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Screening our clients

Assessing our clients' environmental and social impact

When our Institutional customers apply for finance, we assess how they manage their impact on the environment and society, especially when they do business in sensitive sectors. We believe these issues as just as relevant to an organisation's viability as the more traditional concerns of credit risk, quality of management and business strategy.

If a client or transaction is judged to have the potential to impact ANZ's reputation or involves material issues of concern to our stakeholders, the decision is escalated to ANZ senior management through avenues such as our Reputation Risk Committee.

Client screening tool

We have developed a practical way for our staff to assess clients. The client screening tool takes staff through a series of questions designed to gauge potential social and environmental issues, and therefore the implications of ANZ supporting the business. Clients are rated on their approach to these issues.

Questions raised in the screening tool include whether the client requires an environmental licence or permit to operate, whether there is evidence of previous poor labour standards, and whether the client acknowledges the social and environmental risks of their business and is managing those risks.

Approval of clients that fail to reach a threshold rating is escalated to senior ANZ management.

ANZ applies this screen to all new clients of our Institutional business globally. Existing clients are screened on an annual basis, and again before entering any transaction judged by ANZ to have a potentially significant environmental or social impact.

What we do with the results

Where issues are identified during screening, we evaluate the nature of the issues and any existing or potential stakeholder concerns, discuss the issues with the client, and assess the client's capacity and willingness to manage the issues.

Based on this assessment, we decide whether to proceed with the client relationship and/or transaction, and if so, any measures the client must take to mitigate their social or environmental impact. Read more about how we engage with clients.

2009 results

ANZ is developing a streamlined tool to make it easier for staff to apply relevant reputation, environmental and social policies and screening processes to clients and transactions. Senior business and risk leaders are overseeing development of the tool which will be completed by March 2010. Launch of the tool will be accompanied by a comprehensive awareness program for relevant employees.