2022 Approach to Climate Change Investor Reference Pack
ANZ 2022 Approach to Climate Change Investor Reference Pack
PROGRESS TOWARDS OUR PORTFOLIO EMISSIONS TARGET PATHWAYS - POWER GENERATION
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Financial challenges of a changing energy sector
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Wholesale electricity prices increased to record highs in parts of Australia earlier this year. Electricity companies routinely hedge the price of their
future energy generation on the ASX electricity futures market, to mitigate against price fluctuations
Due to these record high wholesale prices, companies using the electricity futures market, including some existing ANZ customers, faced unusually
high margin calls on their existing hedge contracts - requiring them to post cash collateral to margin accounts to cover these positions
We have observed similar developments internationally this year. In the UK, the 'Energy Markets Financing Scheme'¹ is designed to support viable
energy firms with major operations in the UK to deal with the unprecedented volatility triggered by Russia's invasion of Ukraine. These firms will be
able to apply for government-backed guarantees to secure commercial financing and meet large margin calls from energy price volatility
• In August 2022, the Australian Energy Market Operator² forecasted electricity reliability concerns over the next 10 years, with urgent investment in
electricity generation, storage and transmission required
• Within this context, our challenge is to finance the new green energy infrastructure required to help achieve net zero emissions, while ensuring
existing providers - which are making these investments - are supported while this new infrastructure is being built. These companies serve
important roles in the supply and stability of the energy market while the broader operating environment transitions in line with the Paris
Agreement goals
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Energy Markets Financing Scheme opens today | Bank of England
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AEMO | Critical investment needed to manage reliability gaps
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