Australia’s ANZ has been assessed as the most
sustainable bank globally, at least according to the 2007 Dow Jones
Sustainability Index, an annual survey that provides an assessment
of the sustainability performance of companies. Overall,
Australian, Canadian and UK banks have fared well, writes Douglas
Blakey.
ANZ, Australia’s third-largest bank, has been ranked the most
sustainable bank globally in the Dow Jones Sustainability Index
(DJSI) for 2007, pipping local rival Westpac which had topped the
survey for each of the past five years.
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Published each year since 1999, DJSI aims to provide a benchmark of
sustainability leadership and employs a best-in-class approach,
analysing corporate, economic, environmental and social
performance. The DJSI assesses 2,500 companies worldwide, with the
top 10 percent or so admitted into the index. This year, 203
companies across all industry sectors have been included in the
global index, 25 of whom are banks.
With five banks featuring – Barclays, HBOS, HSBC, Lloyds TSB and
Royal Bank of Scotland – the UK boasts the largest number of banks
listed. Australia also punches above its weight, with three banks
listed: ANZ, Westpac and National Australia Bank.
By contrast, only one US bank, Citi, features on the list.
In a separate assessment of the insurance sector, Allianz was
ranked the sector leader of 20 insurance companies in all who were
admitted to the 2007 index.
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By GlobalData
Three separate
reports
Three reports are released by DJSI, with the world
index supplemented by separate indexes for Europe and, since 2005,
a separate annual North America survey. The North American index
contains only seven banks, six of whom are Canadian with Citi,
again, the sole US-headquartered representative.
The only bank to be dropped since last years North American index
is the US’s largest retail bank, Bank of America (BofA). The move
comes only six months after it announced plans for a comprehensive
$20 billion, ten-year social responsibility programme to “support
the growth of environmentally sustainable business activity [and]
to address global climate change” (see RBI
569).
BofA is replaced in the 2007 index by National Bank of
Canada.
The assessment process for each index covers issues such as
corporate governance, risk management, climate change, supply chain
standards, stakeholder engagement and labour practices.
ANZ, which only released its first CSR report in December 2005 and
which announced plans to go carbon neutral in May with a 2009
target, scored a score of 86 percent in the 2007 DJSI, up 10
percentage points from its score in 2006. The bank either
maintained or improved its performance on 22 of the 23 assessment
criteria.
According to the 2007 survey, ANZ’s improved performance reflects
enhanced value management capabilities and highlights excellent
human capital management, implementation of brand valuation and
strategic stakeholder engagement.
Additionally, the report’s authors said that the bank’s corporate
culture is underpinned by excellent corporate governance, risk and
crisis management as well as codes of conduct. The report praised
ANZ for its climate change governance framework, which it said
covers proprietary tools to measure indirect exposure to the
climate change risks of customers, and developing new financial
services to mitigate identified risks. Innovation and customer
attraction and retention benefit from very good employee relations
underlined by labour practices and talent attraction and
retention.
Working hard on its CSR
agenda
Outgoing ANZ CEO John McFarlane, said in a statement: “We have been
working very hard on our corporate responsibility agenda over a
number of years and it’s pleasing to have our progress recognised
by achieving the leading ranking among banks globally in the Dow
Jones Sustainability Index.”
Environmental group Australian Conservation Foundation, which has
in the past criticised ANZ over the bank’s relationship with
logging companies in Papua New Guinea, acknowledged that ANZ had
made significant progress but it had some way to go on the
sustainability front.
Indeed, while the world’s largest banks have been be working hard
to establish themselves as good corporate citizens, and have
realigned their businesses on more ethical and environmental
agendas, the 2007 DJSI reports that there remains lots of room for
improvement in the banking sector.
In particular, in the fields of eco-efficiency (such as CO2
emissions) and labour practice, the financial sector is ranked last
behind other industry sectors such as utilities, healthcare,
consumer goods, and oil and gas.
