ESG Focus: ASX Heavyweights Showcase ESG Credentials

This story features WESTPAC BANKING CORPORATION, and other companies. For more info SHARE ANALYSIS: WBC

FNArena's dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future: 
https://www.fnarena.com/index.php/financial-news/daily-financial-news/category/esg-focus/

ASX Heavyweights Showcase ESG Credentials

Some of the ASX’s large cap, household companies are demonstrating commitment to environmental, social and governance concerns through strategy integration.

-Big businesses are increasingly expected to show transparency around ESG measures
-Incorporation of ESG as a key strategic priority is becoming more common for businesses
-Westpac, ANZ and BHP have all provided updates on ESG progress and additional measures

By Danielle Austin

Corporate Australia is becoming increasingly transparent about its adherence to environmental, social and governance (ESG) measures in response to mounting expectations from customers and shareholders.

Recently Westpac ((WBC)), ANZ Bank ((ANZ)) and BHP Group ((BHP)) all provided updates on progress meeting ESG-aligned targets and how ongoing company strategy is integrating ESG measures.

Both banks demonstrated a commitment to a range of ESG measures, highlighting work done to encourage women in leadership roles and a range of climate targets. ANZ Bank also raised particular concerns around rising household debt. BHP, meanwhile, offered a large focus on environmental concerns.

A common thread throughout company updates was the undertaking of a holistic approach, particularly in achieving environmental targets. The companies outlined how leveraging influence and resources and working with other businesses, or supporting customers, would help to achieve targets.

Westpac

Westpac already has a track record of work in the environmental space, but announced an elevation of climate change to a key strategic priority for the company. The bank reiterated its sustainable financing commitment, offering sustainability-linked loans to support customer transition to a low carbon future. Other actions discussed included:

-Exiting all thermal coal exposure in their lending portfolio by 2030
-Supporting existing oil and gas sector clients with transition pathways
-Only lending to new oil and gas sector clients that have Paris-aligned goals
-Reducing the carbon intensity of its electricity generation exposure by -28% by 2030

In the social and governance spaces, the company is committed to taking key steps to achieve 50% women in leadership and improve female retention with pay equity and improved parental leave policies.

Additionally, the bank acknowledged work to be done in enhancing cultural diversity and indigenous representation, particularly in leadership.

ANZ Bank

ANZ Bank focused on outlining how incorporating ESG measure into its strategy would create additional value for both customers and shareholders.

To demonstrate its commitment, the bank’s update focused on sustainable finance and financial wellbeing, including positive impact on household debt, and the identification of risk categories within the ESG space including biodiversity, cyber-scamming and economic disparity.

The company highlighted it had beat its women in leadership target for FY21, with women accounting for around 34.8% of leadership roles.

Addressing climate risk, ANZ outlined goals that included:

-Encouraging bank customers to identify climate risk and opportunity
-Supporting the electrification of transport supply chains
-Financing energy efficient buildings
-Providing support to transitioning industries and helping customers develop transition plans
-Reducing emissions produced by bank operations

BHP

Emission reduction targets were already a part of BHP Group’s story, but the company has determined that strategy and capital decisions going forward will integrate climate scenarios. BHP also plans to develop biodiversity strategies and FY30 targets aligned with biological diversity.

Already committed to reducing operational emissions -30% on FY20 levels by 2030, BHP’s latest update has Australia’s largest company on track to meet targets. In the shorter term the company expects to maintain operational emissions in the current financial year at, or below, FY17 levels.

The company also announced an update to its emissions reduction investment, increasing total cost commitment to US$1bn by 2025.

Its greenhouse gas emission targets include reductions in scope 1 emissions (direct emissions, or emissions created as a direct result of company activity), scope 2 emissions (indirect emissions, or emissions generated through the purchase of energy such as electricity), and scope 3 emissions (indirect emissions linked to the business’ operational chain, such as those generated by transportation and distribution).

BHP also estimated a US$2-4bn spend on steel carbonisation by 2030, working with key partners to decrease scope 3 emissions.

Further actions to achieve climate targets include:

-A migration to renewables and move away from diesel fuel use
-Achieving 50% renewable electricity in Queensland coal and up to 50% renewable electricity at Nickel West
-Development of zero greenhouse gas emission haul trucks

FNArena's dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future: 
https://www.fnarena.com/index.php/financial-news/daily-financial-news/category/esg-focus/

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