ANZ now considers rising sea levels against home loans

ANZ has begun examining the impact of sea level rise and other climate impacts on housing mortgage risk, according to its CEO, Shayne Elliot.

The revelation came earlier this week, when Elliot was questioned by Greens MP Adam Bandt at an Economic Committee Hearing into the major banks.

“We’ve done actually quite a bit of work around the impact of climate change … and tried to assess our risk, if you will, about lending, and having customers in certain parts of the country,” said Elliot, who indicated that this assessment process is a recent development for the bank.

“Essentially, it’s about rising water levels… As a bank lender, that’s probably where we have the greatest risk,” continued Elliot. “Certainly, weather patterns or drought-affected areas would be part of that, but the work we’re doing at the moment is more about the rising water levels.”

When Bandt asked, “Is that something that, for future borrowing, you may take into account?”, Elliot replied, “Yes”.

Speaking later about the revelation, Bandt said the new assessment process is “a significant move by the bank”.

“Following recent statements by APRA on climate risk, ANZ’s move highlights the importance of the government and financial sector taking seriously the risks of climate change to the economy,” Bandt continued.

“When a big four bank says it might not give someone a mortgage because rising sea levels will flood their house, it’s a huge wake-up call that climate change might smash the Australian economy.”

Elliot and Bandt’s exchange can be viewed in full below.