We manage a range of sustainability issues as part of our everyday business operations:
- Offering competitive products in key customer segments
- Customer satisfaction, engagement and advocacy
- Managing customers in financial hardship
- Fair fees and interest rates
- Responsible lending
- Financial accessibility
- Healthy OMB partnership model
- Employee engagement
- Workplace health and safety
- Workforce attraction and retention
- Diversity and inclusion
- Remuneration including link to long-term performance
Economic and financial
- Market risk
- Changes to or a deterioration in economic conditions
- Sustainability of housing prices
- Balance sheet strength
- Efficient expenditure and use of resources
- Earnings per share and dividends
Risk, compliance, governance and operations
- Credit risk
- Operational risk
- Ethics and business conduct (including risk culture)
- External fraud
- Simplifying processes and procedures
- Project pipeline delivery
- Climate change and weather events
- Environmental risk of customers we lend to
- Environmental impact of our own property, assets and operations
- Changes in technology
- Digitising operations
- Information and cyber security
- Digital disruption
- Changes in regulation and government policy
- Litigation risk
- Strategic partners
- Stakeholder engagement
- Brand and reputation
- Financial literacy of Australian population
- Community contribution
While all of these sustainability issues are important, there are key focus areas and priorities that change over time.
To determine our most important sustainability issues for our 2017 financial year we conducted a survey asking participants to rate how important a range of existing and emerging sustainability issues are to BOQ. More than fifty per cent of BOQ’s broader leadership team participated in the survey along with a range of external stakeholders which included customers, suppliers, business partners, community partners, union leaders, analysts and investors. The results were validated by BOQ’s Chief Risk Officer.
This process determined the following seven key focus areas for the year ahead:
While diversity and inclusion wasn’t identified through consultation as one of our top sustainability issues, it has been added as seventh sustainability focus area for the year ahead because of its importance to our strategy.
Each of the above links provides more information on how we manage these sustainability issues. The way we manage these has visibility at the highest level with oversight from BOQ’s Board through the Risk Committee. We monitor all of our sustainability issues on an ongoing basis, with the priority areas assessed on an annual basis.
Material business risks
Our sustainability priority areas include both material and non-material business risks, and should be considered alongside our material business risks outlined on page 16 of our 2016 Corporate Governance Statement.
Our material business risks include economic sustainability issues such as market and credit risk. Further details on the controls in place for some of these risks are also outlined on pages 95-103 of our 2016 annual report.
Our material business risks also include a number of social sustainability risks such as cyber security, compliance risk, operational risk and reputational risks. More information on how we’re managing these risks are available on page 16 of our Corporate Governance Statement and through our information security page and our ethics and business conduct page.
While not all of our sustainability focus areas are considered material business risks, they concentrate on social sustainability issues where we have the greatest impact, for example through:
We continue to manage our social sustainability issues by engaging with a number of stakeholders for ongoing feedback including regulators, customers and employees. Our sustainability framework provides more information on how we put customers at the heart of everything we do, operate with strong governance, create a place where our people love to work, engage with the communities we operate in, and responsibly manage our environmental impacts. Support we have provided for our various stakeholders over the past 12 months is also outlined in our 2016 sustainability scorecard.
In our 2016 Corporate Governance Statement we identify that we have no material exposure to environmental sustainability issues that compromise the health of the ecosystem in which we operate over the longer term. We have a limited physical footprint which includes an energy efficient head office. As a financial services provider, our primary function is gathering deposits from customers and lending to individuals and small businesses. Our lending activities are guided by an Ecological Care and Sustainability Policy which strengthens controls when lending in a range of industries that have the potential for environmental impact. As at 31 August 2016, our direct commercial lending exposure to the mining industry was less than 1% of BOQ’s total loan portfolio. You can find out more about this on our approach to sustainable lending page. You can also find out more about some of our environmentally friendly initiatives on our environment sustainability page and our 2016 sustainability scorecard.