Investing to achieve the SDGs RIAA’s IMPACT INVESTMENT FORUM 10 July 2018 Presenters: Carly Hammond - RIAA Piet Klop - PGGM Eliza Mathews - ANZ Nicole Bradford - Cbus Ross Wyatt - Think Impact Matthew Brennan - Transurban Responsible Investment Association Australasia
About the Responsible Investment Association Australasia (RIAA) RIAA is the peak industry body representing responsible, ethical and impact investors across Australia and New Zealand, with over 220 members managing more than $9 trillion in assets globally. Our goal is to see more capital being invested more responsibly; shifting more capital into sustainable assets and enterprises and shaping responsible financial markets to underpin strong investment returns and deliver a healthier economy, society and environment.
Why engage with the SDGs? • Potential business opportunities • Strengthen stakeholder, client and customer relations • Keep pace with policy development • Stabilising societies and markets • They comprise material ESG factors that should be considered as part of an investor’s fiduciary duty, or will need to be considered in the future • Attractive investment opportunities • A common language with which to shape and articulate an investment strategy
How are investors integrating the SDGs? • Integrating the SDGs into business and organisational strategy • Asset allocation • Product development • Engaging with investee companies on ESG issues incorporated in the SDG framework • Lending support to regulatory reform that contributes positively to the SDGs
Our presenters Piet Klop Senior Adviser Responsible Investment, PGGM (the Netherlands) Eliza Mathews Associate Director, Sustainable Finance, ANZ Nicole Bradford Portfolio Head, Responsible Investment, Cbus Super Ross Wyatt Managing Director, Think Impact Matthew Brennan Head of Sustainability, Transurban
INVESTING TO ACHIEVE THE SDGS Putting the fun back into fund management RIAA Webinar 10 July 2018 piet.klop@pggm.nl 1
Responsible Investment: why and how? Pension with purpose • (participants) Rebuilding trust (regulator) • Proving social utility (fund) • Adding value; attracting • talent 2
Fiduciary duty and impact ESG = “ Doing the thing right” • Fiduciary duty • Reducing risk • Operations-related • Portfol Portfol World io io SDG = “ Doing the right thing ” • Discretionary policy • Creating positive impact • Product-related • 3
Sustainable Development Investments (SDIs) management Impact SDI € 20B Investing in Solutions program 4
Investing in Solutions Listed equities (BOA in Dutch) Private markets No concessions on risk, return or process • Thematic lists: Compliance with Majority play? More targeted search • climate, water, Global Compact? (e.g. Vestas) food & health Cross-asset class committee on impact • Acknowledged Decisive play? Transformational Impact-only (e.g. Siemens) Leader? (e.g. universe Unilever) Portfolio Engagement on construction ESG and impact Communication management (impact vs. ESG) 5
Challenges and a few words of advice 1. Market-rate returns from a. Impact program and choice of impact-only universe SDGs must be owned by client 2. ‘SDG wash ’, to be countered by: b. Conscious investment in impact 1. Impact measurement measurement 2. Careful communication: impact c. Keep it simple , e.g. no ‘ netting ’ alignment vs. ‘real’ impact of negative and positive impacts 3. Limited revenue and impact data d. Start & improve along the way 4. Evolving methodologies and (80-20 rule) standards 6
ANZ & THE SUSTAINABLE DEVELOPMENT GOALS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ABN 11 005 357 522 JULY 2018 MoneyBusiness participants at a workshop in Darwin, Australia. MoneyBusiness was developed to build the money management skills and confidence of Indigenous Australians and develop a stronger savings culture in remote communities.
ANZ AND THE SDGs ANZ IS A SIGNATORY TO THE CEO STATEMENT OF SUPPORT ISSUED BY THE UN GLOBAL COMPACT NETWORK OF AUSTRALIA IN SEPTEMBER 2016 On January 1 2016, the United Nations SDGs came into effect. The 17 goals and 169 targets are aimed at solving the world’s most pressing sustainable development challenges – ending global poverty, protecting our planet and ensuring human rights – over the next 15 years. ANZ recognises the important role business will play in achieving the SDGs and believes them to represent an opportunity for business-led solutions and technologies to be developed and implemented To better understand the SDGs and the linkages to our business, ANZ has mapped the relevant SDGs to our public sustainability targets. We have also embarked on an exercise of mapping the SDGs to our Project and Export Finance book 2
OUR PURPOSE & CORPORATE SUSTAINABILITY FRAMEWORK SUPPORTS THE SDGs ANZ’S CORPORATE SUSTAINABILITY SHAPING A WORLD WHERE PEOPLE AND COMMUNITIES THRIVE FRAMEWORK AND THE SDGs • Through our business activities, customer solutions and sustainability efforts we are delivering on our purpose • We are committed to addressing societal challenges which are all strongly aligned with the SDGs – in particular, environmental sustainability, financial wellbeing and housing affordability and access • We set public sustainability targets to support the delivery of this agenda • We report on our performance annually through our Corporate Sustainability Report (available here) against a range of ESG indicators • We have been consistently recognised as one of the most sustainable banks in the world on the annual Dow Jones Sustainability Index 3
ANZ SDG BOND FRAMEWORK ADHERES TO THE FOUR PILLARS UNDER ICMA SUSTAINABILITY BOND GUIDELINES PILLAR 1: USE OF PROCEEDS - ELIGIBLE ASSETS • Project Finance, Corporate Loans or ANZ expenditures that align to the relevant social or environmental categories set out in our framework PILLAR 2: PROJECT SELECTION - ELIGIBLE CATEGORIES • Nine of the 17 SDGs selected based on ANZ’s business activities and operations • Certain targets within the selected SDGs identified 4
STRUCTURE - ELIGIBLE ASSETS 1 ANZ’s SDG Bond is allocated to six of the nine eligible categories SDG GBP/SBP Category 2 Asset / Type Location Total (EUR m) % Access to essential services; Socioeconomic advancement and Aged Care & Hospital / Corporate & Australia, VIC, QLD, NSW 505 55% empowerment; Project Finance Affordable basic infrastructure Access to essential services; University & Student housing / Socioeconomic advancement and Australia, VIC, NSW 90 10% Corporate & Project Finance empowerment Renewable energy; Renewable / Project Finance QLD 42 5% Energy efficiency Commercial Office / Corporate & ANZ Green buildings VIC, NSW, QLD, WA, NT 198 22% Expenditure Socioeconomic advancement and ANZ Money Minded and Saver Plus / Global 4 0.5% empowerment ANZ expenditure Affordable housing; Affordable basic infrastructure; Clean Transport / Project Finance Australia 74 8% Access to essential services; Clean transport 914 3 100% Total 1. These calculations are of available Eligible Assets as at the date of this presentation that may be financed or refinanced in part or in whole by the net proceeds of the SDG Bond, if issued. This information is indicative only and subject to change without notice . 2. GBP refers to Green Bond Principles and SBP refers to Social Bond Principles. 3. Eligible Asset volume as at 31 March 2018 5
ELIGIBLE ASSETS BREAKDOWN: 31 MAR 2018 A DIVERSE SPREAD OF TARGETS AND ELIGIBLE ASSETS 6
ANZ SDG BOND FRAMEWORK ADHERES TO THE FOUR PILLARS UNDER ICMA SUSTAINABILITY BOND GUIDELINES PILLAR 3: MANAGEMENT OF PROCEEDS Green Bond Working Group • Established in 2015 • Ongoing utilisation for this proposed SDG Bond issuance • Overall responsibility for development and adherence to the SDG Bond Framework Proceeds Management • Allocation at issuance • Allocation throughout tenor • Replacing/Adding Eligible Assets • Eligible Asset Register • Monthly Monitoring • Unallocated proceeds: to be invested in cash or Government/Semi-Government securities only 7
ANZ SDG BOND FRAMEWORK ADHERES TO THE FOUR PILLARS UNDER ICMA SUSTAINABILITY BOND GUIDELINES PILLAR 4: REPORTING & DISCLOSURE ANZ recognises investor interest in transparency of reporting and disclosure and intends to make* the following information available when and as described via ANZ Debt Investor Website Item Intended Timing At the time of first issuance under this Framework Framework Once off: sought at time of first issuance Second Party Opinion (may be sought again if Framework changes or a particular issuance requires it) At initial issuance and when subsequent assurance occurs, if allowed by the assurer Assurance Statements Use of Proceeds Semi- annually in line with ANZ’s Corporate Sustainability reporting timeline Report Annually in line with ANZ’s Corporate Sustainability reporting timeline for our full Impact Report year Corporate Sustainability Report *Subject to applicable laws, confidentiality requirements and any required third party consent 8
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