strategic Plans launched in 2005. and Annual Operational Plans have NUMBER OR WORK RELATED LOST TIME INJURIES PER MILLION been developed for all ANZ Divisions ANZ has continued to focus on mental HOURS WORKED to reduce injury and illness and better health during 2006/2007. In October (AUSTRALIA) integrate activities so that H&SE 2006, ANZ promoted Mental Health 2001 9.5 becomes part of the way we do Week by running activities and events 2002 6.9 business. Every Division has a HS&E to help raise awareness. Experts 2003 5.4 champion to act as an ambassador provided staff with information on a 2004 4.9 and roll out operational plans. variety of mental health and related 2005 4.2 Progress is reported to senior topics. ANZ will be implementing 2006 3.8 management on a regular basis. Mental Health Week promotions globally in 2008. 2007 3.0

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 1 PEOPLE 33 A customer speaks to an ANZ service consultant at our branch in Bendigo, Victoria.

section 2 customers

WE CONTINUE TO INVEST IN MEASURES TO ENSURE OUR CUSTOMERS RECEIVE SIMPLE, CONVENIENT AND RESPONSIBLE PRODUCTS AND SERVICES AND OUR LENDING AND INVESTMENT DECISIONS ARE GUIDED BY SOUND SOCIAL AND ENVIRONMENTAL STANDARDS.

WHERE WE’VE BEEN 1999–2006 KEY ACHIEVEMENTS 2007 FUTURE PRIORITIES ■ Customer Charter released in 2001 ■ Maintained highest customer ■ Improve our customer satisfaction ■ Simple personal banking accounts satisfaction of four major banks rating and fee-free account for low-income at 77.2% ■ Build towards our goal of being customers ■ Opened 79 new branches since Australia’s most convenient bank ■ Customer satisfaction moves from 2004 and installed 400 new ATMs ■ Continued focus on supporting 60% in 1999 to 75.5% in 2006 ■ Consumer hardship policies reviewed customers in fi nancial diffi culty ■ Developed framework to assess social and new Exception Fee Policies ■ Review of Customer Charter introduced and environmental risk in lending ■ Development of Institutional social ■ Adopted the Equator Principles ■ Implementation of the Equator and environmental policies Principles

ANZ CORPORATE RESPONSIBILITY REPORT 2007 34 OUR APPROACH PUTTING OUR CUSTOMERS FIRST

Our Customer Charter spells out our commitment to simple, convenient and responsible retail banking. We are developing a similar approach in our Institutional business to respond to the growing social and environmental issues facing our clients.

We introduced our Customer Charter in 2001, a time when the banking industry was rebuilding the trust of customers which had eroded due to rural branch closures, increasingly complex products and a decline in customer service. The Customer Charter was a statement that we needed to do better and, by establishing a set of clear and measurable commitments, we set a course for us to improve our service to customers. ‘BANK OF THE YEAR’ The Customer Charter is a living document that adapts to changing circumstances and ACCORDING TO CANNEX/MONEY MAGAZINE customer needs. In 2005, we added promises to protect certain low-income customers from unsolicited credit card offers, as well as a commitment to respond to growing NO.1 RELATIONSHIP BANK customer demand for extended branch opening hours. The Charter will be reviewed ACCORDING TO PETER LEE ASSOCIATES again in 2008 to ensure we focus on, and remain accountable for, the issues that are most important to our retail customers. We are also seeing the value of a transparent commitment to public standards in our Institutional business. New and complex social and environmental issues pose risks to us and our customers. We are more likely to successfully manage the expectations of staff, customers, shareholders, governments, and non-governmental organisations (NGOs) if the process and guiding principles for our decisions are clear. This can also help our clients understand how they can further improve their practices, especially those in countries with developing legal frameworks.

ANZ CUSTOMER SATISFACTION

80 (%)

75

70

65

60

55 Sep 1999 Sep 2007

Source: Roy Morgan Research – Aust MFI Pop’n aged 14+, % Satisfied (Very or Fairly Satisfied), 6 mth moving average

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 35 RESPONSIBLE LENDING AND CUSTOMERS IN DIFFICULTY

Rising interest rates and high This was an important step, but we or other relief to help them get back on living costs in Australia are know our responsibility does not end track. Subjective judgements about placing pressure on many at how we market credit. whether the customer’s circumstances are deserving of relief will be avoided. households. We are acting to Regardless of the controls we put on improve the way we identify and ourselves, or the information we provide Payment plans, where possible, will be support ANZ customers who find to our customers, there will always be based on what the customer indicates themselves in financial difficulty. customers whose circumstances change they can afford and not dictated by the and who will get into fi nancial diffi culty. bank. We are also working to cut Research shows the vast majority of Providing the right support and guidance paperwork, fi nalising payment plans households repay their debt comfortably is not only important to the customers over the phone where we can. and two thirds of all households have involved, but is crucial to control the level TAKING PREVENTATIVE MEASURES little or no debt at all. of credit losses to our business, especially While responding effectively to But while the majority of households are if more households are struggling to make customers in diffi culty is vital, comfortable, some are clearly struggling. ends meet. prevention is better than cure. Increased fuel and debt servicing costs SUPPORTING CUSTOMERS IN HARDSHIP fall more heavily on those with low This year we worked with Kildonan Our credit cards business commenced a incomes. There is also evidence that Uniting Care, a community-based pilot in June 2007 to contact customers the number of households experiencing organisation with expertise in consumer who may be showing early signs of diffi culty is growing. This year we again hardship, to review the way we interact fi nancial diffi culty. saw a rise in bankruptcy rates and with retail customers who are falling For the pilot, we are choosing customers further increases in demand for the behind on repayments. who are close to or have exceeded their services of fi nancial counsellors. The review we conducted with Kildonan credit limit, even though they may not For ANZ, an important part of being a found ways we could be more proactive yet be missing payments. We offer them responsible lender is looking beyond about offering assistance rather than options like temporary fee and interest the aggregate data and understanding waiting for the customer to tell us they waivers or reduced minimum monthly how consumer credit can impact people are in hardship. In the past, we have been payments to help them stabilise their in their daily lives, in particular those too focused on the cause of a customer’s fi nances and hopefully pre-empt credit on low incomes. We then take steps to diffi culty, only offering assistance if their problems. support these customers. circumstances fi t into a pre-determined This is unchartered territory for us and category, such as unemployment or illness. OUR APPROACH we are testing the approach. Calling Last year we reported on our Responsible We are now introducing a more consistent customers with this offer could easily Lending commitments. We no longer and fl exible approach across our entire be seen as intrusive, especially where make unsolicited credit card limit retail business. If a personal loan customer the customer has not yet defaulted on increase offers to customers we know has a genuine desire to pay off their loan their account. are on a government benefi t or who have but needs more time, it should not matter We have been encouraged by the early shown recent signs of struggling to make why they are struggling in the fi rst place. results, and in particular the positive repayments on their card. It should be as easy as possible to enter a repayment arrangement they can afford response from our customers. This responded to our research into to pay – this is in our interests as much Throughout the pilot we will continue to fi nancial diffi culty which found that as the customer’s. monitor the accounts of customers who some customers can accept these offers Our staff are being trained to more have taken up offers to see whether this without fully considering affordability. proactively identify customers who may early intervention can make a difference For some, the offers can create a benefi t from an alternative payment plan to default rates. perception that ‘if the bank sent it to me, it must be okay’. ‘Kildonan is encouraged by ANZ’s desire to develop such important and innovative approaches to consumers who may be in diffi culty.’ Sue Fraser, Senior Manager, Social Advocacy Services, Kildonan Uniting Care

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 36 IMPLEMENTING FAIRER FEES

There has been a major debate in Australia this year about bank ‘exception fees’, with some stakeholders stating that they are too high and in some cases applied unfairly. ANZ is taking

market-leading steps to reduce Branch Manager, Cameron Russell, serves a customer at the impact of these fees on low- the Bathurst and Castlereagh Streets branch in Sydney. income earners. EXCEPTION FEES POLICIES set up automatic monthly payments We know that most customers accept to their credit card to avoid accidentally fees, provided the fees are clear and ANZ has introduced two new consumer incurring late payment fees. for a product or service they value. fee policies. The ANZ Exception Fees Policy – Consumer Cards and the ANZ ■ Communicating effectively It follows then that customers can Exception Fees Policy – Consumer A fee may not always be well understood become disgruntled if they believe Transaction Accounts set out public by our customers just because it appears fees are ‘hidden’, or disproportionate commitments to respond to what we in product terms and conditions. For the to the value they receive. understand to be the most important most part a customer does not expect to Exception fees (also referred to as issues to our customers, including: overdraw their account or go over their penalty or default fees) are charged ■ Reducing the fees for low-income credit card limit. They may only become by banks when a customer does not customers aware of a dishonour fee when it have enough funds in their account We reduced to $10, from $35, all appears on their statement for the for a payment or withdrawal, when a exception fees on ANZ Access Basic, fi rst time – which is precisely when credit card limit is exceeded or when our concession account for health care information about exception fees a customer is late with a payment to card holders and Centrelink payment would be most helpful. their account. recipients. Over 47,000 ANZ customers ANZ’s Policy therefore commits us to Consumer advocates argue banks currently hold this account. We have now waiving the fi rst exception fee a customer ‘profi teer’ from these fees, with the extended this reduced fee so it also incurs, provided they contact us. At that greatest impact being felt by customers applies to all credit card accounts held point we will discuss with the customer who are least able to afford them. by these customers. why the fee was charged and options to help the customer avoid the fee in It’s on the agenda in other countries. In ■ Helping customers avoid the fees the future. We have also committed to early 2006 the UK Offi ce of Fair Trading While these fees are avoidable, there providing this information in writing to issued industry guidance effectively are steps a bank can and should take to all customers who incur an honour fee capping default fees on credit cards at assist all customers to better understand on their ANZ transaction account. £12. Some UK banks have now joined the fees and arrange their fi nances so with regulators in a legal action to ask they do not incur them in the fi rst place. WHAT’S NEXT? the UK courts to clarify the legal position Customers have for some time been able These changes will not satisfy the of overdraft fees. to avoid dishonour fees by “turning off” concerns of all stakeholders. However we While there remain some unresolved their ability to overdraw their transaction believe we have reached some common legal questions about how banks apply account with electronic transactions. ground, in particular by addressing the these fees, we decided to act now, We are now making this same option impact exception fees can have on the rather than risk losing touch with our available on credit card limits as part most vulnerable customers. of the exception fee policies. customers. A failure by the banking We are also exploring how we can be industry to adequately respond to We will also continue to provide more proactive in talking to customers community concerns might also build customers with the option of taking up about these fees, especially those who the case for inappropriate regulation. the ‘safety net’ of an overdraft on their are incurring more than the average transaction account and the ability to number of exception fees per year.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 37 MANAGING THE SOCIAL AND ENVIRONMENTAL RISKS IN OUR LENDING DECISIONS

Banks are more than ever being Second and most important, any time Our focus is on ensuring that any held to account for the conduct we do decide to become involved in signifi cant social or environmental of their clients. How should these projects, we have a responsibility issues posed by the mill can and will banks respond to this scrutiny? to apply sound social and environmental be managed by the client in line with A transparent decision-making standards to our decisions, ensuring government regulations. The Equator process guided by clear policies the client is either developing the Principles have provided the framework and expert advice are key. project in line with those standards for this assessment. or has measures in place to improve We commissioned an independent We fi nance some socially and their performance. And it is important expert review of social and environmentally sensitive industries, these standards are applied consistently environmental risks which is focused and our increasing presence in Asia and transparently. on the issues our client needs to and the Pacifi c means doing business A CONSISTENT PROCESS manage. As at the end of September in some countries with developing Our commitment to the Equator Principles 2007, we are using this review to legal and governance frameworks. is consistent with this philosophy. examine our client’s proposed response Some stakeholders would prefer us to The Principles set out a step-by-step to issues raised in public State and exclude entire sectors or cut ties with process for project fi nanciers to ensure Federal Government assessments. the proper assessment and mitigation of clients who are facing challenging social We continue to communicate our social and environmental issues, such as and environmental issues with their progress to stakeholders throughout the pollution, conservation of endangered business. This approach can be process, via our monthly stakeholder species and sensitive ecosystems, and counter-productive, especially if we update, direct contact with interested impacts on affected communities and fail to assist a client with all the good parties and public statements posted Indigenous peoples. intentions to improve their practices. on our website. We have put in place Deciding whether to fund a new project The value of the Principles was measures to ensure all correspondence such as a coal mine illustrates the highlighted in 2007 when we were asked to us about the mill received a response complex questions we face. Coal is to consider fi nancing a pulp mill proposal which included information about our a fi nite resource and its processing in Northern Tasmania. decision-making process. into energy generates signifi cant The proposal has attracted wide-spread PUBLIC STANDARDS carbon emissions. attention over concerns about the We are also making public the social Yet while Australia’s economy potential social and environmental and environmental standards that guide transitions from its heavy reliance on impacts of the mill and government our business decisions. This year we fossil fuels, the coal industry continues approval processes were the subject consulted widely on our Forests Policy, to have signifi cant socio-economic of heavy scrutiny. the fi rst of what will be a series of social value, delivering substantial benefi ts We have been the target of email protest and environmental management policies to Australian communities through campaigns co-ordinated by environmental for Institutional clients. jobs, electrical power that underpins organisations throughout the year and a Feedback from clients on our draft Forests our industries and dollars earned number of shareholders and customers Policy suggests they are seeking this through exports. questioned our commitment to certainty – not only to help them secure So what is our role in these responsible lending. fi nance with ANZ, but also to better circumstances? First, we screen our This issue has posed signifi cant risks to understand what they need to do to clients for opportunities to help those ANZ and has highlighted for us the need improve their social and environmental operating in sensitive sectors manage to be clear with our stakeholders about performance, and ensure the long-term their impact effectively. the process we would take to make a sustainability of their business – decision on funding the mill. especially clients in emerging economies, In the case of a coal mining client, this where environmental management could be, for instance, through fi nance Equally important was clearly articulating practices are still developing. for investment in clean coal technology the issues that were relevant to us as a or carbon trading services to help them potential fi nancier (and by implication, reach emissions performance targets. those we were not involved in).

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 38 MANAGING THE SOCIAL AND ENVIRONMENTAL RISKS IN OUR LENDING DECISIONS CONTINUED

Josh Maddock, Vijay Satkunasingam and Daina Lambert from ANZ’s Project Finance team undertaking online training on the Equator Principles.

And while our strong preference is to PREPARING FOR FUTURE DILEMMAS rather than wait to respond to issues help clients improve their understanding We are now using this approach to set as they arise. We consulted with clients, and management of these issues, we the ‘ground rules’ for our involvement expert consultants and key NGOs on must also be prepared to walk away in emerging markets. For example, what our guiding standards should be. from the business relationship if they this year we set out to establish the After considering the feedback, we are unwilling or unable to respond to principles upon which we might fi nance decided to adopt best practice principles the standards we set. the production of palm oil. developed by the Roundtable on Sustainable Palm Oil (RSPO). The RSPO We also hope these policies will focus Demand for palm oil is growing is a global initiative established to our interaction with non-governmental internationally, both as an edible promote the sustainable growth and use organisations (NGOs), removing doubt oil and for use in the production of of palm oil, and includes representatives about our lending standards and biofuels. However, as oil palm can only across the palm oil chain, including clearing the way for more constructive be cultivated in tropical areas of Asia growers, manufacturers, banks and conversations about how these standards and the Pacifi c (mostly Malaysia and investors and environmental and are being applied in practice. Indonesia), its development has raised development NGOs. In addition to our Forests Policy, social and environmental implications, including tropical forest conversion, The principles cover issues such as Institutional lending policies on water, the preservation of soil fertility in oil soil erosion and confl icts between mining and energy are currently being palm nurseries, mitigation of impacts local communities and landowners developed and will be the subject of on natural resources and biodiversity and developers. consultation with stakeholders in 2008. (including forests) and responsible Our plan was to take a proactive consideration of employees and approach and set up clear standards communities affected by oil palm before we embarked on this activity plantations and mills.

‘Setting a clear policy is far better than over-promising what business can and should do and, worse still, bragging about claims of environmental virtue.’ George Littlewood, Adjunct Professor, Corporate Citizenship Research Unit, Deakin University, Melbourne, Australia

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 39 OUR RESULTS OUR CUSTOMER CHARTER AND BEYOND

Our Customer Charter sets the This year we opened our fi rst two full- ANZ’s Disability Action Plan contains benchmark for service to our retail service branches which are open seven further commitments to ensure our customers. It describes in specifi c terms days a week, in Melbourne’s Bourke Street products and services remain accessible how we provide convenient, simple Mall and in Brisbane’s Queen Street Mall. to customers with a disability, including: and responsible banking products and We now have extended banking hours in ■ ensuring internet banking system services. We’ve also made ourselves 164 branches. There are now 142 branches developments are trialled by people publicly accountable for meeting the open on Saturdays and 83 open on with varying disabilities prior to targets in the Charter and improving Thursdays and 21 on Fridays for extended implementation; our performance every year since 2001. hours (until 7pm). ■ improving online information to help A summary of our performance in We also announced some further people with disabilities access ANZ 2007 is detailed below including some initiatives for the next three years as part services; and information on other customer and of our commitment to providing more ■ developing guidelines and escalation consumer policy issues we’ve grappled convenient banking for our customers, processes to help call centre staff with this year. All Customer Charter including: respond to enquiries or issues about results disclosed in this report have ■ providing more ATM locations than disability access. been audited by ANZ’s internal audit any major bank; department as well as The Corporate PROVIDING QUICK, FRIENDLY AND ■ rolling out seven days per week Citizenship Company. RELIABLE SERVICE banking in every capital city; INVESTING IN CONVENIENCE This year we achieved a 77.3% overall ■ establishing 50 new local agencies customer satisfaction rating for our Over the last three years we have made a in rural towns; customer service in branches, compared concerted effort to expand our branch and ■ adding even more small business to 76.9% in 2006. Our friendly and ATM network in metropolitan, regional and specialists in our branches; and reliable service is measured by an rural areas of Australia to make it easier outbound calling program with new and for our customers to do business with us. ■ maintaining a 24-hour, seven days per week help desk for Internet Banking existing customers throughout Australia, In this time we opened 79 new branches, customers. who have opened a new account in a increasing our total number of branches branch in the last two weeks. The MAKING OUR ATMS MORE ACCESSIBLE (including agencies) to 819. Over the program aims to obtain real feedback same period, we increased our Australian All new ANZ ATMs are equipped with from real customers about their ATM network by to 2,287. an audio-enabling feature to allow account-opening experience. visually-impaired customers to listen In 2007 we continued on this program to an audio translation of information opening six new ANZ branches in rural as it appears on the screen. Over 1,700 Australia in Mittagong, Kingscliffe, Lismore ANZ ATMs have this feature and it will Square (NSW), Albany (WA), Port Augusta be included on a further 300 as they (SA), and Highfi elds (Qld). In addition we are upgraded due to age or wear and ANZ BRANCH NUMBERS 2004–2007 added 33 branches in metropolitan areas. tear. The design specifi cations for new Sept 2004 746 ATMs allow for wheelchair access by Sept 2005 760 keeping the screen and keypad a certain Sept 2006 785 distance from the fl oor. We also avoid Sept 2007 819 placing ATMs in locations that require Total fi gures include four regional agencies, branch stair only access. mergers and closures

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 40 OUR CUSTOMER CHARTER AND BEYOND CONTINUED

2007 CUSTOMER CHARTER PERFORMANCE PROMISE KEY RESULTS PERFORMANCE CONVENIENT

Convenient ■ Extended our branch network with 39 new branches, six of those in rural areas and 390 new ATMs Partially achieved

access ■ Met availability targets of 99% for our anz.com and EFTPOS and reached 100% availability for our customer contact centre

■ Phone banking availability was 98.9%, slightly below the 99% availability target

■ Internet banking was available 99.5% of the time based on unscheduled outages only. Including all scheduled outages needed to upgrade the internet banking platform, availability was 97.5%, below the 99% target. All scheduled outages occurred outside business hours

Quick, friendly ■ 85% of branch customers served within fi ve minutes, 98% served within 10 minutes Achieved

and reliable ■ Average waiting time in branches steady at 2.35 minutes, compared to 2.26 in 2006. Wait time service in branches is based on fi gures from the 213 braches using the Q-matic system

■ 91% of calls to our retail call centre number answered within 60 seconds. 92% of calls to the dedicated credit cards call centre answered within 60 seconds Swift resolution Complaints received by our central customer complaints channel: Achieved

of complaints ■ 100% responded to within 48 hours (98% in 20061)

■ 87% resolved within 48 hours (84% in 2006). Target 80%

■ 92% resolved within fi ve working days (90% in 2006). Target 90%

■ Average of 2.57 days to resolve a complaint (3.21 in 2006) SIMPLE

Simple products ■ Continued to offer clear and simple choices in personal banking accounts, including ANZ Access Basic Achieved with unlimited ANZ transactions and no monthly fee for seniors, health care cardholders, people under 18 and eligible Centrelink payment recipients

■ Internet banking transactions remain fee-free for all personal banking accounts

Fast account ■ 100% of personal banking accounts available within 24 hours of satisfying identity requirements Partially achieved

opening ■ 100% of personal loan and car loan applications were answered in one working day and over 99% of credit card applications answered within four business days

■ Signifi cant improvement in the performance of our Mortgages business, with 98.5% of standard home loan applications answered within two working days, up from 96.1% in 2006 Simple and clear Customers rated their overall satisfaction with ANZ’s communication in letters, statements, brochures, Partially achieved communications ATM and website messages at 7.9 out of 10 - the same result as last year

RESPONSIBLE Privacy Eighty-eight privacy complaints to our Customer Response Centre, with 57 breaches, compared to Ongoing 50 complaints and 32 breaches in 20062

Financial Literacy ■ Saver Plus matched savings program delivered to 1,385 low-income families Achieved

■ Trained an additional 1,040 fi nancial counsellors and community educators to deliver ANZ’s adult fi nancial literacy program, MoneyMinded

■ Assisted the delivery of MoneyMinded, to 22,458 Australians More information on ANZ’s fi nancial literacy and inclusion programs is available on pages 54–72.

Responsible ■ No breaches of ANZ’s responsible lending promises to protect certain vulnerable customers from credit Partially achieved lending card limit increase offers

■ No breaches of commitment to respond within 48 hours to customers who advise us by phone of their fi nancial hardship. One breach of promise to respond to customers within fi ve days where they provide written advice of their hardship

1 All 2006 data has been restated to rectify a data collection error which excluded some complaints with a resolution time longer than one month 2 2006 statistics have been restated to rectify a data collection error

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 41 OUR CUSTOMER CHARTER AND BEYOND CONTINUED

RESOLVING COMPLAINTS SWIFTLY PROVIDING SIMPLE PRODUCTS We have also simplifi ed the way In 2007 the number of customer We continue to work on making our customers nominate a Personal complaints to our Customer Response products and services as simple and Identifi cation Number (PIN) on their Centre (CRC), the fi rst step in our convenient as possible, both in response account. Previously all customers were customer complaints resolution process, to community concerns about complexity required to visit their local ANZ branch increased to 33,903 from 21,483 last in banking and also because there are to select their PIN. From September, year3. This increase may be due to a real business opportunities in providing customers will now have the option of combination of factors. First, we have clear, accessible choices for customers. selecting their PIN 24 hours a day, seven made it easier for customers to lodge days a week, at any ANZ ATM in Australia. In July, we responded to changes in complaints through our website and this Australian superannuation laws to give We were the fi rst bank to simplify the is now the second most used channel customers over 60 years of age more pricing of basic bank accounts and by customers to raise concerns, after convenient access to their retirement continue to offer concessions on these the telephone. Email complaints this funds. New tax rules introduced in July accounts for eligible customers. year accounted for 69% of all written 2007 allow people over 60 to access complaints, compared to 51% for the The ANZ Access Advantage account their retirement savings tax-free. six months to September 2006. A new provides unlimited ANZ transactions Accessing superannuation can be a product error which affected some for $5 a month, waived for students, complex and lengthy process. However, customers’ ability to use their credit card seniors, people under 18 and eligible the ANZ Prime Cash Management drove a sharp increase in complaints customers with a disability. ANZ Access Account was introduced to allow from December 2006 to February 2007 Basic is available to health care card customers of the ING OneAnswer as did a consumer organisation-led holders and eligible government benefi t pension product to make withdrawals public campaign against exception recipients and provides an unlimited directly from their superannuation ‘at fees in the middle of the year. number of ANZ transactions each call’ and tax-free, at a branch or through month and carries no monthly fee. The most common complaints were again ATM, EFTPOS or Internet Banking. related to fees and charges. However our This gives customers more fl exibility, FASTER ACCOUNT OPENING analysis shows that 61% of complaints enabling them to access their retirement All standard personal loan and car we received in 2007 were ‘non-avoidable’ funds without needing to transfer them loan applications were answered within – in other words were not related to a into a separate and taxable bank one business day, continuing the product or service failure but general account fi rst. improvement from the past three years. discontent about fees and charges or some other product feature.

While the number of total complaints PERSONAL LOAN APPLICATIONS 2005 – 2007 has increased, we continue to meet DATE APPLICATIONS BREACHES our targets for resolving complaints in a timely manner. We resolved 87% of Sept 2005 125,038 23 complaints in 48 hours (against a target Sept 2006 148,668 0 of 80%) and 92% within fi ve days Sept 2007 159,116 0 (against a target of 90%). This year we continued to streamline the complaints process in the CRC. CAR LOAN APPLICATIONS 2005 – 2007 In January 2007 we introduced a ‘phone prompt’ to automatically divert DATE APPLICATIONS BREACHES telephone enquiries to the most Sept 2005 135,747 127 appropriate area for response so Sept 2006 137,548 12 the CRC team could concentrate on complaints resolution. Sept 2007 129,041 0

3 2006 data has been restated to rectify a data collection error which excluded some complaints with a resolution time longer than one month

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 42 OUR CUSTOMER CHARTER AND BEYOND CONTINUED

Our Mortgages business has worked Practice, Corporations Act, Trade This will be accompanied in 2008 by hard this year to improve performance Practices Act and standards relating a customer brochure including tips on its fast account-opening commitment. specifi cally to advertising, including on managing credit card debt and This work has translated into a those of the Advertising Federation a dedicated credit card ‘microsite’ signifi cant drop in breaches of the of Australia, Australian Association containing a budget planner, the commitment to answer standard of National Advertisers and the new credit card payoff calculator and applications within two working days. Advertising Standards Bureau. information about where customers can Last year, of 278,257 application Communication material must be get assistance if they are uncomfortable received, 10,790 breaches were approved by legal, risk and brand with their credit card balance. identifi ed, resulting in a total of compliance representatives within ANZ In July, we made our MoneyMinded $107,900 in refunds to customers. prior to production and distribution. adult fi nancial literacy program widely That number has dropped this year to We have also focused this year on available to the broader community, 4,079 breaches out of a total of 266,142 providing our customers with simple including our customers, by launching applications, with $40,790 refunded. and clear information on fees and the full set of training modules online. This improvement was aided by an consumer debt. In addition to the increased focus on the Customer Charter Exception Fees Policies, we published commitment by leaders in our Mortgages a guide on our website on how to avoid business, as well as enhanced monitoring exception fees on both transaction of applications in progress to identify accounts and credit cards. potential breaches before they happen. Five out of 325,503 credit card applications were not answered within four business days, resulting in $50 in DISASTER RELIEF ASSISTANCE FOR CUSTOMERS customer refunds. We continue to provide access to relief packages for customers impacted by natural disasters or other unforseen events that threaten their jobs, businesses SIMPLE AND CLEAR COMMUNICATION and/or homes. We again measured our performance on this promise through research This year we assisted customers affected by: conducted by the Social Research Centre. ■ the drought, especially customers and communities in farming districts Overall satisfaction with ANZ’s customer experiencing low water allocations communication in letters, statements, ■ a series of bushfi res in Western Australia, including the communities of brochures, ATM messages and on the Dwellingup and Toodyay website was 7.9 out of ten, the same ■ Cyclones George and Jacob which caused signifi cant damage in Port Headland, rating as last year. South Headland and surrounding areas in Western Australia ■ an outbreak of equine fl u which threatened businesses in the Australian horse Customers were also asked to rate their racing industry. satisfaction on more specifi c questions about ANZ’s letters, brochures, ATM The measures in our support packages include: messages and other notices. Customer ■ cash grants for mortgage customers whose homes, business premises or farms satisfaction on the question of whether have been totally or partially destroyed our communications are written in plain ■ suspended repayments on loans for three months language was rated at 8 out of 10, up ■ fee waivers for loan restructures and early withdrawals from term deposit accounts from 7.9 last year. ■ temporary adjustments to customer lending limits including credit cards to assist customers to cope with unexpected expenses. All ANZ communication with customers and the broader community (including This year ANZ has paid out a total of $15,000 in cash grants as part of various advertising) must comply with relevant disaster relief packages. This amount does not include benefi ts provided in the laws, voluntary codes and standards. form of fee and interest waivers. These include the Code of Banking

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 43 OUR CUSTOMER CHARTER AND BEYOND CONTINUED

KEEPING PERSONAL INFORMATION interest rate and the customer chooses Paydown Plan in October 2006 and PRIVATE AND SECURE a repayment term to suit them, usually November 2006 have, on average, The number of privacy-related enquiries six, 12 or 24 months. decreased their overall credit card balance by 8.1% and 14.6% respectively. and complaints we receive from our The aim of the product is to provide customers to our Customer Response customers a tool to control their credit We will be conducting further analysis Centre (CRC) is used to measure our card balance without having to take out of this initiative over the coming months performance on privacy. The CRC is the a separate principal and interest loan to determine whether it should be fi rst step in our internal customer product such as a personal loan. As introduced as a standard product feature complaints resolution process. the instalment plan is listed separately and to identify possible changes we In 2007, 88 complaints were received, on their credit card statement, they should make to the offer. A possible 57 of these were confi rmed as breaches can track their repayment progress future product modifi cation could be to and all matters were resolved. This separately from their credit card activity. offer a limit decrease to customers at the time they take up the instalment plan. compares to 50 complaints received The offer has been welcomed by 4 last year and 32 breaches. customers, with anecdotal evidence Calculating repayments IMPROVING FINANCIAL LITERACY from our call centre suggesting Many credit card customers carry an This year we continued our investment in customers understand the offer and outstanding balance from one month fi nancial literacy programs. Information appreciate the opportunity to organise to the next. It is important for these on our progress in 2007 is available in their credit card payments in a more customers to understand how their the Community section of this report, structured way. credit card balance can grow over time and what level of monthly repayment from page 54. Since it was fi rst offered to selected they need to make to ensure their debt customers in October 2006, around RESPONSIBLE LENDING – KEEPING remains manageable. With this in mind, 1,150 customers have taken up ANZ OUR PROMISES AND BEYOND we developed a credit card calculator Paydown Plan. While we are still ANZ was the fi rst bank in Australia on our website to provide customers monitoring the health of accounts to to introduce Responsible Lending with tailored information to assist them determine whether the feature assists commitments as part of our Customer plan their credit card repayments. customers in the long term, early signs Charter. Under these promises ANZ suggest the product is helping customers The online tool allows customers to will not offer a credit card limit increase reduce their balance over time. calculate: to customers with a recent poor credit performance or who are struggling In October 2006, the average balance ■ the monthly payment they would need to make repayments on their card or transferred by customers onto an to make on their credit card account to to customers we know are on a instalment plan was $3,963. This pay off their balance within a nominated fi xed income (e.g. receiving a fi gure has reduced to $2,538 as at time frame; or government benefi t). 30 September 2007, meaning customers ■ the time it would take to pay off their have on average used the feature to pay balance with a nominated monthly With these promises now embedded off over 36% of their instalment balance. payment. into our credit card lending practices, our Consumer Finance business has Customers who took up the feature in We developed this calculator partly in been working on two further initiatives October 2006 have now, as an aggregate response to a proposal raised in the to assist customers to better manage fi gure, reduced the amount they initially Victorian Government’s 2006 review their credit card debt. transferred to an instalment plan by 57%. of credit laws to require credit card providers to include on all statements ANZ Paydown Plan While it appears these customers are a ‘health warning’ setting out the length ANZ Paydown Plan is a new credit card paying off the amount they transferred of time it would take a customer to pay account feature which allows customers to the instalment plan, a more important off their balance based on minimum to isolate a portion of their credit card question is whether they are reducing payments (usually 2% of their balance). balance and pay down that portion by their overall credit card balance. The monthly instalments. The instalment early indications on this measure are In our view, this information is relevant amount is subject to a slightly reduced positive – customers who entered a to a very small proportion of customers

4 2006 statistics have been restated to rectify a data collection error

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 44 OUR CUSTOMER CHARTER AND BEYOND CONTINUED

– we estimate around only 2.5% of the effectiveness of the approach Most of these customers are so far customers are in the habit of making and whether any changes are needed. making repayments in excess of their minimum monthly payments. On the The revised Policy and procedures will repayment plan. We will continue to other hand, the calculator provides be implemented by June 2008. monitor the accounts of these customers customers with easy access to the over the long term to assess whether the The review has been conducted with information that is relevant to them temporary repayment plans have helped. the assistance of fi nancial counselling when they want it. experts from Kildonan Uniting Care As part of this review, the credit card We are currently promoting the and the involvement of the Australian behaviour of participating customers availability of the calculator in regular Financial Counselling and Credit will be compared with a control group communications with customers. Reform Association. of credit card customers who have either not been offered early assistance, View the Credit Card Payoff Calculator The early assistance program in our or who declined our offer. We are also (see under ‘Tools and calculators’) credit cards business has resulted in exploring the viability of offering SUPPORTING CUSTOMERS IN customers entering temporary payment customers coming off a repayment DIFFICULTY plans which mostly involve a reduction plan an ANZ Paydown Plan as a more The review of our approach to customers in their minimum monthly payment and permanent offer to control their credit in hardship covers all areas of our retail a waiver of fees and interest. card balances. business, being Mortgages, Consumer Finance, Banking Products, Esanda and Small Business Banking. Included in this review will be the adoption of one consistent defi nition of hardship across BANK OF THE YEAR AWARDS the bank, which incorporates: ANZ was proud to be named as the inaugural ‘Socially Responsible Institution of the Year’ by rating agency CANNEX and consumer publication Money as ■ a defi nition of hardship based on what part of their Annual Bank of the Year awards. the customer can afford to pay rather than the cause of their fi nancial diffi culty The award seeks to assess the impact of socially responsible products and projects on the broader community, including low-income consumers, youth, ■ greater fl exibility for ANZ staff to offer Indigenous Australians and on the environment. hardship relief to customers without waiting for the customer to make a ANZ received the following additional awards as further recognition of formal application or until it becomes our commitment to quality customer products and services: apparent the customer fi ts into a ■ Bank of the Year pre-determined ‘category’ of hardship ■ Business Bank of the Year such as illness or unemployment ■ Home Lender of the Year ■ where possible tailoring repayment ■ Online Lender of the Year (through One Direct) plans to what the customer states ■ Readers’ Choice Service Excellence Award they can afford to pay at the time We were also recognised as having the best call centre in Australia for the ■ cutting back on the delay and third year in a row by the International Customer Service Professionals. paperwork involved in settling hardship arrangements, fi nalising them directly with the customer over the phone where possible. A three-month pilot of this new approach, including training of staff, commenced in August 2007. We are using the results of this pilot to judge

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 45 OUR CUSTOMER CHARTER AND BEYOND CONTINUED

REVERSING THE TREND leaving customers exposed to loss for or sell the product. This recognises ANZ has been piloting a reverse simple contract breaches such as not that the decision to acquire a reverse mortgage since late 2006 in conjunction signing a document. mortgage is an important decision, and the sale of this product should only be with the Over Fifty Group (OFG). Reverse In response we worked with OFG to carried out by specialists with in-depth mortgages allow customers to borrow ensure our ‘no negative equity guarantee’ knowledge of its features and risks. cash against the equity in their home was as clear as possible, especially in and are gaining popularity in Australia. relation to when it did not apply, and did ANZ and OFG are both members of The principal and interest is not repaid not become void due to minor, technical the Senior Australians Equity Release until the home is sold (usually on the breaches of the credit contract. Association of Lenders (SEQUAL) customer’s death or when the owner and therefore adhere to the SEQUAL We have also developed with OFG a voluntarily vacates the home). Code of Conduct. sales accreditation course which must These products have been the cause be completed by product specialists More information is available at of some negative consumer experiences before they provide product information www.sequal.com.au in the United Kingdom and the United States. Chief among concerns is the exposure of customers to downward trends in property prices, and the risk that the customer’s debt at the end of the loan may exceed the value of their property.

Before we launched a pilot of the joint KEEPING PACE WITH CUSTOMER SECURITY ANZ-OFG product, we consulted with ANZ was this year recognised as a leader in internet banking security for the consumer organisations, the industry development of a fraud detection system. regulator ASIC and the Banking and ANZ received the Innovation in Security and Fraud Management award at the Financial Services Ombudsman (BFSO) 2007 Financial Insights Innovation Awards. FraudLink BillPay is designed to to make sure we understood their identify and fl ag potentially fraudulent internet banking transactions, allowing concerns with reverse mortgages and ANZ to take action to minimise any potential loss to customers. The system has to explain our approach. cut ANZ’s Internet Banking fraud losses by 40%. An important aspect of ANZ’s product ANZ assisted Carreker Corporation in the development of the system, which is is the ‘no negative equity guarantee’, now being offered to other banks. This follows the substantial investment we have which ensures that whatever happens to made in fraud detection systems across all channels of electronic banking over the value of the property over time, the the last few years. Our credit card system Falcon monitors the credit card accounts borrower or the borrower’s estate will of our customers for suspect or unusual transactions worldwide which may suggest never owe more than the value of the the customer’s card has been stolen or used for unauthorised transactions. Similar property when the loan matures. This is systems are now in place to cover ATM and EFTPOS transactions. a common feature of reverse mortgages. We have this year continued to work on ‘two factor’ authentication for ANZ Internet However a concern expressed to us Banking and have commenced piloting ‘one-time password’ tokens to provide this by our stakeholders was that some second factor for identifying customers. products contain complex and technical exceptions to the guarantee, potentially

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 46 OUR CUSTOMER CHARTER AND BEYOND CONTINUED

CONSUMER POLICY ISSUES fi nancial literacy is an example of a COMMERCE COMMISSION This year we contributed to two public voluntary initiative designed to address INTERCHANGE PROCEEDINGS inquiries dealing with important the link shown in research between In November 2006, the Commerce consumer policy issues. socio-economic status and levels Commission in New Zealand brought of fi nancial literacy. In our view, proceedings under the Commerce Act The Australian Law Reform Commission Governments have a role in 1986 against Visa, MasterCard and is conducting an inquiry into Australia’s encouraging organisations to pursue all New Zealand issuers of Visa and credit reporting system. Among the these types of initiatives, recognising MasterCard credit cards, including issues covered in the inquiry is whether that regulation may not always be the ANZ National Bank. The Commission Australia should move to ‘comprehensive’ most appropriate response. alleges price fi xing and substantially or ‘positive’ credit reporting. We see lessening competition in relation to the this as a critical consumer policy issue, Subject to the rules of parliamentary setting of credit card interchange fees involving customer privacy and committees and other bodies, we publish and is seeking penalties and orders responsible lending. our major submissions on consumer and other issues on our website and in our under the Commerce Act. Research has shown that positive credit regular stakeholder update. Subsequently, several major reporting has the potential to lead to See previous submissions New Zealand retailers have issued lower default rates or an increase in proceedings against ANZ National Bank See stakeholder updates the availability of credit, but not both. Limited and the other abovementioned Given this, our submission to the ACCC PROCEEDINGS defendants seeking unquantifi ed inquiry recommended that the damages, based on allegations similar ANZ is currently the subject of Federal Australian Government take into to those contained in the Commerce Court proceedings brought by the consideration the current availability Commission proceedings. of credit in Australia, as well as the Australian Competition and Consumer broader social and economic impacts Commission (ACCC) for alleged price- ANZ National Bank is defending the of an expanded credit market which fi xing behaviour. The proceedings are proceedings. may result from comprehensive credit about the way ANZ interacted with a reporting. These impacts may include Queensland mortgage broker which an increase in the actual number of offered customers ‘refunds’ in relation consumers who experience fi nancial to ANZ products. diffi culty as a result of the wider The ACCC’s allegation is that by reaching availability of credit. an agreement with the broker to cap We also contributed to the Productivity the amount of refund passed on to Commission’s review of consumer customers who acquired ANZ products policy in Australia. Our submission from the broker, ANZ was engaging in highlights the need for consumer price-fi xing behaviour with a competitor in breach of the Trade Practices Act. protection law to be consistent across all States and Territories wherever ANZ has made public statements possible and also emphasises the outlining its position that the behaviour importance of voluntary corporate in question did not amount to price fi xing, initiatives in the overall consumer and will defend the proceedings, which policy framework. ANZ’s work in have commenced in the Federal Court.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 47 OUR RESULTS CUSTOMER ADVOCATE REPORT 2007

MESSAGE FROM THE There has been a steady decrease in I welcome and encourage feedback CUSTOMER ADVOCATE the number of complaints to ANZ being from our customers and staff on issues It is now fi ve years since my role as closed by the Banking and Financial or concerns they have with ANZ’s Customer Advocate was established. Services Ombudsman (BFSO) scheme, products and services. This feedback My job is to complement the existing which means ANZ is getting better at can help us continually improve our complaints resolution process at ANZ. resolving customer concerns in the service and prevent the same problems I become involved in disputes that fi rst instance. from arising in the future. have been through the ANZ’s internal A project underway in ANZ’s Personal complaints resolution processes and Division aims to improve the way where the customer is not satisfi ed with complaints data is reported across the the outcome. On some rare occasions, Division, so that it can be used more a particularly diffi cult complaint may be effectively by the business to avoid referred directly to me for resolution. errors in the future and improve our In those fi ve years, a real commitment service to customers. I am confi dent Bill Robinson to develop a problem-solving culture this focus on prevention will lead to within ANZ has taken shape. positive results in the near future. ANZ Customer Advocate

ABOUT THE CUSTOMER to fund computer training. The provider customers to the availability of relief ADVOCATE of this training had later become under the Uniform Consumer Credit Code. The Advocate operates insolvent and ceased operations. This has coincided with an internal independently from ANZ’s Some of these customers did not receive review of ANZ’s hardship policy and businesses and reports directly alternative training upon the collapse processes across our entire Personal of the company, meaning they were to the Chief Executive Officer. Division. The review has led to the left with an outstanding ANZ debt with The objective of the Advocate is introduction of a more fl exible and no benefi t received. to provide an independent and proactive approach to consumer impartial approach to negotiating Following discussion with the BFSO hardship and the BFSO has welcomed resolution of personal customer about some individual customer ANZ’s progress in this area. For more complaints and disputes. complaints arising out of this issue, information on ANZ’s review, please we contacted all relevant customers refer to pages 36 and 45. to confi rm those who had been BFSO REPORT OF CASES CLOSED adversely affected by the collapse of the training provider. MATTERS REFERRED TO In terms of escalated complaints, 2007 THE CUSTOMER ADVOCATE saw a further decrease in the number We are now in the process of reviewing 2003 70 of ANZ cases ‘closed within terms of all cases and have suspended all debt 2004 97 reference’ by the Banking and Financial collection activity in respect of these 2005 68 Services Ombudsman (BFSO) scheme, loans until the issue has been fi nalised. 2006 85 to 513. More importantly, 93% of these Where a student has not received a matters referred to ANZ by the BFSO benefi t from their ANZ loan due to the 2007 106 were resolved by ANZ without the need insolvency of the training provider, of a further investigation by the BFSO. we will write off the loan entirely. The NUMBER OF BFSO CASES CLOSED (TO 30 JUNE OF EACH YEAR) This is the second highest resolution review of customer cases is expected 2002 1032 rate of the four major banks during 2007. to run for three months. 2003 887 This year we also worked on resolving The BFSO also raised some concerns this 2004 695 two customer issues raised with us by year about our processes for identifying the BFSO. 2005 552 and responding effectively to customers The fi rst concerned customers who had in fi nancial hardship, in particular the 2006 552 taken out a special purpose student loan circumstances in which banks alert 2007 513

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 48 CUSTOMER ADVOCATE REPORT 2007 CONTINUED

REVIEWING OUR PROCESSES In 2008 we will also be reviewing MATTERS RECEIVED:106 This year we are commencing a review processes within the Customer Advocate Matters completed Matters referred back to Business of our internal complaints handling offi ce to identify ways we might better Unit as a first instance complaint processes. The project aims to improve meet our objective to resolve disputes Open files the internal reporting of customer quickly. The number of days required 5 complaints and their outcomes so for completion of the Advocate’s review corrective action plans to address exceeded our target of 20 days in a little potential systemic issues are addressed over 50% of complaints. In a number of 34 quickly and effi ciently. We are also instances the complexity of the complaint taking this opportunity to review all (at times across several different business 67 complaints processes throughout units) and the need to obtain additional the retail business and identify information and ANZ fi les contributed to improvements in accordance with the delay in early completion. Where any the Australian Standard 10002-2006 signifi cant delay was likely the customer Guidelines for complaints handling was kept informed of the progress of the in organisations. Advocate’s review.

BREAKDOWN OF COMPLETED MATTERS

TIME FOR FINDING FOR OUTCOME COMPLETION

NO. OF COMPENSATION NON-FINANCIAL <20 >20 BUSINESS UNIT COMPLAINTS CUSTOMER ANZ BOTH AMOUNT OUTCOME DAYS DAYS

Banking Products 24 11 8 5 25,280 15 12 12 Consumer Finance 19 4 11 4 3500 16 10 9 Mortgages 13 7 4 2 19,820 5 6 7 Small Business 3 1 2 – 30,000 2 1 2 Esanda 1 1 – – 3000 – – 1 Private Bank, ING, 5 1 3 1 5000 3 2 3 Trustees, Wealth Other 2 1 1 – 1000 1 1 1 TOTALS 67 26 29 12 87,890 42 32 35

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 49 CUSTOMER ADVOCATE REPORT 2007 CONTINUED

CASE STUDIES would be waived and that the payment customer and his counsellor were advised would be made upon the sale of the accordingly. Subsequently ANZ Consumer CASE STUDY 1 – NEGOTIATED property owned by the customer. Finance was advised of the need to review SETTLEMENT OF A DEFAULT IN A LOAN the wording of standard letters to ensure REPAYMENT. CASE STUDY 2 – AGENCY LISTING that accurate information is being given This case highlights the need for a FOR CREDIT CARD DEFAULT to customers. fl exible approach to be adopted by This case resulted in ANZ being required ANZ when there is a signifi cant change to review the wording of letters and CASE STUDY 3 – FAILURE TO CLOSE in the circumstances of a customer. advices to customers as to what action JOINT ACCESS ACCOUNT may be taken to advise credit reference Situation: In this case, a failure to properly agencies of ‘settle for less’ settlements implement a customer’s request to close A loan of $10,000 had been sought and reached for credit card defaults. was approved to an ANZ customer – the an account led to a breach of privacy loan was stated to be for the purpose Situation: and payment of compensation by ANZ. of home improvements. The loan fell A former ANZ customer had accrued In assessing compensation, there needs into default and recovery proceedings substantial credit card debts with a to be recognition of the nature and were instituted. In the meantime, the number of institutions, including ANZ. duration of the privacy breach and the customer’s affairs had been taken over In negotiations through a fi nancial consequences fl owing from that breach. by a State Protective Offi ce and it was counsellor on his behalf, ANZ agreed Situation: then put that ANZ could not establish to a ‘settle for less’ outcome where part A customer visited a branch to close that the loan had been properly of the outstanding debt was written off. a joint access account with her former approved, particularly having regard to In advising the outcome of these husband and opened an individual the subsequent change in circumstances. negotiations, advice had been given that account. She later ascertained that Review: ANZ reserved the right to list customers her former husband continued to be a with credit reference agencies in such The Customer Advocate was able to joint card holder, was issued with a new circumstances. In fact, ANZ had already establish that the loan advance had card, and was able to use the card to advised such a listing. Settlement was been made to the customer after a formal withdraw cash from the account and reached on the basis that such a listing application process through a branch. to check balances in his former wife’s had not been made, and a review was However the particular loan fi le was not individual account. She complained to sought when it became known that the able to be located. The proceeds of the ANZ that this involved both a loss of loan had been paid to the customer and listing had already been made. cash from her account and a breach of were withdrawn from her account shortly Review: her privacy in that the former husband after the advance. At the time of approval The Customer Advocate was not asked still had access to her new account. of the loan, there was no indication that to revisit the basis of the settlement of She sought compensation. the customer did not properly appreciate the payment of outstanding arrears but Review: the nature and obligations of the loan was asked to investigate the actions Upon review it had been confi rmed application, or that she was unable to taken to list the defaults, given the form that her former husband had made meet the repayments from available of wording used that such action ‘may’ withdrawals from the account over a reported income, or that the reported be taken. The Customer Advocate’s period of time and had also accessed the purpose of the loan was inappropriate. review confi rmed that the listing had in account balance on a number of occasions. Resolution: fact been made at the time of settlement. ANZ replaced the amount of cash that had It was accepted by ANZ that there had Resolution: been withdrawn. The Customer Advocate been a change in circumstances and that The Customer Advocate was satisfi ed that was then required to assess the amount the customer’s affairs were now being the customer believed he was negotiating of compensation that should be paid to managed by the Protective Offi ce. At the for a ‘without prejudice’ settlement and recognise the ongoing breach of privacy same time, the Advocate established had he been aware of the fact that a that had occurred. After a negotiation that the loan was validly and properly listing would be made, he may have taken with the customer, an amount of $3,000 made at the time of application. A a different view of the advantages of was agreed upon and this amount was negotiated solution resulted in ANZ settlement. Consequently arrangements paid to the customer as compensation agreeing to the repayment of an amount were made with ANZ Consumer Finance for the privacy breaches that had of 50% of the loan, that credit charges for the listing to be recalled and the occurred over a signifi cant period of time.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 50 OUR RESULTS RESPONSIBLE DECISIONS

The assessment of social and Key issues raised by stakeholders Following an independent review environmental issues is now an during the consultation were: of ANZ’s compliance with the OECD integral part of our lending and ■ ANZ’s position on contentious issues Guidelines for Multinational Enterprises investment decisions in our Corporate such as forest conversion versus this year, we updated the screening and Institutional businesses. This sustainable forestry tool to ensure a more comprehensive year we continued to develop the assessment of human rights issues. ■ the scope of the policy, including its decision-making framework to ensure This year we also conducted an internal application to activities which take our staff make balanced and informed audit of the tool and its application in place outside forests yet have an decisions based on sound social and the business. It was designed to assess impact on forests environmental standards. the quality of screening conducted by ■ the approach of the Policy to forest our staff and identify opportunities to SOCIAL AND ENVIRONMENTAL certifi cation schemes. improve employee understanding of MANAGEMENT POLICIES AND social and environmental issues in GUIDELINES The Policy consultation process was more complex, and therefore lengthier, business decisions. In response we As at September 2007, our Forests Policy improved the information available was in the fi nal stages of approval for than we had expected. Given the technical nature of many issues raised, to staff about the risks associated with public release. The Policy is the fi rst in different sectors, including providing what will be a series of sector-specifi c we have followed up many submissions directly with stakeholders to ensure we access to United Nations Environment social and environmental management Program – Financial Institutions policies to guide our lending decisions. have understood all feedback. As a result, we did not meet our target to release the Sector Guidelines on our intranet site. When fi nalised, the Forests Policy Policy before September 2007. The audit fi ndings also encouraged will set out the requirements that must the development of our own Industry Work on further policies has commenced be met before ANZ will enter into a Guidance Notes. and stakeholder consultation is transaction that has a potential impact expected to begin in November 2007 INDUSTRY GUIDANCE NOTES on forests or forest biodiversity. with the policies fi nalised for approval This year we have been working with Under the core standards in the Policy, during 2008. the Victorian Environment Protection ANZ will: Authority (EPA) to develop Industry SCREENING OUR CLIENTS ■ not support illegal logging Guidance Notes to provide guidance for Our client screening tool provides a our staff on the social, human rights and ■ not fund logging of areas of high practical way for our staff to assess the environmental issues that are commonly conservation value or areas protected social and environmental impact of our associated with the industry sectors by specifi ed legislation or international wholesale clients. It takes staff through a we service. environmental treaties and conventions series of questions designed to gauge the ■ require clients to conduct social and social and environmental risks associated The Guidance Notes contain an overview environmental assessments, develop with the client’s business and therefore of a sector’s regulatory requirements, key action plans and management systems the implications of ANZ supporting that social and environmental issues facing and actively monitor impacts of their business. Where issues are identifi ed the sector and the measures we would proposed project. during screening, we evaluate the nature expect a client from that sector to take in of the issue, any existing or potential order to effectively identify and manage We consulted with over 85 stakeholder stakeholders concerns, and the capacity their social and environmental risks. groups on the Policy in 2007 and and commitment of the client to manage received over 55 written submissions. the issues. We also met face to face with over 35 stakeholders, including clients, The tool is now fully integrated into environmental NGOs, politicians, the normal credit assessment processes government representatives and for new facilities and clients in our forest industry associations. Institutional business. The screen is applied to existing Institutional clients on an annual basis and again before entering any major new transaction.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 51 RESPONSIBLE DECISIONS CONTINUED

We have so far developed Guidance STAFF TRAINING AND EDUCATION ANZ has also made use of external Notes for: In addition to this guidance, we have experts to improve employee expertise ■ agriculture this year invested substantially in on these issues. For example, expert measures to raise awareness of these briefi ngs were delivered to Institutional ■ acquaculture issues among ANZ Institutional staff. staff on: ■ forestry We have developed an Eco-Literacy ■ emerging business opportunities in ■ fi shing program for all ANZ staff in partnership sustainable banking ■ mining (coal, metal ore, with WWF Australia. The program ■ global trends in sustainability, including non-metallic and mineral) includes face-to-face workshops developments in North America and ■ oil and gas extraction and exploration focusing on environmental issues in European fi nancial institutions lending, including how staff can improve ASSESSING ENVIRONMENTAL IMPACT ■ improving processes for the screening their assessment of environmental risks OF ANZ’S LENDING IN AUSTRALIA of clients in lending, and opportunities to offer Last year we reported on a detailed clients products and services to improve ■ stakeholder engagement 5 analysis we conducted of our lending their own environmental performance. ■ environmental risk communication. portfolio to identify clients most affected Over 300 staff in our Institutional There is also ‘on the job’ support by social and environmental factors business have participated in this for our staff. The ANZ Institutional like heavy reliance on water or fossil program and 750 have registered to and Corporate Sustainability team fuels. This analysis used an existing receive additional online information provides an internal advisory desk methodology developed by the CSIRO and news on environmental issues. and the University of Sydney. service to support the implementation An intranet site has also been of social and environmental assessment This year we continued to use this developed this year, also in partnership tools and processes and consults analysis to improve our decision making with WWF Australia, containing a with the business on the social and understand the risks our clients resource library of reports, papers, data and environmental assessment of are exposed to. ANZ will be refi ning and studies on environmental issues large and/or complex transactions this analysis in 2008 by developing a such as climate change, sustainable and projects. benchmark for our clients’ performance banking and biodiversity. in key high-impact sectors. We will proactively contact clients with a high level of reliance on water and energy to encourage them to acknowledge NO. 1 RELATIONSHIP BANK their exposure to water and energy risk and to develop strategies to manage ANZ has retained the position as No. 1 Relationship Bank in Australia these business risks. for the second consecutive year in the 2007 Peter Lee Associates Large Corporate and Institutional Relationship Banking survey. The survey covers Institutional Banking, Financial Institutions, and larger Corporate Banking clients and is based on the views of COOs, CFOs, and Treasurers from around 750 companies. ANZ National Bank Limited won the same award for the New Zealand survey.

5 ANZ fi rst conducted an assessment of the social and environmental impacts of its Australian Institutional lending portfolio in 2006. The analysis was based on the methodology established in the ‘Balancing Act: A Triple Bottom Line Analysis of the Australian Economy’ (CSIRO/University of Sydney, 2005). ANZ was advised by Integrated Sustainability Analysis at the University of Sydney in carrying out this assessment.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 52 RESPONSIBLE DECISIONS CONTINUED

IMPLEMENTING THE EQUATOR staff. The training was provided by However adoption of the Equator PRINCIPLES international Equator Principles experts Principles has brought a structure to The Equator Principles were established Sustainable Finance Limited and aims our assessment processes and we are to provide a common and well-respected to raise awareness of the purpose of extending the approach to other parts framework for banks around the world adopting the Principles, how they are of our business. We are using the IFC to apply sound social and environmental applied to proposed transactions and the Performance Standards which underpin standards to project fi nance decisions. likely impact on our fi nancing activities. the Principles as a reference in the This framework is particularly important While the Equator Principles have development of our social and for projects in emerging economies improved the way projects are assessed environmental policies. For example, with developing legal and governance by banks, we found during their our Forests Policy will require all clients, structures. implementation at ANZ that they largely regardless of jurisdiction, to conduct social and environmental assessments, ANZ adopted the Principles in December refl ect what we were already doing to manage the overall risks of projects we develop action plans and management 2006 and they are now being fi nance. This is because social and systems and actively monitor impacts implemented fully across the project environmental risks in project fi nance are of their proposed project in line with fi nance areas of our Institutional business. so intimately related to fi nancial risk – the requirements of Principle 1 of the Training on the Equator Principles has if not managed properly, these risks IFC Performance Standards. been provided to 69 ANZ staff in Hong can threaten the long-term viability of a Kong, Singapore, Sydney and Melbourne, project by causing delays, costly changes including 75% of our Project Finance to project design and cost overruns.

PROJECTS REVIEWED FROM DECEMBER 2006 TO 30 SEPTEMBER 2007 EQUATOR PRINCIPLES – 2007 REPORT CONFORM Since our adoption of the Equator REVIEWED TO EQUATOR PRINCIPLES* FINANCED Principles in December 2006, we have reviewed 26 projects. Eight of these Category A 5 5 4 projects were in developing or Non-High Category B 18 17 10 Income OECD countries. Sixteen of the Category C 3 3 2 26 projects reviewed were fi nanced Total 26 25 16° during the year. Projects did not proceed for a range of reasons, including their inability to meet the Principles. LOCATION OF PROJECTS REVIEWED PROJECTS IN HIGH PROJECTS OUTSIDE HIGH * Projects which met the requirements of the Equator INCOME OECD COUNTRIES INCOME OECD COUNTRIES Principles at the time of review ° One of these 16 projects did not meet the full Category A 3 2 reporting requirements of the Equator Principles however, and has therefore been assessed as Category B 14 4 non-compliant. The non-compliant project, although fi nanced after Category C 1 2 ANZ adopted the Equator Principles, was negotiated prior to the Bank’s adoption of the Principles and Total 18 8 the client was permitted to continue managing its environmental and social performance to ANZ’s pre-Equator Principles internal standards. The PROJECTS REVIEWED BY SECTOR variance was considered minor and related to a process rather than material environmental and social issue. NATURAL POWER & RESOURCES INFRASTRUCTURE UTILITIES DIVERSIFIED Category A 4 0 1 0 Category B 4 6 3 5 Category C 0 0 1 2 Total 8 6 5 7

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 2 CUSTOMERS 53 Susan Gribble from the Brotherhood of St Laurence facilitates a MoneyMinded workshop in regional Victoria.

section 3 community

WE ARE WORKING TO HELP IMPROVE THE SOCIAL AND ECONOMIC WELLBEING OF OUR COMMUNITIES, ESPECIALLY FOCUSING ON SOME OF THE MOST DISADVANTAGED PEOPLE IN SOCIETY. OUR GOAL IS TO EARN COMMUNITY TRUST.

WHERE WE’VE BEEN 1999–2006 KEY ACHIEVEMENTS 2007 FUTURE PRIORITIES ■ Research into Adult Financial Literacy ■ Successful pilot of a loans program for ■ Release fi nancial literacy research in Australia low-income earners ■ Enable 1,500 people to participate ■ Partnership approach to community ■ Corporate Australia’s fi rst Reconciliation in Saver Plus, 30,000 in MoneyMinded investment strategy aligned with Action Plan and 300 in Progress Loans social issues affecting the fi nancial ■ 73,000 hours of employee volunteering ■ Achieve 70,000 hours of staff services industry time and total community investment volunteering and 15% participation ■ Recognised with 2006 Prime of $17.8 million in payroll giving Minister’s Special Award for Impact ■ Programs and partnerships recognised ■ Achieve the commitments in our on the Community again with Prime Minister’s Award Reconciliation Action Plan

ANZ CORPORATE RESPONSIBILITY REPORT 2007 54 OUR APPROACH EARNING COMMUNITY TRUST

ANZ has made genuine, long-term commitment to improving financial literacy and inclusion – the issues most relevant to our retail business. We also encourage and enable our people to use their skills and expertise to support the causes that are important to them – in the process supporting hundreds of local community charities.

Our Community Charter describes our approach to Corporate Community Investment. The Charter was introduced in 2004 and we’ve since made strong progress in delivering on its commitments. The results of innovative programs, such as Saver Plus, speak for themselves with research showing it continues to achieve its primary objective of PRIME MINISTER’S helping low-income earners establish a long-term savings habit. AWARDS FOR EXCELLENCE IN The response from our people has also been inspiring. For example, ANZ employees COMMUNITY BUSINESS have contributed more than 156,000 hours of paid volunteering leave since this PARTNERSHIPS initiative was introduced in 2001. This year, our total community investment was more than $17.8 million.* VICTORIAN STATE AND MULTI-STATE AWARD WINNER 2007 We also know times have changed since the Charter was introduced. Next year we will engage our people, partners and stakeholders to review it. We envisage more specifi c commitments to improve the fi nancial capabilities and wellbeing of Indigenous Australians and people with disabilities as we sharpen our focus on assisting the most vulnerable people in society. Both the community sector and our people are also calling for a greater focus on skill-based volunteering and secondments. The Charter will evolve to refl ect this.

* ANZ uses the London Benchmarking Group model (LBG) which is an international standard for measuring corporate community investment programs.

TOTAL VALUE OF COMMUNITY INVESTMENT

2003/04Aust $6,580,173

2004/05Aust $8,261,025

2005/06Aust/NZ $13,849,925

2006/07Global $17,810,087

COMMUNITY INVESTMENT PER EMPLOYEE

2003/04 Aust $342

2004/05 Aust $402

2005/06 Aust/NZ $442

2006/07 Global $481

London Benchmarking Group benchmark for Australia and New Zealand ($213)

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 55 WORKING WITH OUR COMMUNITY TO IMPROVE FINANCIAL LITERACY AND INCLUSION

National research conducted ■ MoneyMinded is a fi nancial education PARTNERSHIPS FOR CHANGE by ANZ over several years has program and resource designed to help A cornerstone of our community consistently shown a strong link people, especially those on low incomes, investment strategy has been the between socio-economic status make better and more informed choices development of deep partnerships with and levels of financial literacy about their money. It contains no ANZ a range of community organisations who and inclusion in Australia. We branding or product information. A total share a mutual interest in improving have used the findings of this of 22,458 people have participated in fi nancial literacy amongst some of the research to inform our business MoneyMinded this year and more than most vulnerable groups in our society. strategy and guide our responses 40,000 in total since the program began Our initial aim was to help those people in 2004. An additional 1,040 people were to the key issues identified. in segments of the community who trained to deliver the workshop this year, in the past had been excluded from Our community investment strategy bringing the total number of people mainstream banking. We recognised focuses on developing and delivering trained to 1,972. early that these people were unlikely innovative programs to help some of ■ Progress Loans is a loans program to trust us and approached experienced our community’s most vulnerable people developed with BSL and available to and forward-thinking community improve their lives by building their people who have had diffi culty accessing organisations to assist in reaching fi nancial knowledge, skills and affordable, fair and safe credit from the people we wanted to help. confi dence. For example: mainstream providers. Since Progress It has taken time to establish strong ■ Saver Plus was developed by ANZ and Loans started, 209 people have obtained relationships with these community the Brotherhood of St Laurence (BSL) to credit to purchase essential household partners. Some were strong critics of the help families on low incomes improve items and services. The majority of these banking sector. Others were wary of the their fi nancial literacy, set and achieve people (71%) are women. The average level of commitment from corporations. a savings goal, and establish a long-term loan size is $1,722 and all loans are savings habit. ANZ matches every dollar performing ahead of the mainstream rate. All welcomed our long-term commitment saved by participants (up to $1,000) to helping to change the systemic issues ■ MoneyBusiness is a unique fi nancial towards primary, secondary or vocational that contribute to social and economic literacy and money management program education costs. disadvantage. For us, this included a tailored specifi cally to help improve willingness to listen and respond to A total of 2,247 people have now Indigenous people’s money skills and ‘hard truths’ about how banks had in participated in the program – 1,385 this develop a stronger savings culture. part contributed to these issues. year alone. Together, they have saved The program was developed more than $1.5 million and each person in partnership with the Australian Today, we partner with organisations is eligible for up to $1,000 in matching Government and is being piloted in such as BSL, The Benevolent Society, on completion of the program. Research six communities in remote Australia, The Smith Family and Berry Street conducted by RMIT University showed assisting participants to better Victoria in the design and delivery of that 75% of participants continued to understand money problems and put specifi c programs. We also have valued save the same or more 12 to 24 months in place strategies to address them. relationships with a range of other after completing the program and organisations that enable us to Research shows these programs are approximately 95% are reaching their understand issues in the community making a real, positive difference to the savings goal during the program. and our role in addressing them. lives of adult Australians and their families. More savings, a better understanding of Our approach and results have been money issues and access to effective recognised in consecutive years by the money management techniques and tools Prime Minister’s Awards for Excellence are helping low-income earners become in Community Business Partnerships more fi nancially capable and confi dent and as leading practice globally on into the future. the Dow Jones Sustainability Index.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 56 WORKING WITH OUR COMMUNITY TO IMPROVE FINANCIAL LITERACY AND INCLUSION CONTINUED

A partnership meeting between Michelle Wakeford and Cath Scarth from the Brotherhood of St Laurence, and ANZ’s Kate Millar and Michelle Commandeur.

BUILDING ON OUR STRENGTHS worked closely with Reconciliation We are contributing to international While ANZ has fi nancial knowledge, Australia on our Reconciliation Action discussions on the challenges facing expertise and resources, our partners Plan in support of Indigenous cross-sector partnerships through our know intimately the people who need Australians. involvement with the Partnership Brokers’ Accreditation Scheme (PBAS) help and the issues that matter to them. Our partners have also accessed This includes sharing case-studies that They also have the expertise to deliver professional expertise from ANZ people may help other organisations draw appropriate services. These are highly on issues such as marketing and upon our experience in tackling similar valuable resources – just as important information technology, as well as issues and opportunities through a as a fi nancial investment – required to general volunteer support for a range partnership approach. achieve our shared objectives. of initiatives. IDENTIFYING AND RESPONDING Our community partners value ANZ’s WORKING THROUGH CHALLENGES TO NEW OPPORTUNITIES strong leadership – especially our We have been working with our partners support for comprehensive research to understand how to effectively Looking ahead, our partners are into the issues of fi nancial literacy, measure the success of our programs. considering ways they can use our fi nancial exclusion and fi nancial Together, we have recognised they approach to respond to emerging issues diffi culty in Australia, which both inform should not be judged solely by output, such as social exclusion in Australia. and affi rm the solutions we develop. and are now focusing our research to Our Reconciliation Action Plan was cited Seeing the value of partnerships as determine the social and economic as an example of such an approach, broader than any one particular program benefi ts of our programs for participants while the impact of carbon pricing for is also important. For example, we and their families. low-income earners was identifi ed as consulted closely with a range of Our partnerships with the Australian an immediate issue requiring deeper partners, community organisations and Victorian Governments bring our research and a considered response. and the fi nancial counselling sector fi nancial literacy programs to people when we reviewed our practices related and communities that would otherwise to the marketing of credit limit increases have been diffi cult to reach, such as to low-income earners, and the cost and Indigenous communities in remote application of exception fees. Similarly, Australia. Over time we have developed when developing our approach to a better understanding of the respective Human Rights we were able to draw roles that each sector - government, upon the Brotherhood of St Laurence’s corporate and community - can play in expertise on these issues. We also this process.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 57 MAKING PROGRESS ON SMALL LOANS

A significant achievement in Since it commenced, 209 people have ‘It was a really good sense of 2007 was the completion of benefi ted from Progress Loans in achievement. When I fi nished, ANZ our Progress Loans pilot. This Victoria. The majority of loans were sent me a letter thanking me. It’s usually program was developed in provided to women. The average loan us against the banks. I found this a partnership with the Brotherhood size is $1,722 and the repayment pleasant relationship. I guess my credit of St Laurence and provides performance of Progress Loans rating’s pretty good now.’ customers currently exceeds that of loans to people on low incomes Another customer was able to repair mainstream personal loan customers. who otherwise have difficulty his car which was essential to gaining accessing credit from mainstream Some customers also have the employment and a mother used Progress providers. It is now one of the opportunity to participate in ANZ’s Loans to purchase a car to give her most successful programs of its MoneyMinded and Saver Plus fi nancial disabled child the opportunity to kind in Australia. literacy programs. Here they can learn access appropriate health care on about saving and the ‘mechanics’ of a regular basis. ANZ commissioned Australia’s fi rst loans such as signing a contract, ANZ and the Brotherhood will continue research into the issue of fi nancial the structure of a personal loan and exclusion in 2004. The fi ndings revealed to monitor and enhance Progress Loans making repayments. that many Australians struggle to access over the next 12 months, refi ning appropriate low-cost, fair and safe Consistent with evaluations of Saver aspects to improve its commercial fi nancial services from mainstream Plus and MoneyMinded, feedback sustainability and ensure a positive providers and around 6% of adults have from participants in the Progress Loans customer experience. This will include minimal access to fi nancial services. pilot program shows the real benefi t a comprehensive evaluation and an is more than simply access to money. assessment of the social impact of the These people are often forced to rely on The loans help to increase their program. The goal remains to grow the predatory lenders for emergency fi nance. confi dence, their sense of inclusion Progress Loans program and make it They include loan sharks, pay day lenders in society and their own ability to available in all states and territories and pawnbrokers who charge very high improve their circumstances. across Australia. interest rates, and in some cases, use threatening collection methods. One customer, Kevin, used his Progress Loan to buy a fridge while also building In response, ANZ and the Brotherhood a repayment history with a major bank. of St Laurence launched Progress Loans in May 2006 to provide people on low ‘You can’t imagine life without a fridge. incomes with access to loans of between I suppose an esky would have been $500 and $3,000 to pay for household the next best thing. The loan was just goods and services, self-improvement, a godsend. Knowing you’ve got a fridge, medical and car expenses. you can stock up on specials,’ said Kevin.

PROGRESS LOANS (MAY 2006 – SEPTEMBER 2007) Number of loans approved 209 Number of loans drawn 179 Number of applications 301 % of approvals 69% Number of defaults 0 % men versus women 29% vs 71%

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 58 IMPROVING INDIGENOUS FINANCIAL LITERACY AND EMPLOYMENT OPPORTUNITIES

This year ANZ launched its Australians was also vital. The Plan Reconciliation Action Plan – the builds on current partnerships fi rst of any major Australian with Indigenous and community company. The Action Plan sets organisations and the Australian out specifi c commitments to Government, which deliver innovative assist Indigenous inclusion programs such as MoneyBusiness. through employment, fi nancial A SHARP FOCUS AND TIME FRAMES literacy, cultural recognition and International service consultant, Benson The Action Plan includes specifi c Saulo, presents to the Reconciliation Action awareness, and capacity building. objectives and details about how Plan Governance Group. It includes the most signifi cant we were going to achieve them. Indigenous employment targets For example, we aim to: of any major Australian company. ■ Recruit 300 young Indigenous trainees Indigenous disadvantage is one of the (100 each year) by end 2009 including those relating to personal most pressing social problems facing ■ Promote 20 Indigenous employees fi nances, is not inconsistent with a Australia, touching on a range of on merit to management positions commitment to family and community. socio-economic issues such as health, by end 2014 Another important initiative this year has education, employment and housing. ■ Expand the reach of ANZ’s fi nancial involved improving our understanding of Community organisations and literacy and inclusion programs for the issues related to Indigenous home governments cannot address these Indigenous communities ownership, which is low (28%) relative issues alone. to non-Indigenous Australians (71%) ■ Develop better understanding within and also when compared to Indigenous Taking action also assists the continued ANZ of Indigenous perspectives. growth of our business. Establishing peoples in other developed countries. There are public time frames for each a higher representation of Indigenous Home ownership has been linked to action, ensuring we are accountable people in our workforce and better broader social and community benefi ts for follow-through on our commitments. understanding and responding to the and has been recognised by many And each commitment has an owner needs of Indigenous consumers will experts as an important element to at ANZ – someone who is personally only make ANZ more relevant – improving the lives of Indigenous responsible for maintaining momentum particularly in some of our communities Australians. But our role is not as and delivering results on the promise. where Indigenous people make up simple as offering more home loans 40% of the population. IMPROVING OUR UNDERSTANDING to Indigenous consumers. In developing our Action Plan, we We have much to learn about the issues We have conducted in-depth consultation sought input from Reconciliation facing Indigenous Australians and we with Indigenous people, community Australia as well as a number of rely on the feedback of Indigenous groups, housing groups and government Indigenous leaders, community community partners and other agencies to better understand specifi c organisations and government agencies. stakeholders to ensure our initiatives actions we might take. Should the focus They encouraged us to build on the work remain appropriately targeted. The be on encouraging saving? Is home we were already doing in fi nancial experience of our branch staff is also vital. ownership a common aspiration of literacy and focus on our strengths. Our involvement in the development Indigenous people? For example, ANZ is a large national of the My Moola: Opening Financial Early feedback suggests we need to do employer with reach into metropolitan, Pathways pilot in the Goulburn Valley more to understand what is important regional and remote communities region of Victoria has given us a deeper to Indigenous people and that housing across Australia. It was therefore clear appreciation of the concept of communal needs can differ from community to to us that creating more employment for ownership in Indigenous communities community. It is clear there will be no Indigenous people would form a core and what this means for fi nancial literacy ‘one size fi ts all’ solution. In 2008, we part of our Reconciliation Action Plan. programs. My Moola includes a series of will use this and other feedback to Continuing our work to improve the workshops to help young participants develop specifi c responses to help fi nancial literacy and money and their families understand that having improve Indigenous home ownership management skills of Indigenous personal goals and life objectives, in the coming years.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 59 OUR RESULTS UNDERSTANDING THE VALUE OF OUR COMMUNITY PROGRAMS

ANZ contributed just over $17.8 million performance against other corporate TOTAL CONTRIBUTION to the community during the past year. members locally and internationally. BY TYPE % Cash This represents a 28% increase on last The LBG model is based on the Management costs year’s fi gures due to improved reporting Time reporting of charitable donations, In Kind in more locations and new initiatives in community investment and commercial the Group. initiatives. The model also includes 14 An important focus of our community reporting any leverage, defi ned by LBG investment strategy is assessing as third party-resources attracted as a 19 the value of our work. We conduct direct result of the company’s initiative 60 independent evaluations of our or participation. 7 fl agship programs and report both our Mandatory contributions and business inputs and the community impacts basics (including foregone revenue using the London Benchmarking Group through waived fees) are not reported (LBG) model – the global standard for under the model. reporting corporate community investment. TOTAL CONTRIBUTION BY TOTAL CONTRIBUTION BY ANZ has applied the LBG model since LBG SUBJECT AREA % ANZ SUBJECT AREA % 2005. We are one of 150 companies Education & Young people Financial literacy & inclusion globally and one of 32 in Australia and Health Employee Engagement Economic development Other New Zealand which report and evaluate Environment community investment using LBG. Arts & Culture Social welfare 27 The LBG model’s independent, defi ned Emergency relief Other criteria enable us to accurately measure 51 4 1 our contribution in a range of areas and 8 4 2 determine the real outcomes resulting 36 22 in the community. It also enables us to strategically plan our community investment activities in an informed 44 way, and to benchmark our 1

PROGRAM % OF CATEGORY DEFINITION EXAMPLES INVESTMENT TOTAL LBG AVERAGE1

Community Strategic investment in programs and Saver Plus 58% $10,254,580 $2,393,510 investment partnerships to address issues that will MoneyMinded benefi t both the community and the business over the long term MoneyBusiness

Charitable Donations made from a sense of Community 36% $6,353,788 $836,531 donations moral responsibility, with no long-term Giving implications or strategic intent Volunteering

Commercial Initiatives to promotes the business while Blue Week 6% $1,201,719 $822,971 initiatives also including a community contribution Comic Relief

Total ANZ contribution $17,810,087 $4,400,000

Percentage of pre-tax profi t 0.29%

1 London Benchmarking Group average for Australia and New Zealand

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 60 OUR RESULTS FINANCIAL LITERACY AND INCLUSION PROGRAMS

SAVER PLUS – CREATING THE HABIT Community Development, which has OF A LIFETIME contributed $1.5 million over three years. Saver Plus is designed to help families In extending Saver Plus this year with on low incomes improve their fi nancial our existing partners, 2,247 people have literacy, set and achieve a savings goal, now participated in the program – 1,385 Saver Plus participant Ruth and her and establish a long-term savings habit. this year alone. They have saved more children after completing the program this year. ANZ matches every dollar saved by than $1.5 million and each person is participants (up to $1,000) towards eligible for up to $1,000 in matching on primary, secondary or vocational completion of the program. Research education costs. conducted by RMIT University showed ‘Learning how to save has meant I now Saver Plus was developed in partnership that 75% of participants continued to have more say over what products are with the Brotherhood of St Laurence save the same or more 12 to 24 months purchased for my daughter’s education. (BSL) in 2002 and is delivered by our after completing the program and It has also meant neither of us has partners The Smith Family, Berry Street approximately 95% are reaching their experienced the usual high levels of Victoria, The Benevolent Society and BSL. savings goal during the program. stress usually associated with fi nding the money for these costs.’ This year the program was expanded But the impact is much more than having a little extra cash. from four to 19 locations across This experience is backed up by Queensland, Victoria, ACT and New One participant was stressed and evaluation carried out by RMIT South Wales. In Victoria, this has been nervous about her fi nances when she University which found participants achieved through a unique tri-sector joined Saver Plus. After taking part in were more confi dent about managing partnership with ANZ, BSL and the the program, she says her family’s life their money and saw the difference Victorian Department of Planning and changed for the better. Saver Plus made to their lives. ANZ and BSL are now looking to grow Saver Plus to reach more people in more SAVER PLUS 2003/04 2004/05 2005/06 2006/07 locations. The challenge is to do this ANZ investment (including $810,310 $972,218 $844,159 $2,007,558 while maintaining the integrity of the resources/admin and matching program which has so far made such a funds for participants)* positive impact on families that were once struggling to make ends meet. Number of participants 248 303 311 1,385

Total amount deposited by $201,512 $353,512 $258,601 $1,129,799 participants

* ANZ provides $1 for every $1 saved, up to $1,000 per participant

INFORMATION ABOUT SAVER PLUS PARTICIPANTS % EDUCATION LEVELS Male Sole parent Part School Female Couple with children Completed School Grand-parent with children Tafe/other qualification Other University On the job training Other 12 1 10 10 4 6 22 31 58 20

88 23 25

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 61 FINANCIAL LITERACY AND INCLUSION PROGRAMS CONTINUED

MORE WAYS FOR PEOPLE TO GET More than 20,000 people have MONEYMINDED participated in MoneyMinded this year ANZ’s MoneyMinded is a fi nancial and more than 40,000 in total since the education program and resource program began in 2004. An additional designed to help people, especially 1,040 people were trained to deliver the Berry Street’s Ian Murray during a MoneyMinded workshop. those on low incomes, make better workshop this year, bringing the total and more informed choices about their number of people trained to 1,972. money. It contains no ANZ branding Berry Street Victoria’s Ian Murray uses There are also fi ve MoneyMinded or product information. MoneyMinded to teach basic fi nancial courses available to our staff skills to young people in residential It is delivered in workshops conducted and the general community at care who are not participating in throughout Australia by our partners www.moneyminded.com.au. mainstream education. Berry Street Victoria, The Smith Family, They include Planning and Saving, The Benevolent Society, the Brotherhood ‘We use the program to talk about setting Everyday Finances, Loans and Credit, of St Laurence, Mission Australia, SMART goals. One of our guys was saving Super Future and Investment Basics. All courses are free. Anglicare SA, Kildonan Child and Family up for an MP3 player. And exactly as per Services and The Salvation Army (NSW). the goal, he saved his money and very Regular content reviews of proudly went and bought his MP3 player. MoneyMinded are undertaken to ensure MoneyMinded is also an important it remains relevant and continues to be resource for fi nancial counsellors and ‘It was a big deal for him and it was a a useful resource for the community. hundreds of community organisations bit of an eye-opener to the rest of the who use it every day in their work. More group as well.’ ANZ has successfully completed a pilot than 1,000 facilitators have been trained The expertise of our partners and of MoneyMinded for mothers with young this year to deliver the program at a experiences such as Ian’s have children in New Zealand in partnership grass roots level around Australia. Its been captured in a booklet called with Plunket, a provider of support fl exibility allows it to be used in many ‘MoneyMinded: Sharing the Stories’, services for the development, health and situations with very different people. launched in July this year. wellbeing of children under the age of fi ve. More than 100 people have already completed the program and the partners are planning to extend the program across New Zealand next year. PARTICIPANTS FACILITATORS 2004/05 3,500 2004/05 400 2005/06 15,279 2005/06 564 2006/07 22,458 2006/07 1040

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 62 FINANCIAL LITERACY AND INCLUSION PROGRAMS CONTINUED

SAFE, AFFORDABLE SMALL LOANS GETTING ON WITH MONEYBUSINESS Susan Djamirri Djamkminy, a Progress Loans is a small loans program MoneyBusiness is a unique fi nancial MoneyBusiness worker in remote available to people who have had literacy and money management Galiwinku (Elcho Island, NT) has diffi culty accessing affordable, fair and program tailored specifi cally to seen many positive outcomes in safe credit from mainstream providers. help improve Indigenous people’s the community, It was developed by ANZ and the confi dence with money and develop ‘People are starting to save and budget Brotherhood of St Laurence (BSL) in a stronger savings culture. their money. They are happy to see how response to ANZ’s 2004 research into ANZ is working in partnership with they can save and watch their money fi nancial exclusion in Australia, and grow – which is encouraging for us.’ BSL’s previous experience in delivering the Australian Government Department similar small loans programs to of Families, Community Services In Geraldton, MoneyBusiness has low-income earners. and Indigenous Affairs (FaCSIA) to made a difference for a mother of deliver MoneyBusiness in six remote fi ve children, who was on a Centrelink The program aims to reach people, such communities – Geraldton and pension and $4,000 in debt. After as those identifi ed in our research, who Kununurra in Western Australia; and working with the MoneyBusiness team either go without essential items or are Katherine, Galiwinku, Tennant Creek for six months, the woman paid off her forced to use high cost and ‘unsafe’ and Nguiu in the Northern Territory. debts, and is now saving to buy her own alternatives such as payday lenders home. The woman says MoneyBusiness ANZ and the Brotherhood of and loan sharks, often leading to ‘has changed her life’ and now brings St Laurence are also piloting the unmanageable debt. other young mothers to the offi ce to matched savings program Saver Plus get them help managing their money. A pilot commenced in May 2006 in Katherine, Tennant Creek and providing small loans (between $500 and Geraldton. Like Saver Plus elsewhere Another signifi cant outcome of $3,000) to people on low incomes. The in Australia, this program provides MoneyBusiness has been the personal pilot’s success has resulted in Progress fi nancial education and rewards and professional development Loans being extended in Victoria. participants by matching their savings. opportunities available for Indigenous Since Progress Loans started, 209 people workers through participation in the This year new resources including have obtained credit to purchase Certifi cate III in Financial Services training. training materials, workshops, essential household items and services facilitator notes and games have been Over the term of the partnership, – 165 this year. The majority of these produced for use by the MoneyBusiness ANZ has committed over $1 million to people (71%) are women using the loans team. These tools help workers to build MoneyBusiness, with the Government to purchase whitegoods (27%) with an their own skills and more easily engage also committing $4.4 million over average loan size of $1,722. participants in the program and its four years. ANZ is seeing a solid performance from content. The materials are fl exible and ANZ and FaCSIA are now working the fi rst loans written, with credit quality durable enough to support discussions together to extend MoneyBusiness and arrears comparing well with the in many different locations around to other communities, ensuring the overall personal loan portfolio. the communities, including remote program continues to help Indigenous outstations, where English is often people in remote areas improve their not the fi rst language. fi nancial skills. PURPOSE OF LOANS Whitegoods Furniture Car Car registration/repairs Computer Other

14 ‘People are starting to save and budget their money. They are 4 27 happy to see how they can save and watch their money grow – 14 which is encouraging for us,’ says Susan Djamirri Djamkminy, MoneyBusiness worker in remote 19 22 Galiwinku.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 63 FINANCIAL LITERACY AND INCLUSION PROGRAMS CONTINUED

FINANCIAL LITERACY EXTENDS are now approaching me and asking Locally, ANZ staff have also participated TO REMOTE NORTHERN TERRITORY questions about fi nancial literacy. in program design and actively support The Traditional Credit Union (TCU) is There’s a defi nite need in these it in their branches. an Indigenous-owned credit union with communities and now we are able The pilot started in June 2007 and 11 branches in remote communities help them in a constructive way.’ David Murray was one of the fi rst throughout the Northern Territory. It aims Charles Darwin University will conduct people to complete the workshops. to give people better access to fi nancial an independent evaluation of the TCU He has already seen a difference in services in remote areas, and fi nancial fi nancial literacy program by July 2008, his confi dence with money. literacy education to assist them in and this will inform future fi nancial managing their money effectively. ‘My Moola has really opened my eyes literacy activities in communities where about how managing your money better ANZ has provided support to the TCU to TCU operates. can impact all areas of your life. I really pilot a fi nancial literacy program in the LINKING FINANCIAL LITERACY enjoyed the workshop on Goal Setting, communities of Milingimbi and Ngukurr. WITH PERSONAL DEVELOPMENT because I now have goals in my work Our investment over the past two years My Moola: Opening Financial Pathways and at home plus a savings goal. has been more than $200,000 and we is a pilot fi nancial literacy and personal ‘I feel proud of myself for completing have recently committed an additional development program being delivered this program and I can already see the $150,000 to enable TCU to continue the to Indigenous communities in the difference it is making to not just my life, program in 2008. Goulburn Valley region of Victoria. but my family too.’ As part of the program, a Financial Developed in partnership with First A new intake of 60 people will Literacy Co-ordinator is employed to Nations Foundation, it links personal participate in the next series of assist TCU members understand development and goal setting with workshops. different banking services, learn how fi nancial literacy and is specifi cally to develop budgets, understand the designed for regional centres with value of money and plan for their a large Indigenous population. family’s future. Local focus groups, including ‘Rapport building is a crucial component community organisations and local to the success of this project, as government, were held to inform relationships are very important in design and delivery of the program. Indigenous communities. If you have managed to gain people’s trust then ANZ’s contribution to the partnership they are more likely to want to hear what included skilled secondments and you have to say,’ says Dianne Bessell, funding for community consultation, TCU Financial Literacy Co-ordinator and design of the pilot and development a qualifi ed fi nancial counsellor. of all materials for the program. Relationships have been forged with Three ANZ staff members have worked various stakeholders in both Milingimbi on secondment in Shepparton for the and Ngukurr: ‘In time that I have spent past 12 months, helping develop the in the communities, I feel there has program that also incorporates some been an impact made as many people of the ANZ Breakout philosophies.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 64 OUR RESULTS RECONCILIATION ACTION PLAN

AN AUSTRALIAN FIRST understanding of local Indigenous Note: The Reconciliation Action Plan is Our Reconciliation Action Plan, the culture(s) within ANZ; and help build not included in ANZ’s overall community fi rst for any major Australian company, the capacity of Indigenous communities investment fi gure. Each program is sets out specifi c and measurable steps and organisations. reported individually. ANZ will take to increase employment Progress on each of the commitments opportunities; improve fi nancial literacy in the plan is detailed below. and inclusion; develop better

ANZ RECONCILIATION ACTION PLAN: SEPTEMBER 2007 PROGRESS REPORT COMMITMENT PROGRESS TARGET

EMPLOYMENT

Provide opportunities for Indigenous On track to employ 110 trainees in 2007, including 70 from our Regional and January school-based trainees with an intake of Rural business and 40 from Retail Banking. 2009 at least 100 trainees p.a. with at least 33% being offered full-time roles

Recruit Indigenous staff so at least 3% Forty Indigenous trainees are working in our regional branches, which represents December of Regional and Rural Banking staff are 3% of our Regional and Rural Banking workforce. 2011 from an Indigenous background

Work with Aboriginal Employment Strategy We have established service agreements for all states with the AES and we April 2008 (AES) to expand to all States and participate continue to participate in the CLIEP program to build avenues for talented in Corporate Leaders for Indigenous Indigenous employees. Employment Program (CLIEP)

Retain, develop and promote Indigenous Our Indigenous Employment and Training team includes a Career Development December employees to leadership positions, including Management role, to ensure trainees are appropriately skilled to secure roles at the 2014 20 Indigenous staff in management positions conclusion of their traineeship. On securing permanent roles, career development management will continue enabling suitable candidates to reach management positions based on merit.

IMPROVING FINANCIAL LITERACY AND INCLUSION

In partnership with the Australian Government, MoneyBusiness continues to run in six locations: Geraldton and Kunnunurra in July 2008 continue implementing the MoneyBusiness Western Australia; and Katherine, Galiwinku, Tennant Creek and Nguiu in Northern program in six pilot sites Territory providing money management skills to remote Indigenous communities. ANZ and the Australian Government are conducting a review of MoneyBusiness to evaluate the program and consider opportunities to extend it.

Research, design and implement Opening Thirty participants were involved in a 10-week long pilot program from June to September Financial Pathways my Moola program pilot in August 2007 and another 45 will participate in a second series of workshops from 2007 Shepparton in partnership with First Nations October to December 2007. The evaluation of the pilot program will be released Foundation and local community organisations in early 2008.

Offer the fi nancial literacy program, A range of community partners, including The Smith Family and Mission Australia, October MoneyMinded, to Indigenous peoples in together with fi nancial counsellors are using MoneyMinded for Indigenous 2007 relevant urban and regional centres clients. We are also reviewing opportunities to extend the use of fi nancial literacy education materials specifi cally tailored for Indigenous communities.

Implement a fi nancial literacy project in A review of outcomes from the fi nancial literacy project with the Traditional Credit July 2008 partnership with Traditional Credit Union in Union is now underway by Charles Darwin University and due for completion in Northern Territory and review for effectiveness mid-2008.

Integrate the Saver Plus program with the A Saver Plus pilot is now operational in Katherine, Tennant Creek and Geraldton. October MoneyBusiness and Opening Financial Pathways Participants of the Opening Financial Pathways program who are eligible for 2008 my Moola programs in relevant locations participation in Saver Plus are being referred between the programs.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 65 RECONCILIATION ACTION PLAN CONTINUED

COMMITMENT PROGRESS TARGET

CULTURAL RECOGNITION AND AWARENESS

Offer ANZ staff cultural awareness training and A new program, Breakout Inclusion, has been developed and offered to promote November counselling to improve our understanding diversity, inclusion and cultural understanding. 2007 A variety of locally relevant Indigenous cultural awareness programs are under consideration.

Establish a mutual mentoring program for ANZ The program is now under development, with participants expected to be paired December leaders – pairing of fi ve ANZ leaders with fi ve in early 2008. A mentoring resource kit will be provided for participants. 2007 Indigenous leaders for mutual mentoring

Develop local action plans developed by fi ve Local action plans with specifi c and measurable ‘actions’ are being implemented August regions to help ANZ frontline staff to ‘know your in NSW North Coast, North West SA, North Qld, North WA, NT and other regions. 2007 customer

Support local Indigenous events, particularly Support of the Darebin Economic and Job Market Summit (Vic) and Indigenous November focused on Indigenous economic development job markets in NSW, Qld and SA. 2007 and and job markets ongoing

Create and develop ANZ Indigenous Network The network is being established to include Indigenous staff and others from December Group raise Indigenous cultural awareness across ANZ with experience in working with Indigenous people. 2007 within ANZ

Promote and support The Long Walk campaign ANZ supported The Long Walk event ‘Dreamtime @the G’ in Melbourne on 25 May December to improve awareness of Indigenous affairs and and was principle supporter of The Long Walk Women’s Lunch. Over 200 staff have 2007 culture. been involved in these events.

Support national campaigns, where ANZ is involved in The Long Walk, the Australian Government’s Reconciliation Ongoing appropriate, to promote reconciliation and Action Plan program and the Darebin Indigenous Job Summit. cultural celebration

Promote our programs to staff through Regular updates on our Reconciliation Action Plan are provided to staff via our Every June information sessions to raise awareness of our intranet and employee newspaper. All employees in Australia were given the approach to reconciliation. opportunity to participate in our Indigenous Home Ownership workshops.

CAPACITY BUILDING

Establish Reconciliation Action Plan Governance A Governance Group has been established and is chaired by Rob Goudsward, June 2007 Group to guide, implement and manage our Managing Director of ANZ Regional, Rural and Small Business. The fi rst meeting programs. Members from ANZ businesses, was held on 10 September 2007. secondees, Indigenous partner organisations, Reconciliation Australia, ANZ leadership, ANZ Indigenous staff

Consult on factors associated with Indigenous Discussion paper released in July 2007 and more than 150 staff and 100 community May 2007 home ownership including barriers, stakeholders have participated in our consultation workshops in seven locations opportunities and solutions across Australia. The report on the consultation will be available in early 2008.

Help ANZ staff participate in volunteering and Five ANZ staff participated in secondment opportunities with Indigenous September secondment opportunities with Indigenous organisations including Reconciliation Australia, The Long Walk and First Nations 2007 organisations to the value of 50 staff months Foundation. This combined with volunteering opportunities for other staff totalled (annual four FTE) approximately 80 months.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 66 OUR RESULTS LOCAL COMMUNITY PROGRAMS

MAKING MORE OF ANZ VOLUNTEERS ‘At last residents have a place where ANZ Volunteers offers staff at least they can enjoy the sunshine and do a one day’s paid volunteer leave each little bit of light gardening, it has been year to support causes that are very special for all of them to have this important to them. beautiful space in which to relax. Many of them now take their visitors up to Launched in Australia and New Zealand the balcony and they love to show off ANZ Volunteers help raise money for in 2001, the program commenced in Startlight Foundation Star Day. the superb views of the city. This would India in July this year. never have happened in the past, In 2007, more than 8,800 staff in when the balconies were bleak and Australia and New Zealand contributed unwelcoming concrete boxes!’ 73,098 volunteer hours – an increase Nicola added ‘We are always thrilled An emerging challenge for volunteering, of 44% from the previous year. with the commitment of the ANZ particularly in Australia, is a potential The ANZ Volunteers program is fl exible volunteers. They showed real ownership over-supply of corporate volunteers and grows at a grass-roots level. This of the project and it simply wouldn’t for community organisations. With helps ensure that each volunteer makes have happened without their fundraising corporate volunteering numbers a meaningful impact on the organisation and time. The most exciting thing from increasing annually, it is important they are helping. our point of view, was that every single to ensure the administrative impact one of the volunteers showed such on the community host is limited, Shelley Bullock from Consumer Finance enthusiasm for the project and and the outcomes of our contributions and her 12-member team volunteered demonstrated real are worthwhile. We are working with to help the Brotherhood of St Laurence care toward the residents.’ community organisations to ensure (BSL) build a balcony at a retirement ANZ’s contribution continues to be home and give it a much needed Our people in India have also embraced meaningful for both the community make-over. The ANZ volunteers raised the ANZ Volunteers program, with and ANZ employees. $3,000 needed for the materials, and 389 people volunteering more than spent two days renovating the balcony 3,000 hours in the program’s fi rst four In 2008, we will further develop our for residents. months following its offi cial launch. skills-based volunteering program. ANZ volunteers will have the ‘It was really rewarding, especially when ‘It is very encouraging to see the support opportunity to spend longer periods of we saw how excited the residents were ANZ offers volunteers in India time with organisations, contributing – we knew all our hard work had paid off’, so that they can make an impact to particular skills on a project or initiative said Shelley. ‘It was a fun day for the community. Personally, it is a very that could not be completed in a all involved!’ rewarding experience to be able to one-day assignment. touch so many lives and make a Nicola Ballenden, BSL’s General difference to them,’ said Vinaya Sridhar, Manager for Communication and Project Manager, ANZ Bangalore. Development, said the residents of the home have been enjoying their new surrounds. HOURS OF VOLUNTEERING BY VALUE OF VOLUNTEERING ANZ EMPLOYEES (AUST & NZ) (AUST & NZ) 2003/04 7,337 2003/04 $220,110 2004/05 24,934 2004/05 $748,020 2005/06 50,735 2005/06 $1,522,050 2006/07 73,098 2006/07 $2,192,940

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 67 LOCAL COMMUNITY PROGRAMS CONTINUED

MORE WAYS TO GIVE We also support teams that prefer to more than 100 grants to community Our Community Giving program offers contribute to smaller or local charities organisations this year. They are both staff, customers and shareholders the that are not on the payroll giving list. managed by ANZ staff representatives opportunity to donate to charities of ANZ matches all staff donations to in each country and donations are their choice. charity during a team fundraising event matched by ANZ. (up to $1,000 per collection). This year All Australian staff can donate directly Next year Community Giving will also staff donated $504,900 to more than from their pay to a number of selected be launched for our staff in India. 100 charities through this initiative. charity partners, with ANZ matching Our shareholders also have an option Corporate and Community Manager at donations dollar for dollar up to $1,000 to donate to charity through the Kids Help Line, Marie Bryan, loves the per person and $1 million per year. Dividend Donation Scheme. This concept of Community Giving as it’s In response to a nation-wide staff year, ANZ facilitated $165,839 in a cost-effective way for them to raise survey, six new charity partners were donations from our shareholders much needed funds. added to our community giving list to a range of charities, which were this year. Our list is reviewed each ‘Corporate payroll giving is the best matched by ANZ. Our customers also year and is determined in response possible way for us to raise money. donated $101,732 to charity through to the staff survey. There is no cost to the charity and, ANZ’s online banking facility. because ANZ match donations, we In 2007, 15% of staff donated In total, $2,592,978 was donated to receive double the impact.’ $1,654,668 to our 25 partners in charity through ANZ’s Community Giving Australia – including ANZ’s matched ‘We received more than $13,000 program from our staff, customers and funding. from ANZ staff this year, which helps shareholders during 2007. Kids Help Line answer more cries for In October 2006, ANZ became the fi rst help from children and young people company in Australia to launch child across Australia.’ sponsorship as an option for staff through payroll giving. More than In addition, the ANZ Staff Foundation 450 staff now sponsor children through in New Zealand and Australia also World Vision, with ANZ matching enable staff to donate directly from their donations. their pay. The Foundations awarded

TOTAL CONTRIBUTIONS THROUGH BREAKDOWN OF COMMUNITY GIVING (AUST & NZ) COMMUNITY GIVING 2004/05 $1,110,000* Staff Customer 2005/06 $833,019 Shareholder 2006/07 $2,592,978 Matching from ANZ

* Includes one-off Tsunami donations in 2005

35 52

8 5

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 68 LOCAL COMMUNITY PROGRAMS CONTINUED

INVESTING IN LOCAL COMMUNITIES communities around us which will have The ANZ Community Fund is used by a lasting benefi t. We use the Community our branches to support their local Fund so there is no cost to the school’, communities. They are encouraged to said Gary use the Fund to give something back ‘By including both basketball clinics and to the areas in which they operate. a fi nancial literacy game, learning about Our branches can also offer in-kind the importance of good fi nancial habits support such as volunteering, access and physical fi tness have never been to business networks, in-branch so much fun for the kids. promotions or expertise, in addition ‘Our team is very excited by the potential Children from Boronia celebrate the to fi nancial assistance. Kids First program supported by the of this project and the impact we have ANZ Commuity Fund. In 2007, more than 100 organisations made already made in our local area. So have been supported by our branches far, there have been 11,000 children using the Community Fund, including participate in the physical or fi nancial For example, 30 ANZ staff travelled to cash contributions of $440,716. elements of the Kids First.’ Vietnam in November 2006 and raised The Community Fund is a great vehicle STEPPING UP TO THE CHALLENGE $100,000 for the International Women’s for branches to make an impact and The Corporate Charity Challenge is an Development Agency (IWDA) charity to support causes that are important to event that combines fundraising with build a school. their community. Whether it’s a small a fi tness challenge and encourages ‘Without the funding generated by the sponsorship or a large donation, the team building for staff. Sixty ANZ staff ANZ Charity Challenge, this project Community Fund’s fl exibility is what participated in Challenges this year would have come to an end in 2006. makes it so effective. which took them to Vietnam and remote The substantial support enabled the north Western Australia. The ANZ Boronia local market in Victoria ‘Rural Development for a Future without used the Community Fund to develop ANZ supports the Corporate Charity Poverty’ project to provide women in a local program called Kids First. It was Challenge teams by providing project the Tuyen Quang district of Vietnam designed by ANZ staff to help the management support, two and a half additional micro-credit, training in children in local schools learn about days of volunteer leave for the Challenge small business establishment, and good fi nancial habits and physical trip, and by matching fundraising up to support,’ said Jane Sloane, Executive fi tness. Local CEO, Gary Conner, has $1,000 per team member. Director of IWDA. been thrilled at the outcomes the team Participants each raised more than ‘Incomes increased substantially as a has achieved in the community. $4,000 for the selected charity before result, for example going from 50 cents ‘Kids First is a program that incorporates travelling to the communities they are to $13 per day (Australian), improving basketball clinics and fi nancial literacy helping. It tests their fi tness and is a the quality of life and the health of clinics for children, parents and staff. unique opportunity for our staff to women and their families, and enabling It is proving to be a unique, special and experience something new and create their children to attend school – and powerful way for us to add value to the real benefi t for the community. possibly even university!’

TOTAL COMMUNITY FUND SPEND (AUST) 2003/04 $395,255 2004/05 $350,000 2005/06 $396,810 2006/07 $440,716

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 69 LOCAL COMMUNITY PROGRAMS CONTINUED

A second group of 30 staff raised more GRANTS FOR DROUGHT- is much needed in these diffi cult times. than $116,000 for the Ian Thorpe AFFECTED AREAS Suze MacGregor from the Gayndah Fountain for Youth who are supporting Seeds of Renewal is a grants program for Kindergarten said the grant had come the Bidyadanga Community Library rural communities run by the Foundation at a great time for the children. project in Western Australia (south of of Rural and Regional Renewal (FRRR) ‘We wanted to purchase a water tank and Broome). This project enables young and supported by the Regional and Rural pump to water the natural tree, garden Indigenous children in the community business. Community groups from towns and lawn area at the kindergarten. The access to a library so they can learn to with populations of less than 15,000 drought has really taken its toll on the read and write. people can apply for grants kid’s outdoor play area. We needed of up to $10,000. Peter Dalton, Chief Information Offi cer some help. of ANZ returned from the Challenge This year, Seeds of Renewal has ‘We have also used this project as inspired. supported projects which help small an opportunity for a teaching exercise rural communities affected by drought. ‘The Corporate Community Challenge in water conservation and recycling The grants focus on helping them to was one of the most powerful and strategies, which we hope will have foster enterprise and renewal following rewarding things I have done recently. a long-term impact on our children’. the severe drought conditions. Raising money to open a library for a In 2008, the focus of Seeds’ project remote Indigenous community was ANZ has been supporting this program grants will continue to be on drought- diffi cult at times but after spending a for fi ve years, contributing more than affected areas. couple of days with the community, it $1.4 million over this time – $451,800 became very clear to us the important this year alone. More than 280 projects difference this will make to the lives of have received Seeds of Renewal grants many children. including, 83 projects in drought- affected areas across Australia this year. ‘The physical part of the Challenge was SEEDS OF RENEWAL INVESTMENT (AUST) also terrifi c. We live in such a beautiful, ANZ’s continued support for the program 2003/04 $277,000 and at times harsh, country that we helps drought-affected areas like 2004/05 $358,000 should all take the time to get out and Gayndah in Queensland. The local see more of it. A very rewarding and Kindergarten Association received a grant 2005/06 $314,496 worthwhile experience.’ of $4,140 to purchase a water tank which 2006/07 $451,800

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 70 LOCAL COMMUNITY PROGRAMS CONTINUED

ANZ PAINTS THE TOWN ANZ provides funding ($300,000) and BLUE FOR CHARITY in-kind support, including fee-free A commercial initiative can also have business banking services and a signifi cant impact on the community. merchant services, volunteers and Even if a company receives a brand use of the ANZ call centre ($1 million). benefi t from its activities, there is also In 2006, ANZ also provided a charitable More than 80 ANZ staff have volunteered for Habitat for Humanity. a contribution to the community that donation of $100,000. may result in positive outcomes. Overall, the TV appeal raised $700,000 According to the LBG model, 6% of for Comic Relief. ANZ’s total community contribution is SUPPORTING COMMUNITIES in this category. Blue Week and Comic IN TIMES OF NEED HABITAT FOR HUMANITY Relief are examples of ANZ’s commercial ANZ supports the communities in The ANZ Mortgages business is a community initiatives. which we operate – especially in times major sponsor of Habitat for Humanity Blue Week of particular crisis or need. This year, Australia. Together, we help construct ANZ Blue Week is a national initiative we continued to provide assistance simple, decent and affordable housing to support our local community, while to communities affected by natural for families with low incomes. raising ANZ’s profi le and showing that disasters like drought, bushfi res, storms, ANZ Mortgages invests $290,000 we really are a very different bank. Each cyclones and the equine fl u. to Habitat for Humanity plus $241,900 branch around Australia selects a local This year ANZ has given $15,000 in worth of in-kind management services charity to support and spends the week cash grants as part of various disaster and more than 80 ANZ staff volunteer fundraising, while also introducing new relief packages to customers in affected to build houses across Australia. customers to ANZ. communities. With ANZ’s support, Habitat has Started by Regional and Rural Banking ANZ has also provided support to constructed four homes in 2007 and last year, Blue Week expanded to all our customers in these communities plans to build another for next year. ANZ branches in 2007. During the week, including, waiving fees and suspended In addition, ANZ also supports families our staff and customers raised over loan repayments. in developing their money management $500,000 for charities across Australia. skills and confi dence through During an unexpected event or natural Local CEO for the Sunshine Coast, partication in MoneyMinded. disaster, more than ever, communities Vicki Clark said: ‘ANZ is committed to are in need of understanding and supporting our local communities, and support from the businesses that Blue Week provides us with another operate there. Managing Director opportunity to do this. Not only do our of Regional and Rural Banking, Rob staff enjoy it, the community benefi ts.’ Goudswaard, says that supporting In 2008, ANZ Blue Week will take place communities in good times and bad from 18 to 22 February. is a priority for ANZ. Comic Relief ‘As a bank and as a team of people, ANZ is the principal sponsor for Comic we are committed to supporting the Relief, an annual TV appeal which communities in which we live and work supports Volunteering Australia and in their time of need. We are very aware Oxfam Australia in raising funds and of the devastating impact natural allocating these to various charitable disasters have on many small initiatives in Australia and Asia Pacifi c. communities and our focus is on helping these communities survive and rebuild for the future as quickly as possible.’ Read more about our disaster relief packages on page 43.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 71 LOCAL COMMUNITY PROGRAMS CONTINUED

ANZ NOW REACHING MORE In addition to offering staff paid COMMUNITIES volunteer leave and driving charitable Strategic community investment fundraising, ANZ has developed a programs are now being established relationship with the charitable in India and the Pacifi c. Programs in organisation, Parikrma Humanity New Zealand are also being extended Foundation. following the success of the last Parikrma is a non-profi t organisation two years. that aims to empower children from New Zealand urban slums to break the cycle of ANZ is supporting the Parikrma Humanity Following ANZ’s acquisition of The poverty through education. This year, Foundation in Bangalore, India. National Bank in 2003, the focus for ANZ provided funding for Parikrma the amalgamated ANZ National Bank to conduct an impact study on the was to take a ‘best of both’ approach Parikrma Model of Teaching. in establishing a number of core The focus for the study was the unique ‘Community investment in countries like community programs. education model leveraged by The Fiji is vital for large companies like ANZ Starting with a formal volunteering Parikrma Humanity Foundation. The – it gives us a licence to operate here’, program, New Zealand’s community Parikrma model enables children from said Vosawale Tamani from ANZ Fiji. under-served communities to access investment program has gone from ‘The support ANZ gives organisations strength to strength. The most recent quality teaching, advance their studies like the Dilkusha Children’s Orphanage initiative has seen ANZ partner with and compete with peers from more makes it possible for us to help people Plunket to deliver our fi nancial literacy privileged backgrounds. less fortunate than ourselves. The program, MoneyMinded to young In addition to this support, ANZ has impact is huge.’ families. recently provided two staff members to In addition to fi nancial support for local More than 2,200 staff in New Zealand work at Parikrma on secondment for organisations, ANZ also runs Banking volunteered 16,643 hours to the three months. The secondees will help the Unbanked – an initiative which community this year, an increase of in building the capacity of the Parikrma offers mobile banking services to those 66% since 2006. More than 1,100 schools and will provide a skill exchange in remote areas. These people wouldn’t staff, 11.6% of our New Zealand between our two organisations. normally be near a bank and can now people, now contribute to the After taking these fi rst steps in a have better access to mainstream New Zealand Staff Foundation. partnering relationship with the services. Since October 2004, we have The extension of MoneyMinded into Parikrma Humanity Foundation, our delivered basic banking products to New Zealand complements the aim is to extend and deepen this more than 300,000 people in remote community investments already in place, relationship next year. Pacifi c villages through this program. including ANZ’s new sponsorship of Pacifi c Asia Plunket’s annual appeal and The Our commitment to invest in the This year our operations in Asia National Bank’s sponsorship of Daffodil communities in which we operate contributed $70,666 to the Group’s Day where staff raised more than is vitally important in developing community investment spend. Their $1 million for the Cancer Society. countries in the Pacifi c. This year, contribution included staff volunteering activities, charitable donations and In total, ANZ New Zealand invested over ANZ has invested more than $921,000 community-based commercial $1.3 million in the local community. in countries including, Fiji, Samoa, initiatives. For example our staff in Papua New Guinea and East Timor. India Taiwan participated in a reading This year ANZ Operations, Technology A combination of donations, program with the children of newly and Shared Services in India began volunteering activities, local arrived immigrants and we sponsored work on a local community engagement sponsorships and relief to Tsunami- the Australia Friendship Library in China strategy and contributed $83,177 to the affected areas comprises ANZ’s which aims to help bridge the culture Group’s overall community investment. investment in this area. gap between Australia and China.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 COMMUNITY 72 Representatives from ANZ and Toyota take the new petrol-electric hybrid vehicles for a test drive.

section 4 environment and supply chain

OUR COMMITMENT TO REDUCING OUR ENVIRONMENTAL FOOTPRINT IS FOR THE LONG TERM – WITH NEW TARGETS TO IMPROVE OUR RESOURCE EFFICIENCY AND PLANS TO GO CARBON NEUTRAL THROUGH INVESTMENT IN RENEWABLE ENERGY.

WHERE WE’VE BEEN 1999–2006 KEY ACHIEVEMENTS 2007 FUTURE PRIORITIES ■ Began measuring energy, water and ■ Announced plans to become ■ Release an updated Environment paper consumption in 2004 carbon neutral by 2009 Charter ■ Introduced Environment Management ■ Met or exceeded two-year energy, paper ■ Meet new environmental footprint System in 2005 and carbon emissions targets targets ■ First participated in Carbon Disclosure ■ Began construction of our new ■ Expand supply chain assessment Project in 2004 environmentally friendly offi ce building framework for top suppliers by 50% ■ Set two-year environmental footprint ■ Member of Climate Disclosure Leaders ■ Expand reporting on our supply chain targets in 2005 Index for second consecutive year to include human rights and OH&S ■ Developed Sustainable Procurement performance measures Policy in 2005

ANZ CORPORATE RESPONSIBILITY REPORT 2007 73 OUR APPROACH MANAGING OUR ENVIRONMENTAL IMPACT AND SUPPLY CHAIN

Our Environment Charter sets out our approach to assessing and managing the environmental issues in our business from the environmental impact of our operations and products and services to the indirect impact we have through the activities of our clients and suppliers.

This year we reviewed our Environment Charter to ensure it remains relevant to the current environmental challenges facing society and our business. Feedback internally and externally was that the Charter could be more distinctive to ‘BEST IN CLASS’ & ANZ’s approach and specifi c about what we see as the most important environmental MEMBER OF THE issues facing our business. CLIMATE DISCLOSURE Our impact on the environment is largely indirect, and our public commitments should LEADERSHIP INDEX focus on ensuring we make responsible business decisions and assist clients and

THE CARBON DISCLOSURE PROJECT 2007. suppliers to improve their response to environmental issues. We are also taking an innovative approach to becoming carbon neutral by investing in renewable energy sources. The commitments in our Charter should refl ect these priorities. We were encouraged to include our environmental footprint targets in the Charter, to make the commitments more meaningful and measurable. Stakeholders also saw the value in making a senior ANZ executive publicly accountable for the delivery of results, to show we are genuine and maintain momentum internally. Finally, we were reminded of the importance of our people in achieving our environmental objectives. Committed staff can help us reduce our environmental impact and are our most valuable public advocates. It is therefore vital for them to understand the issues that apply to ANZ, and how we are responding to them. This year we developed an online training course for staff outlining our public targets to reduce our footprint and how they can help and collaborated with WWF Australia to launch an intranet site containing news and views on environmental issues facing ANZ. So far over 1,000 ANZ employees have signed up to receive a regular e-bulletin containing news and views about environmental issues. We will release a revised Environment Charter in early 2008, incorporating this and other feedback we have received during the review.

ENVIRONMENTAL RESULTS FOR 2007

ASPECT AUSTRALIA NZ CHANGE CHANGE 22007007 06–07 22007007 06-07 Electricity (MWh per FTE) 6.89 -1.5% 5.59 -1.9%

Paper consumption (tonnes) per FTE 0.20 19.3% 0.17 -2.9%

Water consumed (kL) per FTE 14.43 -6.9% Not measured Not measured

Greenhouse gas emissions (tonnes co2-e) per FTE* 8.58 -8.5% 1.39 0%

* Text has been restated on 6 February 2008 owing to incorrect reporting. A previous incorrect reference to ‘Waste recycled (tonnes) per FTE’ was removed and replaced with ‘Greenhouse gas emissions (tonnes co2-e) per FTE’

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 74 LEADING AND RESPONDING TO CLIMATE CHANGE CHALLENGES AND OPPORTUNITIES

Our impact on the environment This is where we make our most important We can also assist clients to offset those is largely indirect, through the contribution. Through the right fi nancial emissions they cannot avoid. ANZ is activities of our clients. It follows products and advice, we can help our an active participant in carbon markets that our primary response to clients make the most of opportunities – both in Australia and internationally. climate change should be to to reduce their carbon footprint. This An emerging issue in Australia, where a assist those clients reduce their can include facilitating investment in ‘cap and trade’ emission trading scheme carbon footprint. carbon-reducing technologies and will be phased in over the next fi ve years, energy-effi ciency measures and helping is the credibility of offset schemes. Climate change is a real risk that we clients meet voluntary or mandated We have developed a set of criteria to now factor into our business decisions. limits on carbon emissions. make it easier for our clients to choose Many of our clients have exposure to This grows our business but also credible and effective schemes that best the effects of climate change, whether manages a risk for us. Companies suit their circumstances. For instance, they be involved in agriculture and not responsive to climate change are our criteria recommend that any project vulnerable to the risk of water shortages, unlikely to be profi table in the long term generating a carbon offset must be or industries that will be heavily and our business reputation can suffer ‘additional’ or beyond ‘business as usual’ impacted by carbon regulation like if we support clients who do not manage activity to be credible. electricity, mining, chemicals, transport their environmental impact responsibly. and plastics manufacturing. BACKING RENEWABLE ENERGY SUPPORTING CLIENTS Assisting clients to reduce their carbon As constraints on carbon become a The fi rst way we assist clients is through footprint is the focus of our response to reality, the importance of investment in fi nancing measures to reduce their climate change, but in addition, we are energy effi ciency and renewable energy carbon footprint. For example, this year supporting the continued development alternatives grows. Businesses that fail we have worked with an engineering of renewable energy, both through to adapt will incur higher energy costs fi rm to develop an innovative direct investment and through our plans and lose opportunities to profi t from energy-effi ciency fi nancing product. to become carbon neutral. cuts in energy use. And from a broader perspective, it is particularly important The product is designed to incorporate ANZ Infrastructure Services (ANZIS), for high-impact sectors such as the advice to clients on potential a specialist adviser and investment power generation and transport improvements they can make to their manager, has established two special- industries to take responsibility for energy effi ciency, design of measures purpose investment trusts to encourage managing their emissions. to achieve that effi ciency and fi nance investment in environmentally to fund the implementation of those sustainable energy sources and measures. Clients of the product infrastructure. In 2007 our project would at the outset be guaranteed fi nance team arranged fi nancing for an agreed level of energy savings and the production of biofuels (ethanol a linked reduction in their greenhouse and biodiesel), waste gas projects gas emissions. and landfi ll gas production.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 75 LEADING AND RESPONDING TO CLIMATE CHANGE CHALLENGES AND OPPORTUNITIES CONTINUED

David Cartwright, Group Managing Director, Operations Technology and Shared Services, pictured next to one of 96 solar panels installed on the roof of the ANZ data centre, near Melbourne Airport.

GOING CARBON NEUTRAL We also plan to invest in the projects CONTINUING OUR FOCUS Our carbon footprint is relatively small that generate the renewable power we ON EFFICIENCY but as one of the largest companies in use. We have commenced a tender Going carbon neutral is only part of Australia and New Zealand, we have an process to identify preferred suppliers the work we need to do to reduce our opportunity to show leadership, not only and projects we could fi nance to help footprint. The best way to bring our by setting public targets to reduce our us achieve this aim. Further carbon emissions down is still to use less environmental footprint, but also in the credits will be acquired to offset energy. Over the last two years we way we go about achieving those targets. emissions generated by our travel have reduced the electricity used per and motor vehicles. full-time employee by 5% and have In May 2007 we announced our set new targets for energy effi ciency intention to become carbon neutral in This approach to carbon neutrality for the next three years. Australia and New Zealand by 2009. involves substantial up-front investment, but is ultimately more sustainable, both Credibility of carbon offset strategies is environmentally and fi nancially. By as much an issue for us as our clients investing in renewable sources, we can and it is vital our approach meets the reduce our carbon footprint while at the standards we recommend to our clients. same time support the fi nancing needs As part of our approach, we will seek to of the growing renewable energy sector. acquire our electricity, which accounts for the majority of our carbon footprint, from renewable energy sources.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 76 INFLUENCING OUR SUPPLY CHAIN

With a supplier network of over Ninety-three per cent of these suppliers through the development of social 9,000, we have an opportunity have now agreed on a social and and environmental performance to influence the social and environmental performance improvement improvement plans. environmental practices of a range plan and we will continue to work with As well as infl uencing the way JLL of businesses. We are talking to them to further develop and implement interacts with its suppliers, we are also these plans. more suppliers about these issues learning from JLL’s expertise in building and one of our largest suppliers EXPANDING OUR INFLUENCE sustainability and engineering to reduce has now adopted our approach As a measure of our potential infl uence our direct environmental impact. to manage its own supply chain. on other businesses, one of ANZ’s This year we have worked with JLL’s most important suppliers, property Any effort to manage our direct National Sustainability Director on and facilities manager, Jones Lang environmental footprint must necessarily ways to better measure energy use LaSalle (JLL), is now using ANZ’s supply address the impact we make through in our buildings and identify energy chain management approach on its our choice of goods and services. effi ciency opportunities that will make own suppliers. Since 2005, we have included social a real difference to our footprint. The and environmental considerations into JLL manages 38 commercial sites, Environmental Performance Working our choice of suppliers. 800 ANZ branch sites and more than Group comprises representatives from 2,000 ANZ ATMs. JLL’s role ranges from both ANZ and JLL and meets monthly We ask suppliers to provide us with identifying suitable new ANZ sites to to review the recent environmental information about how they manage the day-to-day management of security, performance of ANZ buildings and the social and environmental issues cleaning, fi xtures and fi ttings, general agree on the most appropriate measures associated with their business as a maintenance, air conditioning and to improve that performance. standard part of our tender process electrical services. The activities of and conduct regular contract reviews. JLL and its suppliers therefore heavily FUTURE CHALLENGES This includes how they identify and infl uence ANZ’s overall environmental We have the framework in place to manage risks to their business, whether footprint. assess the social and environmental they have systems to minimise their performance of our suppliers. Now environmental impact, details of their JLL has asked 32 of its own suppliers we are working on gathering better employment and health and safety involved in providing products and information and using the information practices and whether they engage services to ANZ to complete ANZ’s we gather more effectively. with their stakeholders. self-assessment questionnaire and now tracks and reports monthly to Our focus so far has been on This year the number of suppliers ANZ on the social and environmental environmental issues, but this year we who completed this assessment grew performance of these suppliers in expanded our supplier questionnaire to from 100 in 2006 to 170. addition to its own progress. The include more specifi c questions about We also applied a more detailed commitment of JLL suppliers to this employment practices and human rights. assessment process to 30 suppliers process has grown over the year, with In the coming year we will begin gathering who make up a high proportion of our 88% now responding to JLL’s request more information about how our suppliers total annual spend and whose products to complete the ANZ questionnaire, manage these wider business issues. up from 65% in March. and services have a potentially high We also plan to develop sector-specifi c environmental impact. Based on these assessments, we social and environmental standards to This year we met with each of these identifi ed those key JLL suppliers provide suppliers with guidance which suppliers to review their social and that we should work with more closely is more relevant to their type of business. environmental assessments so we could help them understand some of the issues raised and what remedial action might be required. In many cases we invited a subject matter expert with knowledge of ‘What ANZ expects of its suppliers, we’re now expecting of ours.’ the supplier’s area of business to these Dino Fornito, National Procurement Manager, JLL ANZ Account meetings to further inform the discussion.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 77 CREATING MORE ENVIRONMENTALLY FRIENDLY WORKPLACES

ANZ is building one of the commercial building. In many cases we most environmentally friendly are only one tenant in a building, and our commercial office buildings in capacity to infl uence the infrastructure Australia. We are also improving changes to make these buildings more the environmental performance receptive to environmentally friendly of the buildings we currently measures can be limited. occupy and some special Employees from ANZ and Lend Lease This means our approach to ‘retrofi tting’ discuss plans for ANZ’s environmentally challenges in the Pacific are environmental technology must be friendly commercial offi ce building at also driving innovation. fl exible according to what is a Docklands, Melbourne. reasonable investment in each building. ANZ’s new building in Melbourne’s NECESSITY BREEDS INNOVATION Dockland’s precinct, due for completion ‘Sustainability considerations are now IN THE PACIFIC in late 2009, is designed to achieve part of our business-as-usual approach,’ world-wide best practice environmental says Keith Woodward, Head of ANZ The short supply of mains electricity has standards for an offi ce building. Property Operations. accelerated our investment in renewable energy in many of our Pacifi c operations. ‘Specifi c initiatives occur wherever Innovations such as the use of solar This year we launched solar-powered they are technically appropriate and power and wind turbines to supplement banking services in the Solomon Islands provide value.’ energy supply and the reuse of and Cook Islands. stormwater and grey and black water are This year we completed an eco-effi cient Our fi rst solar ATM was unveiled in the designed to deliver real results through fi t-out of fi ve fl oors of 55 Collins Street Solomons village of Tetere in April 2007. reductions in greenhouse gas emissions, Melbourne, a 20-year old offi ce building The village has no mains electricity, water savings and energy effi ciency. in Melbourne’s CBD. The fi t-out is so solar power is a cost-effective way We are seeking to achieve the highest intended to showcase a variety of of delivering banking services. Four current Green Star rating from the innovations which can be incorporated more solar ATMs will be rolled out in Green Building Council of Australia. in other ANZ buildings. the Solomons by the end of 2007 to The building will be a powerful symbol Water-saving measures, including connect remote communities with of our commitment to improve our low-fl ush toilets, fl ow restrictors, AAA mainstream banking. environmental performance. However showerheads and water sensors on ANZ is now taking renewable energy to there is also a real business case for basin taps, are expected to save an other parts of the Pacifi c. Our fi rst solar this investment. Investment in energy estimated 750,000 litres of water a year. effi ciency measures today, such as branch opened in September at Aitutaki The installation of waterless urinals has those refl ected in the design of our new in the Cook Islands. highlighted the challenges of adapting building, can pay off in the long term, older infrastructure to new technology. The branch generates 100% of its power not only through lower energy costs Waste generated by these units is from 48 solar panels. These run the ATM, but also in the form of carbon credits. undiluted and therefore has a higher lighting, alarm system and computer. IMPROVING EXISTING BUILDINGS acidity. The existing copper piping at In order to minimise the branch’s power While the building is an important step 55 Collins Street would corrode with demand, the teller uses a laptop and the forward for ANZ, it will address only this increased acidity and so needed computer server is based in Rarotonga. part of our footprint. ANZ occupies over to be replaced with PVC as part of A second solar branch on Christmas 33 large offi ce buildings around the the installation. Island in Kiribati is scheduled to open world, including 12 in Melbourne alone, Energy effi ciency has been another by the end of 2007 and is also designed and we also need to address the focus of the 55 Collins Street project. to be 100% carbon neutral. environmental performance of these New-generation fl uorescent lamps, buildings to make real progress on which consume 25% less power than reducing our footprint and adapting industry standard T8 lamps, have been to a carbon-constrained future. installed, and lighting sensors ensure However, this can pose challenges. The they automatically switch off when the latest environmental technology cannot fl oors are unoccupied or dim when there always be incorporated into an older is suffi cient natural light on the fl oor.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 78 OUR RESULTS MANAGING OUR DIRECT IMPACT IN AUSTRALIA

Our plans to become carbon neutral To reduce carbon emissions ANZ will This year we reduced our consumption make up only part of our commitment focus on: of electricity per FTE by 1.5% through to reduce our environmental footprint. ■ reducing energy (electricity, gas and a series of energy-saving initiatives, Two years ago we committed to a diesel) consumption per FTE by 5% including: series of targets to reduce the impact over the two years from 2007 to 2009 ■ the removal of screensavers from PCs of our Australian operations by ■ continuing our focus on understanding and laptops, replacing them with ‘sleep 30 September 2007. and reducing energy consumption mode’ when the computer is not in use; Our goal was to cut the consumption through improved monitoring and ■ the decommissioning and consolidation of electricity, water and paper by 5% per reporting of several IT servers; and full time equivalent employee (FTE) ■ pursuing energy effi ciency opportunities ■ effi ciency upgrades of the lighting and reduce greenhouse gas emissions in our retail, commercial and data system at our head offi ce building at and waste by 5% per FTE. centres beyond our 5% target 100 Queen Street, Melbourne. We have met or exceeded our targets ■ continuing engagement with suppliers These initiatives also contributed to in relation to electricity, greenhouse for mutual education and joint footprint a reduction in total greenhouse gas gas emissions, paper consumption reduction emissions per FTE in 2007 of 8.5%. and waste management. We are below ■ providing quarterly reporting of energy ANZ uses the Australian Greenhouse target on water consumption. consumption of each ANZ Division Offi ce ‘Factors and Methods Workbook’ The knowledge we have developed to assist business units identify for calculating emissions. This method is during the past two years will inform opportunities to reduce energy consistent with international greenhouse and sharpen our focus on continuous consumption. accounting standards and protocols. improvement. The following explains our performance WASTE One of the challenges we have faced in 2007 against key environmental Over the last two years we have in regard to power consumption is the indicators. An assurance review was introduced a number of measures to growth of our business. During the target undertaken by SGS, an independent reduce the amount of waste we generate period, ANZ’s contact centre moved to inspection, verifi cation, testing and that goes to landfi ll. 24 hour, seven days a week operations, certifi cation company, to validate the we opened 79 more branches and factual accuracy of all environmental Waste audits and assessments were installed 1,040 more ATMs. data published in this report. undertaken by consultants at 10 major commercial sites in June 2007. They ENERGY USE We have now set targets for the next found that ANZ had opportunities to 2 years, with the objective of a further Coal-fi red electricity costs ANZ improve at all sites through better use 5% reduction in electricity and water approximately $16 million a year of existing recycling facilities and consumption per FTE, as well as a and is responsible for approximately introducing new processes such as 10% reduction in paper purchasing 95% of our greenhouse gas emissions. organic recycling. per FTE and a 10% reduction in waste Our incentive to reduce our to landfi ll per FTE. consumption is therefore fi nancial as well as environmental.

TWO-YEAR TARGET PERFORMANCE PERFORMANCE STATUS AGAINST CATEGORIES (AUST) UNIT/FTE 2007 2006 2005 2006–2007 2005-2007 2 YR TARGET Electricity mWh 6.89 6.99 7.25 -1.5% -5.0%

Water kL 14.43 15.50 14.34 -6.9% 0.7%

Waste kgs 0.24 n/a 0.36 n/a -32.7%

Paper tonnes 0.20 0.17 0.22 -19.3% -9.6% Greenhouse gas tonnes co –e 8.58 9.37 9.32 -8.5% -8.0% emissions 2 Note: Water and waste results based on fi gures from ten key sites

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 79 MANAGING OUR DIRECT IMPACT IN AUSTRALIA CONTINUED

We continued to expand co-mingled applications and preparing TRANSPORT recycling of glass, aluminium and documentation for settlements. This year we have worked on reducing plastics across the organisation and ran the environmental impact we have on Changes in Australian credit law this year a pilot to recycle obsolete computers the road. will also give credit providers greater and electronic offi ce equipment, which opportunity to communicate with their we plan to roll out more broadly in 2008. ANZ currently leases more than 600 customers electronically and we will be vehicles for use by staff as part of their Last year we reported on the launch at looking to capitalise on this paper- role. To reduce the environmental ANZ of ‘Cartridges 4 Planet Ark’ – a saving opportunity throughout 2008. impact of this fl eet, we introduced a program to recycle printer, fax and copier policy specifying fuel-effi cient 4-cylinder WATER cartridges. Collection boxes have been cars as the preferred lease vehicle for Water use is a minor part of ANZ’s total deployed nationally. Since October 2006, staff. These vehicles will replace environmental footprint but in light of more than 13,000 items have been 6-cylinder cars as leases expire over collected, saving 14.2 tonnes of material the severe water shortages being the next four years. from going to landfi ll. experienced in Australia, we share a responsibility with the rest of the Our Corporate Banking business took PAPER community to use this resource a further step in 2007 by announcing We have taken a multi-faceted approach responsibly. it would convert its fl eet of 11 pool to paper based on recycling, reducing cars to petrol-electric hybrid vehicles. use and the ordering of stock with higher Water consumption per FTE fell by The model chosen by ANZ delivers a recycled content. Our people now also 6.9% this year, helped in part by some fuel economy fi gure of 4.4 litres per have the option of purchasing FSC- practical initiatives such as: 100km and produces only 106 grams certifi ed offi ce paper through our ■ encouraging staff to save water at work of CO2 per kilometre, around half that stationery supplier, Corporate Express. through awareness campaigns; of a 6-cylinder sedan. Overall, we have reduced paper ■ installing fl ow restrictors and low-fl ow We have recently invested in an consumption per FTE by 9.6% since showerheads at major sites; improved video conferencing system 2005. While our paper consumption ■ trialling waterless urinals, dual- to reduce our reliance on air travel in 2007 increased by 19.3% per FTE, fl ush toilets and other water-saving between our headquarters in Melbourne related largely to greater use of print technology in the fi t-out of fi ve fl oors and our operations in Bangalore, India. materials, 23% of this paper was from at 55 Collins Street, Melbourne The new system will be launched in recycled content, up from 19% last year. (these measures are expected to save December 2007. We recycled 1,276 tonnes of paper and approximately 750,000 litres per year) cardboard and 16% of paper consumed was FSC-certifi ed. Through 2008 and 2009 we are aiming to develop a greater understanding of Our central supply chain management the drivers of our water consumption. area has reduced by 10 pages all We have monitored a number of our supplier contracts and we have commercial buildings and branches to converted employee police checks to an measure water consumption, and aim electronic process, saving an estimated to improve the precision of the data we 70,000 sheets of paper per year. collect by installing ‘smart’ water meters In May, our Mortgages business at these sites. This will allow us to announced plans to cut paperwork monitor water consumption, wastage by making greater use of computer and leaks on a regular basis and identify ‘imaging’ technology when assessing water saving opportunities.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 80 MANAGING OUR DIRECT IMPACT IN AUSTRALIA CONTINUED

KEY ENVIRONMENTAL INDICATORS AUSTRALIA NEW ZEALAND

UNIT 2007 2006 2005 2007 2006

Fulltime Equivalent FTEs 19,720 18,656 17,806 9,467 9,379 Occupied Building Space m2 530,039 514,828 510,778 236,897 237,771 Energy 1. Total energy consumed in premises MWh 148,617 141,890 139,128 56,674 56,909

1.1 Electricity consumed 135,846 130,461 129,173 52,923 53,439 1.1.a Electricity consumed/FTE 6.89 6.99 7.25 5.59 5.70 1.1.b Electricity consumed/m2 0.26 0.26 0.25 0.22 0.22 1.2 Natural gas 11,265 11,106 9,470 3,740 3,427 1.3 Fuels for emergency power units 1,506 324 484 11 42 (petrol, diesel) 2. Non-premises energy (road transport) MWh 12,923 16,432 15,445 17,980 17,448 3. Renewable electricity % 0% 0% 0% 65% 65% Transport 4. Total corporate transport km 109,294,036 94,106,286 91,361,735 49,584,968 50,908,845

4.a Total corporate transport/FTE 5,542 5,044 5,131 5,238 5,428 4.1 Road transport 12,504,320 15,532,767 14,634,792 19,712,268 18,919,307 4.2 Air travel (domestic) 53,696,225 47,588,319 41,303,604 16,411,530 17,201,546 4.3 Air travel (international) 43,093,491 30,985,200 35,423,339 11,568,587 12,951,402 Paper 5. Total paper consumed tonnes 3,927 3,114 3,921 1,646 1,679

5.a % FSC chain of custody certifi ed paper 16% 0% 0% 94% n/a 5.b % Recycled content 23% 19% 1% 0% 0% Water 6. Total water consumed from 10 key sites kL 122,859 126,049 116,852 n/a n/a Recycling 7. Total material recovered, recycled or reused tonnes 1,317 1,387 1,329 631 582

7.1 Total paper and cardboard recycled 1,276 1,383 1,329 625 582 7.2 Total other recycled 42 3 – 7 – Waste to landfi ll 6. Average daily waste from 10 key sites kgs 2,025 n/a 2,806 n/a n/a Greenhouse Gas Emissions

8. Total GHG emissions tonnes co2-e 169,145 174,814 166,001 13,138 13,014 8.a Total GHG emissions/FTE 8.58 9.37 9.32 1.39 1.39 8.1 GHG emissions of premises energy use 165,611 169,975 161,452 8,642 8,660 8.2 GHG emissions of non-premises energy use 3,534 4,839 4,549 4,496 4,353

NOTES ON PAGE 82

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 81 MANAGING OUR DIRECT IMPACT IN AUSTRALIA CONTINUED

STAFF RESOURCES RESPONSIBLE OPTIONS FOR INVESTORS INVESTMENT IN SUSTAINABLE This year we invested in measures to In April this year we launched three INFRASTRUCTURE increase our staff’s awareness and offers of the ANZ Sustainable Protected We continued our substantial support understanding of environmental issues. Responsible Investment over Term of renewable energy infrastructure this (ASPRIT), a wholesale fi xed term year through the Energy Infrastructure Cool Change is an intranet site available interest investment trust linked to Trust (EIT), a special-purpose trust to all ANZ staff developed in partnership the performance of the Sustainable to encourage investment in more with WWF Australia. The site includes Asset Management (SAM) Sustainable sustainable energy sources. EIT has a resource library of industry reports, Leaders Australia Fund, also known over $475 million of equity invested information, data and studies and a as SAM Australia Fund. in a number of projects that seek to blog to encourage communication, respond to key environmental issues. between interested ANZ staff and It gives investors the opportunity EIT is managed by ANZ Infrastructure between ANZ staff and WWF, about to benefi t from the performance of Services (ANZIS) and this year acquired environmental issues. approximately 70 Australian companies the 91MW Wattle Point Wind Farm in considered leaders in integrating A six weekly e-bulletin also provides South Australia, one of the largest environmental and social factors into subscribers with regular news, editorials, operating wind farms in Australia. their business strategies. There is views on current developments and tips currently a total of $90 million of funds This investment complements EIT’s on reducing environmental footprints at under management in the ASPRIT trust. existing investments including: work and at home. There are currently 1,000 ANZ employees signed up to We have also launched the ANZ Climate ■ a 50% stake in Waubra Wind Farm receive the bulletin. Change Trust (ACCT), Australia’s fi rst in north-west Victoria, which will be wholesale fund that invests in Australia’s largest wind farm when An online staff training course was also technologies designed to tackle global completed in 2008 launched this year to give staff a better warming. ACCT is a six-year investment ■ 68% ownership in the project to understanding of ANZ’s environment product which uses the SAM Sustainable construct and operate a bio-diesel targets and how they can contribute to Climate Fund as the underlying fund for production plant near the border of ANZ reducing its environmental impact. its returns. Investors in this product are Victoria and New South Wales As at September 2007, 248 staff had given exposure to the performance of completed the course. ■ 71% ownership in the Dalby ethanol 40 to 60 global companies that provide refi nery in Queensland products and services to prevent climate change or alleviate its effects.

NOTES FROM: KEY ENVIRONMENTAL INDICATORS TABLE (PAGE 81) 1 Environmental performance reporting has improved in NZ. The 2006 fi gures for occupied building space and FTEs have been adjusted to improve accuracy. 2 NZ ‘GHG emissions of non-premises energy use’ has been recalculated using ‘actual’ litres of petrol purchased, rather than estimated based on km travelled. 3 The 2006 NZ ‘GHG emissions of premises energy use’ fi gures previously published included a 65% offset for renewable energy. Further investigation identifi ed that the NZ GHG conversion factors also accounted for renewable energy. This duplication has since been corrected, resulting in an increase of almost 50%. 4 NZ Road transport fi gures exclude UDC distances as this was not reported in the 2006 baseline. UDC is a subsidiary of ANZ National Bank Limited. 5 ‘Total other recycled’ includes mixed sources (glass, aluminium, plastics) and printer/fax/copier waste, which were all introduced in Q3 2006. 6 Australian water consumption fi gures have been adjusted to enable comparison with 2005. Adjustments include only reporting fi gures from the 10 baseline sites and only including consumption from one water meter at 85 Spring Street, Melbourne. 7 Australian electricity consumption contains a small amount of estimation to account for bills that have were not available at time of reporting. This could lead to a variance of plus or minus 1%. 8 Australian electricity consumption does not include electricity from sites where the billing is rolled up into lease contracts (e.g. some branches in shopping complexes). 9 Road transport fi gures include fl eet and car rental kms travelled. 10 Total GHG emissions is calculated based on electricity, gas, diesel and road transport. 11 FSC chain of custody for print paper is certifi ed to the paper mills, % FSC for offi ce paper refers to the % of offi ce paper with FSC labelling. 12 Electricity from a non-ANZ tenant within one of our buildings, measured by sub meters, has been removed. This caused minor changes in the 2005 and 2006 electricity fi gures.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 82 MANAGING OUR DIRECT IMPACT IN AUSTRALIA CONTINUED

■ 50% shareholding in a project to INDUSTRY PARTICIPATION construct a 336km gas transmission We continue to participate in a number pipeline and 33MW gas-fi red power of industry and Government initiatives station in Esperence, Western Australia to promote environmentally responsible which will replace diesel generation, business practices: integrate two wind farms into the ■ The Greenhouse Challenge Plus, a electrical system and provide natural partnership between the Australian gas distribution to the community Government and industry to reduce ■ interests in the Breemar and Kwinana greenhouse gas emissions and gas fi red power stations encourage continuous improvement ■ 100% ownership of the gas fi red 135MW of the information used by industry Condamine Power Station development to report on and manage greenhouse in Queensland. gas emissions SOLAR CITIES ■ The United Nations Environment Program Finance Initiative and in ANZ is part of the consortium selected particular, the development of an online by the Federal Government’s Solar Cities training tool, ‘Climate Change: Risks initiative, which is designed to and Opportunities for the Finance Sector demonstrate, through pilots in several sites across Australia, how solar power, ■ UK-based Climate Group’s Financial energy effi ciency and better information Leaders, including the development on energy use can produce a sustainable of low carbon principles for lending and energy future in urban locations. investing and approaches to assessing the climate risks in loan portfolios As part of the program, ANZ offers a ■ The Carbon Disclosure Project 5, a home loan with a competitive rate that survey of the world’s top 500 companies is linked to the purchase of a solar on their management of climate-related power and hot water system and fi nance risks and opportunities. for business and corporate customers for the purchase and installation of large solar power systems and energy effi ciency technology.

RECOGNITION FOR DISCLOSURE ANZ was honoured as ‘Best in Class’ for our approach to climate change disclosure by the Carbon Disclosure Project. ANZ is one of 68 FT500 companies included in the Climate Disclosure Leadership Index. In addition we were recognised in a report issued by Net Balance Foundation as the No.1 Australian fi nancial institution for climate change disclosure. Our improved disclosure was recognised by the Dow Jones Sustainability Index with the Environmental Reporting category score increasing by 20% this year to 95%.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 83 OUR RESULTS SUPPLY CHAIN MANAGEMENT

We developed a Sustainable Procurement However, rather than concentrate on External subject matter experts joined Policy in 2005 and this year continued suppliers merely on the basis of their many of these discussions so that we to work on improving the management size or the amount we spend on their had an understanding of what was best of our supply chain. products and services each year, we practice in the supplier’s industry and identifi ed 30 suppliers based on the to ensure all potential environmental Our Policy commits us to: following three criteria: issues were identifi ed. ■ integrate social and environmental considerations into our procurement ■ our annual spend on the supplier; Action plans were then developed, of products and services ■ the potential environmental impact of containing specifi c measures to improve the supplier’s performance. ■ assist our suppliers understand their the supplier’s activities or the products social and environmental impact and services provided by the supplier; Our focus for 2008 is to follow up our and ■ work with suppliers to improve their suppliers’ performance on their action management of these risks and ■ the nature of the relationship with ANZ. plans and to assess the actual improvement in our environmental monitor their progress. Suppliers who rated highly on the fi rst footprint as a result of the measures two criteria and with whom we have a All new suppliers of ANZ are asked taken by our suppliers. In the coming continuous relationship were chosen to complete a self-assessment year, we also aim to increase by at least for further analysis. These 30 suppliers questionnaire to determine how 50% the number of suppliers chosen included a wide variety of organisations, they are responding to the social and for a more focused social and from multinationals to small business environmental issues facing their environmental assessment. business and we are in the process of specialist service providers and introducing this process to our existing represent approximately 35% of our suppliers. We do this not only to avoid total supplier spend. the risk of dealing with irresponsible We used the self-assessment businesses, but also to share with questionnaire of these suppliers as others what we have learned from the basis for an in-depth discussion responding to our own challenges. about the social and environmental This year we have applied a more challenges and opportunities facing focused assessment of the social and their business and how they can best environmental performance to our most address these issues. important suppliers.

SUPPLY CHAIN STATISTICS – OCTOBER 2006–SEPTEMBER 2007 (AUSTRALIA)

Suppliers that have completed ANZ sustainability self-assessment questionnaire 170

‘Key 30’ suppliers who have completed ANZ sustainability self-assessment questionnaire 93%

‘Key 30’ suppliers who have completed a sustainability interview with ANZ 93%

‘Key 30’ suppliers with an agreed sustainability performance improvement action plan 93%

‘Key 30’ suppliers with an Environmental Policy or Charter 79%

‘Key 30’ suppliers with an Environmental Management System 48%

‘Key 30’ suppliers with their own supply chain management system or strategy 59%

ANZ CORPORATE RESPONSIBILITY REPORT 2007 SECTION 3 ENVIRONMENT AND SUPPLY CHAIN 84 NEW ZEALAND CREATING AN ADMIRED COMPANY

ANZ National has set itself work continues in our people, customer, ■ increasing employee volunteering by 66% three stretching goals: helping community and environmental streams, ■ winning INFINZ Institutional Bank of New Zealand and New Zealanders which will feed into the development of the Year for the third year running. succeed, being a recognised our wider corporate responsibility strategy. ‘Great companies stand out from the leader in the community and Key achievements this year included: creating New Zealand’s most pack and develop a unique presence admired company. ■ increasing staff engagement by 5% that ensures success in the longer to 65% term. For us that means being an We’re the country’s leading fi nancial ■ committing to achieve carbon neutrality organisation our people feel proud services company with a portfolio of by the end of 2009 and establishing a to work at. It means making it compelling for customers to choose six brands, offering a full range of fi nancial working group to drive our environmental us, being recognised for our services. ANZ National, which is also one agenda contribution to the community, of New Zealand’s leading companies, ■ launching recycling in all our corporate and consistently performing for touches nearly two million people, and buildings our shareholders’ is represented in most communities. ■ launching our diversity and inclusion – ANZ National Bank CEO Since our fi rst report in 2006, ANZ agenda Graham Hodges National has made signifi cant progress, particularly in the community and KEY FACTS environmental areas. Our approach has Employee numbers (FTE) 9,134 (FTE) 10,102 (headcount) been to focus on action and engage our Staff engagement 65% people in helping shape our program Branches, ATMs ANZ 150, National Bank 162; ATMs: 745 and embed it into our business. Customer Satisfaction ANZ Retail 64% A Corporate Responsibility Council drives and monitors our Corporate Responsibility Customer Satisfaction National Bank Retail 72% agenda across the business. Strategy Community investment AUD $1.3 million

OUR GOALS Our approach to Corporate Responsibility is outlined in our business goals and underpinned by our values.

GOAL COMMENTARY PERFORMANCE

Conduct a formal stakeholder engagement We held a forum with community stakeholders in September 2007. Feedback will Achieved program to understand community inform the development of our three-year community strategy. expectations of ANZ National

Work with our stakeholders to embed Continuing progress towards a sustainable supply chain; working with suppliers Achieved social and environmental considerations through self-assessment and evaluation processes, to ensure our social, ethical and in our policies, practices and standards environmental standards are refl ected in our procurement of goods and services. Environmental screening has been implemented into our Rural and Institutional businesses.

Implement specifi c programs to reduce Energy consumption is consistently decreasing and we are moving towards our Partially achieved our environmental footprint by 5% by targeted footprint reduction. A range of environmental initiatives have been 30 Sept 2008 implemented to ensure that we can achieve our target by September 2008.

Develop a program to help New ANZ’s MoneyMinded program has been adapted for new families and piloted Achieved Zealanders increase their fi nancial with Plunket August to October 2007. We plan to roll out this program to more knowledge, in response to the issues than 2,000 families in 2008, as well as work with other community partners. raised in the ANZ-Retirement Commission Financial Knowledge Survey

Continue our program and policies to Staff engagement is a priority and targeted programs across the business Achieved ensure staff engagement remains high contributed to a 5% increase in staff engagement in 2007, achieving a score of 65%.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 85 INVESTING IN OUR PEOPLE

ANZ National Bank has embarked PROMOTING DIVERSITY AND on a journey to be ‘New Zealand’s INCLUSION most admired company’. We believe that diversity drives innovation, which is key to our growth We aim to provide our people with the strategy. We are committed to building environment, tools and support they an inclusive culture where the ideas, need to realise their full potential. beliefs, attitudes and skills of every Matthew Pickering, Rural Regional Manager, won the New Zealand EEO Trust’s 2007 Our focus in 2007 has been on: person are brought to the surface and ‘Walk the Talk’ award for modelling and valued. Our Diversity and Inclusion championing work-life balance. He balances ENGAGING OUR PEOPLE a team with a busy portfolio, family and in- Council, made up of senior business Engaged employees make the extra volvement in his local Surf Life Saving Club. leaders, drives our ‘Diversity and effort to meet or exceed customers’ Inclusion’ program which was launched expectations and contribute to our this year. It focuses on three areas: success. Our annual Engagement and Culture Survey measures staff ■ Flexibility – Making Choices Work engagement and captures feedback – creating an environment which from our people. In 2007, 90% of supports and embraces the way our our people took part in the survey. people want to approach work and Engagement increased from 60% their life outside of work MANAGING A CAREER THAT MATTERS in 2006, to 65% - well above the ■ Respecting and Refl ecting the IN AN ORGANISATION THAT MATTERS Australasian fi nancial services Community – understanding, We’ve recently launched an online benchmark (58%). respecting and refl ecting our diverse career portal to support our broader nation enables us to better connect GROWING OUTSTANDING LEADERS organisational strategy of equipping with our customers, current and future Our staff engagement and business our people with the skills for life-long employees and the community performance depend on our leaders learning. In 2007, we invested creating and inspiring high-performing ■ Diversity in Leadership – to enhance NZ$9.2 million in Learning and teams. This is supported by a creativity and innovation we need to Development and our people completed comprehensive leadership development build a culture where our leadership 48,816 learning initiatives. teams are diverse and we can harness curriculum and accelerated talent CHALLENGES a variety of opinions, experiences development programs. In 2007, Our challenge is to lift engagement in and insights. we’ve run Leadership Development parts of the business which support courses for more than 725 participants, ANZ National Bank sponsored the multiple brands. Our people have told and 150 managers have participated New Zealand Equal Employment us our organisational identity needs to in our talent initiatives. Opportunities (EEO) Trust’s national be stronger and more clearly articulated. symposium ‘The Diversity Effect’. This is particularly important in our The event focused on workplace central multi-brand businesses. We have diversity, work-life balance and embarked on a project to more clearly alternative solutions to lifting articulate what ANZ National stands for, business performance. to our people and potential employees.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 86 GETTING IT RIGHT FOR OUR CUSTOMERS

ANZ National has a presence in CUSTOMER SATISFACTION In the institutional markets business, most New Zealand communities For the third year running, Corporate ANZ National Bank was also number one through its 150 ANZ and 162 and Institutional customers have Lead Dealer for both Foreign Exchange National Bank branches and voted ANZ National ‘Bank of the Year’ and Interest Rates Derivatives (Peter Lee 745 (419 ANZ and 326 National at the National Business Review 2007 FX and IRD Survey, December 2006). Bank) ATMs. Institute of Finance Professionals DISPUTES BEFORE THE BANKING New Zealand Awards. OMBUDSMAN Our aspiration is to ‘Help New Zealand ANZ National Bank has also maintained Robust customer complaint resolution and New Zealanders succeed’ and its position as number one Lead processes are in place in both the our approach to customer service is Relationship Bank for large corporations ANZ and The National Bank brands, underpinned by our value: ‘Do what’s and institutions in New Zealand for with teams responsible for complaint right for the customer’. the third year in a row in the Peter Lee resolution reporting directly to Retail In 2006, ANZ launched ‘WOW!’, an Relationship Banking Survey 2007. Executives. ANZ recorded the lowest internal cultural change program to We also achieved a number one ranking number of disputes investigated by the inspire and enable staff to deliver a this year on key indicators, including Banking Ombudsman among the major new level of customer experience. In Relationship Strength, Most Trusted banks in New Zealand in 2007. addition to engaging staff with their Adviser, and Most Creative Ideas brand, the program is having a positive and Solutions. impact on customer satisfaction. In 2007, 64%* of customers rated ANZ’s service as very good or excellent. This is a considerable increase from 59% in 2006 and an eight-year high. ‘WOW!’ has CUSTOMER SATISFACTION been so successful that other parts of the business have been incorporating 2007 2006 2005 2004 aspects into their own initiatives. ANZ Retail 64% 59% 59% 54% To support its people in helping National Bank Retail 72% 71% 73% 73% customers achieve their fi nancial goals Based on four quarter rolling data from the ACNielsen Consumer Finance Monitor in life, The National Bank refreshed its ‘Service First’ program in 2006. The program, which aims to identify ways for every staff member to deliver exceptional customer service, is paying DISPUTES BEFORE THE BANKING OMBUDSMAN dividends – almost three quarters of all 2007 2006 2005 2004 National Bank customers rate the service ANZ 18 19 25 57 they receive from The National Bank as very good or excellent. National Bank 45 31 23 37

ANZ CORPORATE RESPONSIBILITY REPORT 2007 87 HELPING NEW ZEALANDERS SUCCEED

The ANZ-Retirement Commission The National Bank launched its ‘Home FINDING NEW WAYS TO SERVE Financial Knowledge Survey Buyers Centre’. This ‘one-stop shop’ OUR CUSTOMERS (2006) found that there are low online resource contains tips, checklists, In 2007, we launched mobile phone levels of knowledge among calculators and a six-step home-buying banking allowing customers to check consumers about some aspects process for fi rst home buyers. The site balances and make transactions from of home loans and some basic has had over 441,500 visits since the their mobile phones. Mobile phone financial terms are not well launch in December 2006. banking offers a convenient solution understood. A National Bank initiative to make it and a whole new banking channel to easier for customers to do business with New Zealanders, who own more than Over the past two years ANZ has us has benefi ted both customers and three million mobile phones. focused on simplifying products and the environment. Replacing six-page ANZ and The National Bank were the customer communications. Twenty-six loan applications forms with an online fi rst banks in New Zealand to introduce product brochures have been reviewed process and a one-page document multi-lingual ATMs featuring Japanese, and condensed to eight brochures, with containing terms and conditions has Korean, Chinese and English language the content revised to ensure they are simplifi ed the process for customers options. We now provide a unique service clear, simple and meet the needs of and saved more than 2 milion pages to Asian tourists and business people, our customers. of A4 paper in 2007 alone. international students and migrants. A new booklet, ‘Your guide to healthy ANZ has launched a credit card plan CHALLENGES AHEAD fi nances’, which is available in all to help customers manage their debt. ANZ branches, provides simple tips, As a multi-brand company with a diverse Customers can now opt for a fi xed budgeting tools and information on customer base, one of our key challenges repayment plan and access special debt reduction and retirement planning is to defi ne a corporate responsibility interest rates on specifi c purchases and information to help customers approach that is consistent and relevant balances. Aimed at assisting customers understand the basics of money across our various brands. Work is who are having trouble repaying their management. already underway on the development balances, the plan allows them to of socially responsible customer spread their payments and pay a lower commitments across our business. interest rate over a certain period of In 2008 we aim to implement specifi c time (six to 36 months). By spreading initiatives to support these commitments payments and reducing the debt, we’re in our major customer segments. reducing the number of customers entering collections, and helping people get back on track with their credit cards.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 88 MAKING A DIFFERENCE IN OUR COMMUNITIES

ANZ National is committed FINANCIAL LITERACY In response to the results of New to making a difference in our Media stories about housing Zealand’s fi rst fi nancial literacy study, communities. affordability, household debt levels the ANZ-Retirement Commission and fi nance company collapses Financial Knowledge Survey, ANZ Our approach is to invest at a local level, continue to highlight the importance of committed to invest in programs which through volunteering, matched giving consumers having good fi nancial skills help New Zealanders increase their and sponsorships which channel funds and knowledge so that they can budget, fi nancial knowledge and integrate raised into local activities. plan, and save for the future and the fi ndings into our business. During 2007, our people donated more make the best decisions for their than 16,600 volunteer hours to help personal situation. build houses, raise funds, restore nature reserves and assist in many other community projects. This is a 66% increase on 2006. To support New Zealand’s National Volunteer Awareness Week, we ran our fi rst ANZ HELPING FAMILIES SUCCEED FINANCIALLY National ‘Community Week’ in June. ANZ is giving new mums and dads a helping hand to better manage their fi nances. Teaming up with family agency Plunket, ANZ is using the MoneyMinded fi nancial In 2007, we also launched the ‘Making education program as the centrepiece of a pilot in four New Zealand regions. a difference’ ANZ National Staff The MoneyMinded program has been specially tailored to refl ect the requirements Foundation, our payroll matched giving of new parents. program in which every dollar staff contribute is matched by the bank. “We like to look at families holistically so that if they’re making good money Forty-eight New Zealand community decisions, then that will benefi t the children,” says Plunket’s National Parenting groups have received Staff Foundation Education Advisor Claire Rumble. grants this year. “The arrival of children and going onto one income can put pressure on family fi nances, so it’s great that we’re able to team up with ANZ in this way.” Following our award-winning ‘5s for under fi ves’ fundraising campaign for It is anticipated the program will reach more than 2,000 new parents when it is Plunket in 2005/06, which raised more rolled out in 2008. than NZ$703,000, ANZ has become a Star Sponsor of Plunket and Principal Sponsor of Plunket’s annual appeal. The October appeal saw ANZ branches throughout New Zealand hosting fundraising events for Plunket. Plunket is New Zealand’s leading provider of child and family health services and reaches 96% of children under the age of fi ve. ‘Raise a million hopes’ was the theme for The National Bank’s 2007 sponsorship of the Cancer Society’s Daffodil Day. For the fi rst time in our 17-year relationship, National Bank staff raised more than NZ$1 million for the annual appeal. Branches and staff throughout New Zealand have raised more than NZ$12 million for Daffodil Day since the sponsorship started.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 89 MANAGING OUR IMPACT ON THE ENVIRONMENT

With the New Zealand Government WASTE TRANSPORT ratifying the Kyoto Protocol, Improved waste management systems Overall transport kilometres travelled environmental responsibility have been introduced to assist in by our people decreased this year has become increasingly reducing our total waste to landfi ll. by 2.6%. A number of initiatives are important for government, Key initiatives include: underway to reduce our kilometres business and consumers. ■ The introduction of recycling facilities for travelled, and greenhouse gas co-mingled, glass, aluminium, plastics, emissions: ANZ National is committed to achieving and paper, across 17 commercial ■ Hybrid, diesel, and downsized engine carbon neutrality by 2009. A working buildings, reaching almost 50% of our capacity vehicle options, are now being group has been established to drive workforce. The rollout of this initiative introduced into our vehicle fl eet. initiatives towards our 5% footprint will continue across our retail branch ■ reduction goal, and to develop a longer networks and remaining commercial Taxi sharing is now in place at Auckland term environmental strategy. buildings into 2008. and Wellington airports for morning fl ights to ensure greater effi ciency on ■ Agreements with suppliers to enable ANZ National is investigating the transport to our CBD offi ces. potential of our business to achieve re-use or recycling of PCs, cell phones, ■ Promotion of video conferencing and a world-recognised standard in monitors, packaging, envelopes, other meeting options has resulted environmental management. toner cartridges, other hardware and offi ce equipment. in a signifi cant reduction of 10.7% in Water is not reported in our key international air travel. ■ Working with suppliers to ensure environmental indicators. As it is not unwanted electronic and potentially SUPPLY CHAIN a critical issue or a scarce resource in hazardous equipment is disposed New Zealand, the infrastructure is not During 2007, self-assessment tools of in a safe and environmentally in place to allow us to monitor and were introduced to screen suppliers. friendly manner. report on water consumption. We have adopted a targeted approach ■ Introducing reusable bags to cut down to our screening of suppliers, ensuring Acknowledging that our lending waste associated with branded events all new tenders, where appropriate, activities also have an impact on the and promotions. have applied the environmental environment, environmental risk PAPER USE self-assessment tool. Dialogue is assessments are carried out for all underway with our largest suppliers Our paper use has decreased over the new lending in the rural sector and to ensure that we are working together past year by 2% and we have increased environmental and social screening has to explore options for reducing, reusing been in place across our Institutional the volume of paper recycled by 7.4%. or recycling resources. With the help lending activities since 2006. These savings have largely resulted of our suppliers, we launched an from behavioural changes promoted ENERGY and encouraged with our staff. Options ‘Environmentally Friendly’ catalogue of Sixty-fi ve per cent of the energy used for double-sided and multi-page printing, offi ce products to our people, to ensure by ANZ National already comes from promoting the use of electronic rather they can access products that help renewable resources. To help manage than paper resources, and encouraging minimise our impact on the environment. energy consumption, in 2007 we recycling or reusing have resulted in ENGAGING WITH STAKEHOLDERS launched the ‘Better Off’ staff education a saving of 625 tonnes of paper, We have regular contact with a number campaign to all corporate sites and our equivalent to 8,437 trees. of organisations, such as the Energy branch networks to encourage staff to Effi ciency Conservation Authority (EECA) turn off equipment and lighting when In addition, 95% of the paper used in and Ministry for the Environment, to not needed. our offi ces and printing comes from sustainable Forest Stewardship Council help ensure that our environmental We have completed energy audits at (FSC) accredited forests and is made policies and practices are in line with high-use sites and established energy from Elemental Chlorine Free (ECF) pulp. New Zealand best practice. management plans, including a range of control initiatives like effi cient lighting, air conditioning, and building timers for lighting.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 90 MANAGING OUR IMPACT ON THE ENVIRONMENT CONTINUED

WALKING BILLBOARDS The National Bank has found an innovative use for its advertising billboards. Made from durable vinyl, the billboards have been recycled locally into 100 laptop bags and satchels for staff. All proceeds will be donated to an environmental charity. ‘We felt that turning our billboards into bags was a great way for us to do something positive for the environment,’ says Senior Manager Retail Strategy Glenn Stevenson. ‘By recycling our advertising material, we’re letting customers know that we’re serious about reducing our impact on the environment. It’s a nice bonus that our people will also create some visual impact with their funky bags.’

LOOKING FORWARD Our emphasis in 2008 will be to further embed Corporate Responsibility into our ‘business as usual’ activities. Specifi c goals include:

Overall ■ Continue to engage with stakeholders to ensure we are responding to issues that are important to New Zealanders

People ■ Improve our performance on the Engagement and Culture Survey

Community ■ Increase participation in community programs – achieve 20,000 volunteer hours and 15% staff membership in the Staff Foundation ■ MoneyMinded fi nancial literacy program: reach 2,000 people through Plunket; develop another partnership for delivery

Customer ■ Develop socially responsible customer commitments across our multi-brand business and implement specifi c initiatives in our major customer segments

Environment ■ Reduce our environmental footprint by 5% from 2006 levels – by 30 September 2008 ■ Become carbon neutral by 30 September 2009

ANZ CORPORATE RESPONSIBILITY REPORT 2007 91 ASIA PACIFIC

ANZ has a long-term commitment We are also working with our partner This screening allows us to identify to being a leading financial banks to provide technical assistance potential risks to our business and to institution in the Asia Pacific in areas such as retail banking products assist our clients to take measures to region, reflected this year and distribution, and small business further improve their own environmental in the creation of a new banking. These are some of the areas performance, for example through fi nance Asia Pacific Division. that have been key to the recent for investment in renewable energy. success of our Australian and When fi nalised, our Forests Policy Increasing ANZ’s presence in the New Zealand businesses. will set out the requirements that must region is a strategic priority for the ANZ Royal was the fi rst bank in be met before ANZ will enter into a organisation, particularly in Asia, where Cambodia to offer internet banking transaction that has a potential impact developing countries are contributing and ‘offsite’ ATMs in addition to on forests or forest biodiversity. This has signifi cantly to global economic growth. those attached to bank branches, particular relevance to our clients in the For ANZ, being a leading fi nancial and this year the ANZ Royal call centre Asia Pacifi c region, where environmental institution in the region is not just became the fi rst to provide 24-hour, protection laws are developing to meet about growing our business. We believe seven-days-a-week service for customers. each country’s economic, social and our presence also provides us with an environmental goals. Over the coming years, we will also opportunity to work with our partners, be working with our partners on the The Policy will not only help clients our clients, governments and other further development of staff policies secure fi nance with ANZ, but will also stakeholders to positively contribute on occupational health and safety, provide them with a benchmark to assist to the further development of these employee development, training, them lift their forestry management economies, including the emerging remuneration, diversity, volunteering standards, and ensure the long-term fi nancial services industry. and community involvement. sustainability of their business. WORKING WITH OUR PARTNERS IN ASIA Our presence in Asia’s developing Policies on water, mining and energy A key role for us in making our markets also means we can, where are currently being developed and partnerships in Asia successful over our contribution is of value, participate will be the subject of consultation the long term is sharing our expertise – in the public policy process of with stakeholders in 2008. particularly in risk management – to governments in the region as they Our adoption of the Equator Principles further strengthen corporate continue to further develop legal and has helped ensure our assessments governance and, where possible, governance frameworks for the growing of proposed major projects in the improve business practices. fi nancial services sector. Asia Pacifi c region are guided by For example, in August 2007, ANZ held WORKING WITH OUR CLIENTS a consistent set of internationally a ‘masterclass’ on credit risk modelling We also have a vital role in helping recognised social and environmental in Singapore for representatives from lift the social and environmental standards. our partner banks and other fi nancial performance of our clients in the region, institutions in the region. The course Read more about how we manage which are operating under governance highlighted the importance of credit social and environmental risks in our and management standards which are scoring in managing overall credit risk and lending and investment decisions on quite different to what we might expect took participants step-by-step through the pages 38 and 39 and pages 51 to 53. in our ‘home’ markets. credit model development process. We have introduced an ‘overlay’ to our social and environmental screening of Institutional clients to ensure our lending decisions are informed by the particular conditions and regulatory environment of the relevant country, in particular its practices in relation to the physical environment.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 ASIA PACIFIC 92 ASIA PACIFIC CONTINUED

OUR PRESENCE Our presence in the Pacifi c dates back to 1880 when the Union Bank (a forebear of ANZ) opened a branch in Fiji. Since then we have

expanded our operations to include retail Asia and corporate banking services in 12 Pacifi c NPAT $171m countries employing almost 2,000 people. Our 38-year presence in Asia has positioned ANZ as Australia’s leading bank in the region.

We have a network of offi ces in 12 Asian Pacifi c countries, with over 1,000 staff providing NPAT $121m corporate and commercial banking, trade fi nance, corporate fi nance, treasury and selected personal and private banking services. This year we have continued to develop strategic partnerships through investments in local Asian banks with established franchises. During 2007 we invested in Asia* Pacifi c Malaysia’s AMMB Holdings Berhad, China’s Cambodia China American Samoa East Timor Shanghai Rural Commercial Bank, Vietnam’s Hong Kong Indonesia Cook Islands Guam Saigon Securities Incorporation (SSI) and Japan Korea Fiji New Caledonia ANZ Vientiane Commercial Bank in Laos, Laos Malaysia Kiribati Papua New Guinea to bring our total number of regional bank Philippines Singapore Samoa Solomon Islands Taiwan Thailand Tonga Vanuatu partnerships to seven, in addition to three Vietnam regional card partnerships. *includes locations of representative offi ces and partnership businesses.

ANZ PARTNERSHIPS IN ASIA COUNTRY BUSINESS NAME PARTNER ANZ OWNERSHIP Indonesia Panin Bank Panin Bank 30% ANZ Panin Bank Panin Bank 85%

Philippines Metrobank Card Corporation Metrobank 40% Cambodia ANZ Royal Royal Group 55% China Bank of Tianjin Bank of Tianjin 20% Shanghai Rural Commercial Bank Shanghai Rural Commercial Bank 19.9%

Vietnam Sacombank Sacombank 10% Sacombank and ANZ Card Company Sacombank 40% Saigon Securities Incorporation (SSI) Saigon Securities Incorporation (SSI) 10%

Malaysia AmBank Group AmBank Group 24.9% Laos ANZ Vientiane Commercial Bank Limited ANZ Vientiane Commercial Bank Limited 60%

ANZ CORPORATE RESPONSIBILITY REPORT 2007 ASIA PACIFIC 93 ASIA PACIFIC CONTINUED

DEVELOPING A FRAMEWORK This year we received government FOR ASIA PACIFIC approval to expand the program to the This year we established a Reputation Solomon Islands, adding three more Risk Committee to guide this work mobile banking trucks to service rural across the whole region. communities in the Malaita and Guadalcanal provinces. We have also The Committee comprises senior introduced the world’s fi rst solar- executives responsible for our powered ATMs in the Solomon Islands, operations in the region as well as allowing us to deliver convenient relevant support areas such as Finance, banking services in areas where this Corporate Affairs, Corporate was not previously possible. Communications and Risk. It is responsible for the development of ENCOURAGING RENEWABLE ENERGY strategies and policies to assist DEVELOPMENT reputation risk management, corporate The low availability and relatively high responsibility awareness and corporate cost of energy is generally recognised governance. as one of the key barriers to economic growth and improvement in quality of COMMUNITY INVESTMENT life for Pacifi c Island states. IN THE PACIFIC Access to banking services can be During 2007 we joined a World Bank limited for some remote villages in the Project to encourage the adoption and Pacifi c. As the largest provider of retail use of renewable energy in Pacifi c Island banking services in this region, ANZ countries. The Project is designed to has taken the opportunity to improve overcome the reluctance of local fi nancial this access. institutions to fi nance renewable energy systems and energy effi ciency Since October 2004, we have partnered investments on affordable terms. with the United Nations Development Program to deliver basic banking Our role is to manage the distribution products and services to more than of World Bank funding to help 300,000 people in remote Pacifi c participating local banks provide villages through the ‘Banking the low-cost loans to rural households Unbanked’ program. and businesses so they can purchase renewable energy equipment such as Under this program, ANZ provides solar panels or hydro energy equipment. basic mobile banking services to ANZ will also be participating in the these communities along with program as a lender. simple passbook-based savings and transaction accounts. Micro-loans from $100 are also available to regular savers to fund start-up enterprises, solar power installations, school fees, boats and improvements to living conditions.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 ASIA PACIFIC 94 OUR PERFORMANCE 1 ANZ has identifi ed a number of indicators to measure our corporate responsibility performance. This chart provides an overview of our performance indicators.

GLOBAL INDICATORS 2007 2006 2005 2004 Financial Indicator Net profi t ($m) 4,180 3,688 3,175 2,815 Cash earnings per share (cents) 2 210.3 194.5 171.8 161.1 Cost to income ratio (%) 2 44.8 45.6 46.6 45.3 Dividend per share (cents) 136 125 110 101 Total shareholder return (%) 15.6 17.1 32.6 17.0 Market capitalisation ($m) 55,382 49,331 43,834 34,586 People Indicator Permanent and temporary employees (FTE) 34,353 32,256 30,976 28,755 Total employee headcount 37,037 35,544 34,380 32,274 Employee engagement (Hewitt Associates) (%) 3 64 60 60 Community4 Indicator Total value of contributions ($m) 17.8 13.8 8.3 6.6 Cash ($m) 10.7 8.1 6.4 – Management costs ($m) 1.3 1.2 0.7 – Time ($m) 3.3 2.5 1.2 – In Kind ($m) 2.4 2.1 – – Financial literacy and inclusion ($m) 4.7 4.4 2.4 – Volunteering time (hours) 73,098 50,735 24,934 7,337

AUSTRALIAN INDICATORS 2007 2006 2005 2004 Customers Indicator Number of branches (including agencies) 5 819 785 760 746 Number of ATMs 2,287 1,887 1,557 1,240 Retail customer satisfaction (%) (Source: Roy Morgan Research – Main Financial Institution) 77.2 75.5 76.6 73.5 Number of retail customer complaints received by our Customer Response Centre 6 33,903 21,483 22,429 30,003 People Indicator Employee engagement (Hewitt Associates) (%) 3 64 60 – 60 Women in executive management positions (%) 25 22 19 17 Staff turnover (voluntary) (%) 13.3 12.9 11.6 – Lost Time Injury Frequency Rate 3.0 3.8 4.2 4.9 Environment Indicator GHG emissions (tonnes CO2-e) 169,145 174,814 166,001 – Total energy consumed (MWh) 7 148,617 141,890 139,128 – Paper (tonnes) 3,927 3,114 3,921 – Water from 10 key sites (kL) 122,859 126,049 116,852 – Recycling (paper tonnes) 1,276 1,383 1,329 –

ANZ CORPORATE RESPONSIBILITY REPORT 2007 95 OUR PERFORMANCE 1 CONTINUED

NEW ZEALAND INDICATORS 2007 2006 Customers Indicator Number of branches 312 309 Number of ATMs 745 705

Retail customer satisfaction – National Bank (%) (Source: AC Neilsen) 72 71

Retail customer satisfaction – ANZ (%) (Source: AC Neilsen ) 64 59 Number of disputes before the Banking Ombudsman – ANZ 18 19 Number of disputes before the Banking Ombudsman – National Bank New Zealand 45 31 People Indicator Employee engagement (Hewitt Associates) (%) 3 65 60 Women in executive management positions (%) 13.0 12.0 Staff turnover (voluntary) (%) 10.9 12.6 Lost Time Injury Frequency Rate 8 1.6 3.6 Environment Indicator GHG emissions (tonnes CO2-e) 9 13,138 13,014 Total energy consumed (MWh) 56,674 56,909 Renewable electricity (%) 65 65 Paper (tonnes) 1,646 1,679 Recycling (paper tonnes) 625 582

ASIA PACIFIC INDICATORS 2007 People Indicator Asia-Pacifi c – Women in executive management positions (%) 14 India – Women in executive management positions (%) 22 Asia – Employee engagement (Hewitt Associates) (%) 3 58 India – Employee engagement (Hewitt Associates) (%) 3 63 Pacifi c – Employee engagement (Hewitt Associates) (%) 3 72

1 As at 30 September 2007, fi gures are global unless otherwise stated and fi gures expressed in millions of dollars have been rounded. 2 Adjusted for non-core items (including signifi cant items, ANZ National Bank incremental integration costs and non-core income arising from the use of derivatives in economic hedges and fair value through profi t and loss). 3 The ANZ Culture and Engagement Survey was not conducted in 2005. 4 Community indicators represent global operations in 2007, Australian and New Zealand operations in 2006, and Australia only in 2005 and 2004. 5 Numbers have been restated to include agencies. 6 All 2006 data has been restated to rectify a data collection error which excluded some complaints with a resolution time longer than one month. 7 The 2005 and 2006 energy detail for ANZ Australia has been updated to exclude a non-ANZ tenant located within one of our buildings in Perth. 8 The NZ LTIFR for 05/06 has been restated to 3.6 from 1.5 as a result of improved data. 9 The GHG data for ANZ New Zealand 2006 has been updated with a corrected renewable energy conversion rate.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 96 RECOGNITION

Many of our initiatives and EQUAL OPPORTUNITY IN THE SUSTAINABILITY AWARDS PRESENTED outcomes have been recognised WORKPLACE AGENCY BY ETHICAL INVESTOR by various award programs Employer of Choice for Women Labour Relations Award and we have also been ranked highly in a number of business FTSE4GOOD TOP COMPANIES FOR LEADERS 2007 surveys. Here are some of our Member of the FTSE4Good – HEWITT, FORTUNE AND RBL achievements: Ranked 18th out of 500 companies globally ADAGE One of the top 20 Australian UNITY FOUNDATION organisations supporting the MONEY MAGAZINE AWARDS Corporate Responsibility advancement of mature and Reconciliation Award experienced employees Bank of the Year, Business Bank of the Year, Home Lender of the Year, Socially For more information about international Responsible Bank of the Year and AUSTRALIAN SERVICE awards visit www.anz.com/recognition EXCELLENCE AWARDS Service Excellence Award Winner of Large Business category for Victorian Retail Banking and Rural and Regional Banking

AUSTRALIAN CORPORATE NET BALANCE FOUNDATION RESPONSIBILITY INDEX No 1 Australian fi nancial institution for Gold medal score of 96.9% climate change disclosure and No 4 for disclosures on stakeholder engagement

PETER LEE ASSOCIATES CARBON DISCLOSURE PROJECT No 1 for Lead Domestic Relationship Bank and Most Trusted Advisor in ‘Best in Class’ and inclusion on the New Zealand Climate Disclosure Leadership Index No 1 for Overall Satisfaction and Most Trusted Advisor in Australia

DOW JONES SUSTAINABILITY INDEX PRIME MINISTER’S AWARDS FOR Number 1 Bank globally EXCELLENCE IN COMMUNITY BUSINESS PARTNERSHIPS Winner of the Multi-State Large Business Category and the Victorian Large Business Category

ANZ CORPORATE RESPONSIBILITY REPORT 2007 97 ASSURANCE ANZ CORPORATE RESPONSIBILITY REPORT 2007

EXTERNAL ASSURANCE STATEMENT AND COMMENTARY

INTRODUCTION Australia and New Zealand Banking Group Ltd (ANZ) has commissioned The Corporate Citizenship Company to provide it with external assurance and commentary on its Corporate Responsibility Report 2007. ANZ’s management has prepared the report and is responsible for its contents. Our objectives were to review and advise on aspects of its contents and presentation, to conduct selected checks to underlying corporate records, and to provide this statement for which we have sole responsibility. Separately, ANZ reports on its performance against its Customer Charter commitments and we have commented on this in the stand-alone Customer Charter document. The Corporate Citizenship Company is a specialist management consultancy advising corporations that seek to improve their economic, social and environmental performance around the world. A detailed note describing our relationship with ANZ and the assurance process we have adopted appears at the end of this statement. Further information about our company, our key personnel and our clients is available on our website (www.corporate- citizenship.com). Our opinion In our opinion, this year’s report provides a fair and balanced representation of the progress ANZ is making in living out its commitments to corporate responsibility. We have examined the strategies, frameworks and processes ANZ has in place for identifying, understanding and managing issues related to corporate responsibility as they arise. Nothing has come to our attention to suggest that information presented in ANZ’s Corporate Responsibility Report 2007 by 20 November 2007 has been materially misstated. Where we believe material gaps in performance data and stakeholder views on signifi cant issues exist, they are identifi ed below. In forming our opinion and making our comments, we have had regard to the principles underlying the international assurance standard AA1000 (www.accountability21.net) notably concerning materiality, completeness and responsiveness. We have also had regard to the reporting guidance for content and the principles for defi ning quality contained in GRI’s G3 sustainability reporting guidelines (www.globalreporting.org). Following the guidelines of the ISAE 3000 (www.ifac.org) standard for the conducting of non-fi nancial audits, we have provided a limited assurance statement. COMMENTARY Corporate responsibility reports should explain how a company impacts society, taking account of the key economic, social, and environmental concerns of its stakeholders. Reports should show how crucial decisions are made and differing interests balanced. They should be honest about shortcomings and demonstrate how a company is evolving in response to stakeholder concerns by listening, learning and improving. Against this goal, we believe that this report demonstrates a further step forward in ANZ’s corporate responsibility performance and in its reporting of it. The report continues to highlight those issues that our assessments show to be most material to the bank and its stakeholders. It is well-balanced, containing a mix of data, commentary and examples that show how policies are lived out. It also distinguishes between actions that ANZ has taken purely voluntarily and those that have been triggered by regulation or legislation. Similarly, ANZ is open about issues on which it has been challenged, including in relation to legal proceedings, controversial investments, as well as day-to-day operations, such as women in management and fl exible working. ANZ has again achieved high levels of employee engagement and customer satisfaction in its key markets of Australia and New Zealand. Customer satisfaction rates are not rising at the same rate they were fi ve years ago, but the trend remains positive with this year’s satisfaction of 77.2% being the highest rating to-date. The extent of ANZ’s efforts to address sustainability issues are represented by the Dow Jones Sustainability Index identifying ANZ as this year’s Banking sector leader. LOOKING AHEAD In our opinion, ANZ’s future reports could be further improved by addressing the following three areas.

ANZ CORPORATE RESPONSIBILITY REPORT 2007 98 ASSURANCE ANZ CORPORATE RESPONSIBILITY REPORT 2007

Reporting scope The breadth of ANZ’s 2007 report has expanded beyond its core markets of Australia and New Zealand to include more detail on operations in the Asia Pacifi c region. This refl ects the formation of the new Asia Pacifi c business division as well as external stakeholder expectations that ANZ’s presence and market share in the region demand fuller coverage in its corporate responsibility reporting. We believe that management systems and future reports should be more integrated across ANZ’s international operations. This would enable ANZ to present a more complete and coherent picture of its business and impacts. This is beginning to happen regarding community and employee information, notably around community investment, employee engagement and women in management. Generally, ANZ reports well on its direct impacts, but ANZ should increase activities regarding its indirect impacts and reporting of this. This should include information about how ANZ engages with and promotes responsible practices with all its customers, including institutional and corporate customers which account for around a third of net profi t after tax. It should also detail its relations with small and medium sized business customers who may need greatest support regarding all aspects of the sustainability agenda. Regarding suppliers, ANZ should increase activities and reporting coverage relating to the management of its procurement processes. ANZ has taken some steps in this regard, but there is much more to be done to incorporate social and environmental considerations into all its procurement processes. Embedding good practice Over the past year ANZ has further embedded sustainability considerations into policies and practices throughout the bank. For example, work has been undertaken to address gaps highlighted by the mapping of ANZ’s policies against the OECD Guidelines for Multinational Enterprises and to consider project fi nancing in relation to the Equator Principles. An internal audit assessed key projects to test social and environmental screens used in institutional lending. Such assessments should be strengthened and it will be an on-going task to ensure that investment staff fully understand and apply ANZ’s responsible lending policies and screening tools. In our opinion, ANZ’s ambitions are best supported when it sets longer term objectives, underpinned by shorter-term goals and targets. More effort should be made to articulate such longer-term objectives and the strategic considerations behind them. Providing context This report has presented a more complete understanding of ANZ’s impacts on society, including a section on economic value added, showing who benefi ts from ANZ’s wealth generating activities. It should further develop this, detailing how its payments to providers of capital are shared, notably differentiating between investors and lenders. In our opinion, corporate responsibility reports should explain the sector that a company works in and how that sector’s products or services benefi t society. They should then explain the role of the reporting company within that sector. Future reports would be enhanced if ANZ explained how the banking and fi nancial services sector impacts on society and ANZ’s role within it. ANZ’s reporting would be set in better context if it were to include more information about signifi cant issues it is trying to address and its reasons for doing so. On climate change, for example, ANZ should report on its analysis of climate change risks and opportunities affecting the bank. It should set and report targets for all the regions in which it operates based on emerging scientifi c consensus on required levels of emissions reduction. ANZ has risen to many past and current challenges and achieved notable recognition for key elements of its corporate responsibility programme. The more signifi cant challenge will be to ensure its systems are suffi ciently robust to identify and address changing circumstances. Ultimately, can ANZ demonstrate through its corporate responsibility reports that it is able to transition from being a responsible bank to one that can promote sustainable development to its own economic advantage?

The Corporate Citizenship Company www.corporate-citizenship.com 20 November 2007

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EXTERNAL ASSURANCE STATEMENT

INTRODUCTION Australia and New Zealand Banking Group Ltd (ANZ) commissioned The Corporate Citizenship Company to provide it with external assurance and commentary on its Corporate Responsibility Report 2007. As a distinct aspect of our assurance we examined performance under the commitments made within this document, ANZ’s Customer Charter Report 2007. ABOUT US The Corporate Citizenship Company is a specialist management consultancy advising corporations that seek to improve their economic, social and environmental performance around the world. In pursuing our business purpose, we have developed our Assurance Services, which assess corporate systems and activities that underpin corporate responsibility and sustainability reporting. Further information about our company, our key personnel and our clients is available on our website (www.corporate-citizenship.com). Scope We have reviewed ANZ’s Customer Charter Annual Report which covers the period 1 October 2006 to 30 September 2007. The report presents information about ANZ’s performance against the nine promises set out in the Customer Charter. ANZ’s management has prepared the Customer Charter Annual Report and is responsible for its contents. Our work covered an assessment of ANZ’s performance against its customer charter commitments; a review of the internal audit process and fi ndings; advice on aspects of report content and presentation; selected checks to underlying corporate records; and provision of this statement for which we have sole responsibility. This limited assurance statement was conducted with regard to the guidelines of ISAE 3000 (available at: www.ifac.org) standard for conducting non-fi nancial audits. This opinion is based on ANZ’s performance against its Charter. It does not extend to an opinion of the performance measures selected by management. Our opinion We believe that the Customer Charter and the annual audit of ANZ’s performance against this charter refl ect ANZ’s commitment to delivering and improving customer service. In conducting our assurance of ANZ’s Customer Charter Report 2007 nothing came to our attention to suggest that information or data has been materially misstated.

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ASSURANCE STATEMENT FROM LBG AUSTRALIA / NEW ZEALAND The LBG model helps businesses to improve the, measurement, management and reporting of their corporate community involvement programs. It moves beyond charitable donations to include the full range of contributions (in time, in-kind and in cash) made to community causes, and assesses the actual results for the community and for the business (see www.lbg-australia.com for more information). As managers of LBG Australia/New Zealand, we have worked with ANZ to review its understanding of the LBG model and its application to the wide range of community programs supported. Our aim has been to ensure that the evaluation principles are correctly and consistently applied. Having conducted an assessment, we are satisfi ed that this has been achieved. Our work has not extended to an independent audit of the data. This is the third year that ANZ has applied the model, and it has again made good progress in capturing and calculating the cost of a higher proportion of its activities undertaken in the community by its business units, and in classifying these according to the LBG model. Its methodology is commendably clear and transparent, and recording systems robust.

Jerry Marston Positive Outcomes, November 2007 www.positiveoutcomes.com.au

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ASSURANCE STATEMENT SGS AUSTRALIA PTY LTD’S INDEPENDENT ASSURANCE REPORT ON ENVIRONMENTAL DATA IN THE AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD CORPORATE RESPONSIBILITY REPORT FOR 2007. NATURE AND SCOPE THE ASSURANCE SGS Australia Pty Ltd was commissioned by Australia and New Zealand Banking Group Ltd (ANZ) to conduct an independent assurance of the Environmental data contained within their Corporate Responsibility Report 2007. The scope of the assurance, based on the SGS Sustainability Report Assurance methodology, included the 2007 data tables and associated notes, contained pages 79–81 and 90–91 of this report. The information in the Corporate Responsibility Report of ANZ and its presentation are the responsibility of the directors or and the management of ANZ. SGS Australia Pty Ltd has not been involved in the preparation of any of the material included in the Corporate Responsibility Report. Our responsibility is to express an opinion on the text, data, graphs and statements within the scope of verifi cation set out below. The SGS Group has developed a set of protocols for the Assurance of Sustainability Reports based on current best practice guidance provided in the Global Reporting Initiative Sustainability Reporting Guidelines (2006), the AA1000 Assurance Standard (2003) and ISAE3000. These protocols follow differing levels of Assurance depending the reporting history and capabilities of the Reporting Organisation. This report has been assured using our protocol for content veracity. The assurance comprised a combination of interviews with relevant employees in Melbourne, Australia and Wellington, New Zealand; evaluation of systems and processes for collection and collation of data; documentation and record review and validation with external bodies and/or stakeholders where relevant. Key Suppliers and contractors were interviewed and/or visited in relation to Energy Management, Paper Supply, Printing Services and Waste Management. STATEMENT OF INDEPENDENCE AND COMPETENCE The SGS Group of companies is the world leader in inspection, testing and verifi cation, operating in more than 140 countries and providing services including management systems and service certifi cation; quality, environmental, social and ethical auditing and training; environmental, social and sustainability report assurance. SGS Australia Pty Ltd affi rm our independence from ANZ, being free from bias and confl icts of interest with the organisation, its subsidiaries and stakeholders. The assurance team was assembled based on their knowledge, experience and qualifi cations for this assignment, and comprised registered EMS, H&S, Quality and Social Systems Lead Auditors, specialists in Greenhouse Gas Emissions and Sustainability Report Assurance. ASSURANCE OPINION On the basis of the methodology described and the verifi cation work performed, we are satisfi ed that the environmental data contained within Corporate Responsibility Report verifi ed is accurate, reliable and provides a fair and balanced representation of ANZ’s environmental performance in 2007. We believe that the organisation has chosen an appropriate level of assurance for this stage in their reporting.

SIGNED: FOR AND ON BEHALF OF SGS AUSTRALIA PTY LTD

Philip Hocking, General Manager System & Service Certifi cation SGS Australia, Noble Park VIC 3174 20th November, 2007 WWW.SGS.COM

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GLOBAL REPORTING INITIATIVE Gerard Brown Julie Bisinella The Global Reporting Initiative (GRI) Group General Manager Head of Corporate Responsibility provides a generally accepted framework Corporate Affairs 22/100 Queen Street for reporting on an organisation’s 22/100 Queen Street Melbourne VIC Australia 3000 economic, environmental and social Melbourne VIC Australia 3000 Telephone +613 9273 4571 performance. ANZ has used the GRI Telephone +613 9273 4991 Facsimile +613 9273 4899 Sustainability Reporting Guidelines Facsimile +613 9273 4875 [email protected] (G3) in our 2007 reporting. Our GRI [email protected] Index is published online at www.anz.com/gri2007.

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