ENVIRONMENTAL & SOCIAL FRAMEWORK - COMMBANK
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Environmental & Social Framework
Contents Laying the foundations 2 Guiding principles and values 3 Governance and oversight 4 Measuring and reporting on progress and performance5 Areas of focus 6 Climate change 6 Human rights 7 Biodiversity 8 Agriculture, forestry, and fisheries 8 Defence 8 Definitions9
1
2021 ENVIRONMENTAL & SOCIAL FRAMEWORK
COMMONWEALTH BANK
At the Commonwealth Bank of Australia,
our purpose is to improve the financial
wellbeing of our customers and communities.
We recognise we have a responsibility to
manage environmental and social risks,
and to proactively identify opportunities
that will help secure the financial wellbeing
of Australians for generations to come.
Building tomorrow’s bank today means focusing About our Environmental
on doing the right thing and being transparent and Social Framework
about our progress and performance. (the E&S Framework)
Our Environment and Social Framework The environmental and social considerations outlined
recognises the interconnectedness of in this document reflect the key matters we have
identified through feedback and engagement with our
commercial, environmental, and social matters
customers, people, communities, and shareholders.
against the backdrop of changing community
The E&S Framework provides a reference point
expectations. We will routinely review our
for our people and stakeholders on the minimum
Framework to ensure it continues to deliver standards we seek to abide by, the targets we seek
value to all our stakeholders. to implement, and the governance and oversight in
place to support our endeavours.
Please note: all capitalised words and phrases used throughout
this document are defined terms.
Five areas of focus
Climate Human Biodiversity Agriculture, Defence
change rights forestry and
fisheries
2
Laying the foundations
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Our E&S Framework
We believe that conducting our business in
a responsible way and making meaningful
contributions to the communities in which
we operate is critical to delivering balanced
and sustainable stakeholder outcomes.
The E&S Framework is designed to allow
for scalability while remaining focused on
impact. The areas of focus will evolve over
time to reflect the changing environmental
and social context, community expectations
and to account for new regulatory settings.
+ We report on our progress and performance
every year through our annual reporting and
other reporting frameworks see page 5.
3
2021 ENVIRONMENTAL & SOCIAL FRAMEWORK
COMMONWEALTH BANK
Guiding principles
and values
Our approach to environmental and social matters
is underpinned by the following guiding principles.
CBA Code
• Managing and seeking to improve Best practice: guidelines,
the impact of our operations on the
frameworks and initiatives of Conduct
environment and community;
The commitments laid out
We participate in, and are committed
• continuing to strengthen the in our E&S Framework are
to supporting, the following frameworks
integration of environmental and underpinned by our Code
and initiatives:
social risk management into business of Conduct, which is the
practices and procedures; • Equator Principles; ultimate guide for how we do
• RE100; things at the Commonwealth
• seeking to mitigate environmental
Bank. The Code connects our
and social risks through dedicated • Task Force on Climate-related
purpose, values, expectations
products and services; Financial Disclosures;
(with a ‘should we?’ test)
• aligning our behaviours, decisions • Principles for Responsible Banking; and and the key policies to help
and actions to the Group’s Code • UN Guiding Principles on Business us deliver balanced and
of Conduct and Values; and Human Rights. sustainable outcomes for
all our stakeholders.
• taking a risk-based approach to The following additional instruments and
environmental and social matters, frameworks help to guide our approach
with additional due diligence,
where applicable, being applied to
to environmental and social issues: We are guided
• Banking Code of Practice;
lending and investments in sectors by our Values
where impacts are high or sensitive, • Paris Agreement (pursuant to
and jurisdictions where regulatory UN Framework Convention on
frameworks are not fully evolved; Climate Change);
• UN Declaration on the Rights
• where practicable, leveraging our
of Indigenous Peoples;
relationship with customers to mitigate
environmental and social impacts; • UN Sustainable Development Goals; and
• expecting our Suppliers to adhere to • UN Global Compact.
+ Read the CBA Code of Conduct.
our Supplier Code of Conduct, which + Details on how we report on progress
sets out our minimum standards on and performance can be found on page 5.
socially responsible and sustainable
sourcing, or an equivalent standard;
• staying abreast of the changing
regulatory landscape and adapting to
new requirements as necessary; and
• continually improving governance of,
and assurance over, adherence to our
environmental and social commitments.4
Governance and oversight
We are committed to embedding environmental and social
considerations into our business processes and decision-making.
Our approach is facilitated by our risk management framework,
and by targets and minimum standards for a range of specific sectors.
Our E&S Framework is underpinned The CBA Board is responsible
by our internal Group Environmental for approving the E&S Policy and
and Social Policy (E&S Policy) and any overseeing adherence to it, while our
business unit-specific procedures. people are responsible for meeting
The E&S Policy applies to the Group, the requirements of the E&S Policy.
Directors, employees, secondees and Our senior leaders are responsible Reviewing our
contractors. For those parts of the Group for promoting and championing the
that are impacted by foreign or local laws, environmental and social considerations policy settings
regulatory requirements, or contractual outlined in the E&S Policy through their We are committed to
obligations that conflict with the E&S business decisions and interactions. working closely with all our
Policy, the more stringent standard stakeholders and will review
The Group’s Code of Conduct governs
applies. A small number of subsidiaries our policy settings at least
conformance of our people with the
will, within 6 months of publication of every two years to ensure our
Group’s Values and policies, including
this Framework, update their own E&S approach is fit for purpose.
the E&S Policy. Breach of our E&S
policies which incorporate the core
Policy may be regarded as misconduct,
principles and intent of this Framework.
which can lead to disciplinary action
(including termination).5
2021 ENVIRONMENTAL & SOCIAL FRAMEWORK
COMMONWEALTH BANK
Measuring and reporting on
progress and performance
Building tomorrow’s bank today means focusing on doing the right
thing and being transparent about our progress and performance.
Sustainability reporting
Our annual sustainability reporting can be found in the Group’s Annual Report.
Our reporting is aligned with the Global Reporting Initiative (GRI) Standards and
we adopt the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD).
Sustainability surveys
We participate in key sustainability surveys and indices to help measure
our sustainability performance against global benchmarks.
Assessed emissions reporting
Every year, we report on the emissions arising from key sectors within our
business lending portfolio. These insights help us to manage the associated
risks and opportunities, and remain transparent with our stakeholders.
Equator Principles reporting
We became a signatory to the Equator Principles in May 2014. We use the
Equator Principles IV standards to assess, manage, mitigate, and monitor
environmental and social risks in applicable project-related financing and
report annually on our progress.
Modern Slavery & Human Trafficking Statement
We report annually on our progress on identifying, managing, and mitigating
risks of modern slavery in our operations and Supply Chains in compliance with
UK and Australian laws.
Reconciliation Action Plan
Our first Reconciliation Action Plan (RAP) was launched more than 10 years ago.
Our current RAP has achieved Elevate status through Reconciliation Australia.
+ Access our reporting suite commbank.com.au/CRreporting6
Areas of focus
We expect our Clients and Suppliers to We are committed to supporting our Clients and Suppliers
in their endeavours to meet these minimum standards in
adhere to the minimum standards outlined relation to environmental and social matters and associated
in our E&S Framework, to the extent that risk management.
they are applicable to them. Where we become aware that a Client or Supplier does not
adhere to applicable standards, we work with them to inform
We are aware that some Clients and Suppliers will not meet them about our minimum standards and if necessary agree
all of these expectations all of the time. This may be due to on a specific, time-bound action plan to address any issues or
operational issues outside of their control, or due to changes we risks. If a Client or Supplier is unable or unwilling to meet our
have made where they need time to implement – for example, minimum standards, we may choose to end the relationship
when we require our Clients and Suppliers to become a subject to contractual obligations.
member of an industry body or gain certain certifications.
Climate change
Climate change is a source of both (100 per cent target already achieved • provide no project finance to new or
strategic financial and non-financial risks for our Australian power needs); expanded Thermal Coal Mines, nor to
for the Group and has the potential to • increasing on-site renewable energy new coal-fired power plants;
impact the long term financial wellbeing (solar PV) generation capacity to • reduce our existing project finance
of Australia. The physical and transitional 2MW by 2025; exposure to Thermal Coal Mines and
consequences of climate change have the coal-fired power plants to zero by 2030;
• where possible, leasing new main
potential to disrupt business activities,
commercial office spaces, and designing • only provide project finance for new
affect the value of assets, and affect
and building new retail branches with or expanded oil or gas projects or
our customers’ ability to repay loans.
a minimum 5 star Green Star ratings; Metallurgical Coal Mines 1 after an
We are addressing climate change by: • maintaining operational performance assessment of the environmental,
• reducing our own operational footprint; of all main commercial spaces to a social and economic impacts of such
minimum weighted average of 4.5 stars activity, and if in line with the goals
• better understanding the impacts of the Paris Agreement;
of climate change on the Bank; as predefined by NABERS Tenancy
Energy or international equivalent; • only provide corporate or trade finance
• seeking to increase the resilience to new oil and/or gas producing,
of our business to climate risks; • transitioning over time to hybrid and
metallurgical coal mining or coal-fired
battery powered business-related
• supporting our customers and power generation Clients 2 who have
motor vehicles; and
people in the transition to a low publicly committed to the goals of
carbon economy; and; • monitoring and reducing Supply Chain the Paris Agreement, and after an
emissions aligned to our Scope 3 assessment of the environmental,
• pursuing opportunities created
emissions reduction target. social and economic impacts;
by climate change.
Offsetting residual emissions to • not provide corporate or trade finance
We are committed to playing our
be carbon neutral using the Australian to new Clients who derive 25% or
part in limiting climate change in
Government certified Climate Active more of their revenue from the sale
line with the goals of the Paris Agreement
carbon neutral standard and equivalent of thermal coal;
and supporting the responsible global
international systems; • reduce our corporate and trade
transition to net zero emissions by 2050.
• Where carbon offsets, are required, finance exposure to existing Clients
We do this by: we will, where possible, prioritise who derive 25% or more of their
Reducing our operational footprint the use of domestic carbon units revenue from the sale of thermal
by investing in technologies and (for example, Australian carbon units coal to zero by 2030 3; and
practices that enable us to achieve for emissions generated in Australia). • only offer corporate or trade finance
our Scope 1, 2 and 3 emissions to existing oil and/or gas producing,
Supporting the transition to a net
reduction targets. For example: metallurgical coal mining or coal-fired
zero emissions economy. For example,
• sourcing renewable electricity subject to Australia having a secure power generation Clients 4 after an
equivalent to 100 per cent of energy platform, we will: assessment of the environmental,
our power needs globally by 2030 social and economic impacts. From
in line with our RE100 commitments 2025, we will expect these Clients to
have published Transition Plans.
1 Applies to project finance to Clients involving (a) a greenfield oil, gas or metallurgical coal extractive activity; or (b) a brownfield expansion of an oil, gas or metallurgical coal
extractive activity.
2 Applies to new Clients who derive 25% or more of their revenue from the sale of metallurgical coal, oil or gas, or for coal fired power generation, 25% of generation is from coal.
3 We will continue to provide rehabilitation bonds for these existing Clients to ensure their responsibilities with exiting mine sites are fulfilled.
4 Applies to existing Clients who derive 25% or more of their revenue from the sale of metallurgical coal, oil or gas, or for coal fired power generation, 25% of generation is from coal.7
2021 ENVIRONMENTAL & SOCIAL FRAMEWORK
COMMONWEALTH BANK
We will track our progress over time, We also seek to better understand and Balancing transparency
including by: improve the resilience of our business
• publishing and providing updates to climate change risks as disclosed in with stakeholder
against a sustainability funding target; our climate disclosures, including by: confidentiality
• targeting an overall average emissions • periodically conducting climate
We are committed to reporting
intensity decrease of our business change scenario analysis to better
on our environmental and social
lending portfolio; and understand the risks and opportunities
progress and performance in an
at Group and portfolio level;
• aiming to implement ‘glidepaths’ for open, timely, and transparent way.
four emissions-intensive priority sectors • continuing to enhance the However, we take our confidentiality
(thermal coal mining, upstream oil, measurement, management and and privacy duties seriously.
upstream gas, and power generation) reporting of our climate risk exposures
across the Group; and The relationship between the
to inform our portfolio level lending
Bank and our potential, existing,
decisions with a view to publishing • ongoing strengthening and integration
or past customers and other
those glidepaths, once implemented, of climate risk management into
external parties is confidential,
in the FY22 Annual Report. business practices and procedures.
and our practice is not to comment
on or name any such relationships.
Human Rights
Respect for human rights underpins • requiring that employees attest to • protecting the privacy of those
the way we do business. These human and undertake mandatory training individuals whose personal information
rights are set out in the International on our Code of Conduct. we collect and handle, in accordance
Bill of Human Rights and International with our Group Privacy Policy.
Labour Organisation Declaration on We respect human rights in
Fundamental Principles and Rights at our business relationships in the We respect the rights of Indigenous
Work, and at a minimum, we abide by following ways: peoples in the following ways:
the human rights-related laws of the • where reasonably practicable we • we acknowledge the traditional
countries where we operate. work to assess and address the risks owners of the lands across Australia.
of modern slavery in our business We are committed to recognising and
We support the United Nations Guiding
operations, Supply Chains and managing the impacts of our operations
Principles on Business and Human Rights,
Financing decisions, as reported in our on Aboriginal and Torres Strait Islander
and we continue to work to implement
annual Modern Slavery Statement; and peoples and communities;
these across the Group. According to
these principles, governments have • we engage with our Suppliers rated • we support free, prior and informed
a duty to protect human rights; our high risk for modern slavery to assess consent for applicable project finance,
responsibility is to respect human rights. and address the risks of modern as outlined by the Equator Principles,
slavery in their operations. for Indigenous communities impacted
We respect human rights and seek by project decisions or actions that
to manage the risks of human rights We expect our Clients, Suppliers and
could affect their land, territory, and
abuses through our direct operations other business partners to identify,
natural resources; and
and business relationships in the manage, monitor, and redress any
following ways. adverse impacts on human rights • we promote the rights of Indigenous
where their business is involved. peoples through the commitments
We respect the human rights of our outlined in our Reconciliation Action
employees, contractors, customers, We respect the human rights of Plan (RAP), and we provide updates
secondees, visitors and volunteers by: customers and communities by: on our progress against our RAP.
• operating a workplace that is open, • treating all customers, existing
fair, inclusive and respectful of Our RAP works to focus on:
and potential, fairly, in line with our
fundamental human rights regardless Code of Conduct and the Banking • creating employment opportunities
of age, gender, sexual orientation, Code of Practice; for Aboriginal and Torres Strait
culture, race, ability, religion or beliefs; Islander peoples;
• taking steps to support customers
• providing customers, suppliers and and communities in times of hardship, • creating opportunities for
employees with access to mechanisms for example, during prolonged illness Indigenous‑owned suppliers
through which grievances and or injury; through targeted initiatives; and
complaints may be raised; • developing our peoples’ Indigenous
• assisting customers in vulnerable
• providing a safe and healthy cultural capability.
circumstances, for example,
workplace which promotes physical, those experiencing financial abuse
mental and financial well-being; If we become aware that any
or those who have fallen victim Clients are identified as operating
• supporting freedom of association to a scam or fraud; outside the law, or do not meet our
for Group employees choosing to
• providing banking services requirements, we will engage with
join trade unions; and
that are accessible; and those clients and, if appropriate,
may exit the banking relationship.8
Areas of focus (continued)
Biodiversity
Biodiversity underpins the wellbeing of We will not knowingly provide Finance to We continually reduce the
our communities and the environment, Clients operating in World Heritage sites environmental impact of our
and we recognise the risks associated that will or are likely to have a material Australia‑based operations, by:
with the degradation of ecosystems adverse effect on the Outstanding • increasing our waste recycling rate
and natural resources. We respect the Universal Value of those sites. in commercial office spaces; and
intrinsic, cultural, aesthetic, religious
We will not knowingly provide Finance • reducing the water consumption of
and economic value that biodiversity
to new Clients whose primary focus is: our retail branches and commercial
provides through healthy ecosystems.
• the mining, exploration, expansion, offices over time.
We are committed to conserving, or development of oil sands; or
protecting and, where possible, We recognise the challenges
improving existing biodiversity through • extraction, exploration, expansion that biodiversity loss and water
our business processes and working or development of oil and gas projects scarcity presents; we consider these
with Clients, communities and Suppliers in the Arctic and Antarctica. impacts as part of the environmental,
in the following ways. social, and economic assessment of
We will not knowingly provide Finance
Large Transactions.
We are committed to complying with, to Clients who are engaged in the
or exceeding, the requirements of international trade in specimens of wild
environmental legislation relevant animals and plants that may threaten
in all areas in which we operate. their survival and are in breach of CITES.
Agriculture, fisheries and forestry
We support the adoption of • involved in projects or activities We will not knowingly provide
sustainable practices in the agriculture, associated with logging to not be Finance to Clients involved in the
fisheries, and forestry industries. involved, either directly or indirectly, following areas of environmental
in any illegal production or trade and social concern:
For Large Transactions, we expect
of any timber-based products, • operating fur farms from
our Clients:
particularly Old Growth Forests. endangered species, or the trade
• who are growers, producers, and/
We will continue to reduce our exposure and manufacturing of fur products
or processors of palm oil, soybean
to upstream tobacco growers and from endangered species;
and timber to gain industry-
relevant sustainability certification, processors, and downstream tobacco • destructive fishing practices including
or equivalent standards, to leaf traders and product manufacturers. the use of poison and explosives;
demonstrate chain of custody; We also support animal welfare • shark finning; or
• who are growers, producers, and/ in the following ways. • commercial whaling.
or processors of beef, cacao, coffee, We expect our Clients to:
cotton, and rubber, or involved in the
• comply with the current legislative
catching and/or primary processing
provisions of the jurisdictions in which
of fish to be able to demonstrate
they operate; and
how they manage sustainability
considerations in their business • manage animal welfare considerations
activities; and in their business activities.
Defence
We recognise the right of countries to We will not knowingly support, invest in, • nuclear weapons outside NATO
defend themselves and protect their or provide financial services to Clients country government-controlled
national security, and we acknowledge the that buy, sell, manufacture or store: programs that are authorised under
potential irresponsible end-use of defence • Controversial Weapons banned under the Nuclear Non-Proliferation Treaty.
equipment is a key issue in this sector. international agreements to which
Australia is a party; or9
2021 ENVIRONMENTAL & SOCIAL FRAMEWORK
COMMONWEALTH BANK
Definitions
BU/SUs Large Transaction Supplier
Business Units/Support Units. Finance transaction with a value A person, organisation or entity
of $30 million or more. that provides goods or services
CITES to the Group directly.
Convention on International Trade Metallurgical Coal Mines
in Endangered Species of Wild Fauna Coal mines from which the majority Supply Chain
and Flora. of coal (by tonnes) extracted is The products and services
metallurgical coal. (including labour) that contribute to
Controversial Weapons the Group’s own products and services.
Weapons banned under international Modern Slavery Statement This includes products and services
agreements ratified by Australia. Statement provided under the sourced domestically or internationally.
These include but are not limited to: Australian Modern Slavery Act 2018.
Thermal Coal Mines
• nuclear weapons (except as
authorised under the Nuclear
NABERS Coal mines from which the majority of
Non‑Proliferation Treaty); National Australia Built Environment coal (by tonnes) extracted is thermal coal.
Rating System.
• biological weapons; Transition Plan
• chemical weapons; NATO A plan that contains, at a minimum,
• non-detectable fragment North Atlantic Treaty Organization. a time-bound decarbonisation plan
producing weapons; which is consistent with the goals
• blinding laser weapons; Old Growth Forests of the Paris Agreement.
• anti-personnel land mines; Ecologically mature forests (also known
as ‘virgin forests’) where the effects of Values
• cluster munitions; human disturbances are negligible. Values that the Group stands for and
• incendiary weapons; and uses to guide its decisions. These are:
• depleted uranium ammunition. Outstanding Universal Value Care, Courage, Commitment.
The values of a World heritage site as
This document may be subject
Client set out in a statement of outstanding
to change from time to time at
A customer who is relationship universal value approved by the World Commonwealth Bank’s discretion.
managed by the Group’s Institutional Heritage Committee.
or Business Bank with financing
transactions $5 million or greater. Scope 1, 2 and 3
Scope 1 greenhouse gas emissions are
Finance/Financing the emissions released to the atmosphere
The provision of direct corporate as a direct result of an activity, or series
lending, project finance or trade of activities at a facility level.
finance to a Client. It does not include Scope 2 greenhouse gas emissions
such things as the Bank providing are the emissions released to the
more general transactional banking atmosphere from the indirect
services or activities. consumption of an energy commodity.
International Bill Scope 3 emissions are indirect
of Human Rights greenhouse gas emissions other than
Includes: scope 2 emissions that are generated
in the wider economy. They occur as
• Universal Declaration of Human Rights;
a consequence of the activities of a
• International Covenant on Economic, facility, but from sources not owned
Social and Cultural Rights; and or controlled by that facility’s business.
• International Covenant on Civil
and Political Rights and its two
Optional Protocols.You can also read
