ANZ chairman Paul O’Sullivan tells AICD function that banks need to respond to climate change
ANZ chair Paul O’Sullivan says banks risk an erosion of community trust similar to the fallout from the financial services royal commission, if they fail to act on climate change.
ANZ chairman Paul O’Sullivan has warned that banks risk a loss of community trust like the fallout from the financial services royal commission if they fail to respond to widespread concerns about climate change.
In a panel discussion for an Australian Institute of Company Directors conference in Melbourne, Mr O’Sullivan said the royal commission highlighted what happens when organisations erode trust and confidence in the community.
“Climate change is a concern for the community, so I think it’s a concern for all companies,” he said.
ANZ has been working with its top 100 emitting customers over the last few years to help them develop plans to reach carbon neutrality by 2050.
The ANZ chair said that, leaving politics aside, more than 80 per cent of global GDP was now committed to net zero.
It was therefore incumbent on the bank to ensure it does not end up with a disproportionate share of lending to companies which are not prepared for the transition.
“So we’ve been working over the last few years with our top 100 emitting customers to develop transition plans and to get them done in a sensible way so we can be confident with the book,” Mr O’Sullivan said.
“And we certainly won’t bank those who don’t want to have such a plan because that would be too risky.”
The reality, however, was that a lot of the nation’s power generation was fired by fossil fuels, which could not be turned off overnight.
A “just and orderly” transition was required, which meant that ANZ would lend to gas projects – even new ones – because gas was an important transition fuel.
In return, the company needed to have a compelling and public plan to reduce its emissions over time, in line with the Paris Agreement.
For those who were “hungry” for opportunities, Mr O’Sullivan noted that there were $US125 trillion of opportunities to participate in the transition to net zero.
On the topic of the nation’s big workforces returning to the office this week, GPT Group chair Vickki McFadden said occupancy levels in the Melbourne central business district had been severely hit in lockdown periods, plunging to about 10 per cent.
Retail outlets at the base of office towers were also badly affected, although they were protected to some extent by the code of conduct which gave them relief if they suffered a big fall in turnover.
Ms McFadden said that, initially, there was a view that the office sector would not return to the status quo; that organisations were likely to adopt a hub and spoke approach where they would adopt a small core.
But that had now changed.
“There is a confidence of a return to the office in CBD areas, but the nature of that return will change,” she said.
“It depends on the workforce, but there will be hybrid working – working from home and the office – and the nature of the office environment will change.
“There is a requirement for more collaborative space, more teamwork-based areas, so it’s changed the design of what you’re doing in a building.
“Culture, training and collaboration seem to be the core motivators for people maintaining a significant office presence.”
