My final project for NYU Stern unit for Corporate Sustainability. Using CBA as my case study with publically available information, I outlined the ESG issues facing the industry, I created a materiality matrix, stakeholder map, impact and connections to the global Sustainable Development Goals (SDG) and benchmarking against others within and outside their industry. Written and submitted in May 2019.

1. Corporate Sustainability Recommendations for
Commonwealth Bank of Australia (CBA)
Prepared by
Kirsty Hollis
10 May 2019

2. COMPANY BACKGROUND
Commonwealth Bank of Australia (CBA) is Australia’s leading provider
of integrated financial services, including retail, premium, business
and institutional banking, funds management, superannuation,
insurance, investment and share-broking products and services.
CBA has been operating for over 100 years.
* Source :https://www.commbank.com.au/about-us/investors/annual-reports.html

3. AN ASSESSMENT OF THE KEY ESG ISSUES FACING
THE FINANCIAL INDUSTRY AND CBA.
ESG issues facing CBA
Environmental
¤ Beyond monitoring and reducing their emissions in
line with the Paris agreement, there are no major
Environmental issues facing CBA.
Social
¤ Security and privacy: protecting customer data
¤ Providing financial support to vulnerable groups
eg: Domestic Violence
¤ Access to and provision of affordable finance
¤ Compensating employees fairly
¤ Financial literacy for all Australians – acutely
important as society moves away from ‘notes and
coins’ to digital transactions.
Governance
¤ Managing the non-financial risks as effectively as
financial risk, to reduce loss for the customers,
company and investors
¤ Combating financial crime
¤ Ensuring there are no conflicts of interests
throughout its daily operations
ESG issues facing the financial industry
Environmental
¤ Not directly linked to the operation of a financial
institution, however lending to/investing in
businesses that don’t have environmentally
responsible practices is an indirect issue.
Social
¤ Customer security and privacy
¤ Customer transparency
¤ Responsible products
¤ Financial inclusion
¤ Community engagement
¤ Responsible supply chain management
¤ Recruiting talent
Governance
¤ Managing the legal and regulatory environment
¤ Universal risk management
¤ Managing conflicts of interests

4. STAKEHOLDER MAP
Stakeholder Type Impact Influence
Value creation
opportunities
Customers
Business Customers (from micro
to Institutional), Retail
Customers
Large impact if they are
unhappy and choose
another bank who has
stronger ESG practices
Influential mainly as a
collective based on sheer
volume
• Promoting security and
transparency so they
feel valued and safe
Shareholders &
Investors
‘Mum & Dad’ investors,
Superannuation investors, large
scale and third party investors
Will support good social
and governance practices
through their investments
Positive influence with
increased investments.
On the flip side Class
Actions at AGM’s
• Reporting on the Social
& Governance
improvements
Community
organisations
Regional and remote
communities, Customer
Advocacy groups,
Independent Community
Groups.
Providing vital services and
support to the Australian
population
With the focus more on
the customer post Royal
Commission, their
influence is increasing
• Engaging communities
early when developing
new product
innovations that support
financial wellbeing
Suppliers
Small to medium businesses.
The ‘engine-room’ of the
Australian economy
Their supply chain and ESG
practices has the potential
to +/- impact the bank
Low, however are
important in helping CBA
provide products and
services to its customers
• Develop long term
relationships and ESG
related procurement
processes
Media
Major media outlets include
Fairfax, Newscorp and 3 x TV
stations
Media sentiment is a key
driver when measuring
brand health
Highly influential when
reporting on the
behaviors and practices
• Transparency with
financial, social and
governance reporting
Government &
regulators
APRA, ASIC - Australian
Securities and Investments
Commission, RBA - Sets the
interest rates for the country
Collectively governs &
regulates the industry and
promotes financial stability
for the country
Very high. The recent
APRA findings given to
CBA has fundamentally
changed the way the
entire industry will
operate moving forward.
• Consistent engagement
• Attending & responding
to commissions and
inquiries in a timely
manner
Employees
This incorporates the branch
network and head office
employees Nationally
Vital to the success of the
operational, service and
innovation of the company
Influence ranks differently
across the organisation
depending on business
unit and position.
• Embedding ESG into
business strategy
• Innovative HR initiatives

5. MATERIALITY MATRIX
Access to &
provision of
affordable
finance (S)

6. CBA’S PERFORMANCE AND REPORTING ON THE
PRIORITY ESG ISSUES DURING FY18
¤ It was only in 2017 that CBA developed their first Climate Policy Position Statement, defining their
approach to managing the response to Climate Change. This includes a target of $15 billion for funding
low carbon projects such as renewable energy generation, energy efficiency projects and low carbon
transport by 2025 was set. The 2018 spotlight from the Annual Report does share some updates as to the
progress of this CPPS (refer to link in references page)
ENIVRO
¤ Global 100 – a steady decline in three years!
– in 2016 CBA Group ranked 4th, making it the #1Australian company and #1 bank in the world
- in 2017 CBA Group ranked 6th behind ING Group who took number one bank position
- in 2018 CBA Group ranked 24th with an overall score of 71%
- in 2019 CBA Group do not rank at all in the Global 100
Methodology: based on up to 21 key performance indicators (KPIs) covering resource management,
employee management, financial management, clean revenue and supplier performance
GENERAL
¤ Supporting the vulnerable - The CBA Domestic & Family Violence Emergency Assistance Program
launched in October 2017 and is continuing to grow due to customer need. In 2018 the bank
conducted investigations into areas such as financial vulnerability, payment frequency, elder abuse
and scams amongst others. The results are helping the Bank improve its products and services and
increasing support for vulnerable groups of people.
¤ Security and Privacy – no recent recorded data breaches with CBA customer data
¤ Financial Literacy – Established Start Smart – a free financial education program that is curriculum-
aligned and available to all students. Currently 568,000 students have completed the program.
SOCIAL
¤ The APRA report* delivered in April 2018 highlighted the shortcomings of the bank across governance,
culture and accountability frameworks. Regular public reporting on how the bank is addressing the 35
recommendations has been positive, however this is primarily due to the Enforceable Undertaking APRA
has applied alongside the $1billion add-on to CBA’s minimum capital requirement. The improvements
required include: Strengthening governance and oversight; Achieving better customer and risk
outcomes; Building a more accountable, customer-focused, and transparent culture; Taking a
proactive approach to risk.
GOVERN
* source: https://www.apra.gov.au/media-centre/media-releases/apra-releases-cba-prudential-inquiry-final-report-accepts-eu

7. BENCHMARKING AGAINST OTHER COMPANIES WITHIN THE
FINANCE INDUSTRY + ONE BEST-IN-CLASS OUTSIDE INDUSTRY.
¤ Global 100 ranking in 2019 was #8. Primarily due to its US$50 billion
green loan book, which accounts for almost one third of its total
loan book – the highest percentage for any bank*.
¤ The company’s vision and purpose implies ESG is at the core: To be the
company that provides the best experience for people and to
promote society’s development in an innovative, efficient and
sustainable way
¤ Clear an transparent with their stance on a range of ESG related
topics including: Climate, Data ethics, Deforestation, Energy,
Food speculation, Human rights, Palm oil, Remuneration etc.
¤ Independent performance quantifies its consistent focus on
sustainability including: Dow Jones Sustainability Index is 78 out of
100 in 2018; named to CDP Climate A-list in January 2019; Retains
MSCI ESG ‘A’ rating in December 2018
* source: https://www.csrhub.com/CSR_and_sustainability_information/Banco-do-Brasil-SA)
¤ There is a reason Unilever is a Green Giant… Sustainability is at the
core of it’s purpose, it believes business and society co-exist and
strives for long term benefits.
¤ It has set three big hairy audacious organisational goals the whole
company could support, these goals connect to the UN’s SDG’s

8. THREE KEY RECOMMENDATIONS - IMPORTANT FOR
AUSTRALIA'S LEADING FINANCIAL INSTITUTION AND SOCIETY
Recommendations
A firmer commitment to sustainable lending practices.
CBA is still believed to be Australia's biggest fossil fuel
lender. Therefore a firmer commitment to the date it
will cease to provide fossil fuel lending and a stronger
link to executive remuneration based on this policy
and the continued support of renewable lending.
Improve its products and services and increase support
for vulnerable groups of people.
Increasing numbers of Australians are experiencing
severe financial vulnerability and stress with elder
financial abuse, domestic violence and financial
scams on the increase. Taking the leadership position
by creating products and processes to support those
who need it most.
Turning CBA’s undisputed financial strength into better
meeting customer and community needs and
expectations
It has been reported that CBA has been hit by a total
of more than AUD$1billion in anti-money laundering
fines, customer remediation and royal commission
costs. With a past culture of financial objectives and
profits prioritised over customers, CBA has an
opportunity to take a leadership position to change
the culture by embedding CSR as core to the business
strategy and to better understand what customers and
communities need.
Execution Plan
Environment
Social
Governance
¤ Review the pathway and steps towards the
agreed Environmental targets, creating
variable executive incentives linked to key
milestones.
¤ By When: Review complete by FY20 Q2
ready to implement in FY21
¤ Moving CSR from a business function to an
organisational strategy
¤ Regular customer panels created that
provide a platform for customers voice to
be heard, with executives actively listening
¤ By When: Customer panels established in
FY19. New business strategy announced
ASX Q4 FY20.
Metrics
¤ Scope the development of a Tier 1 (Priority)
education and support package for
vulnerable groups across Australia including
associated costs, impact analysis and
proposed roll-out plan.
¤ By When: Scope delivered to CBA Board Q2
FY20

9. HOW COULD CBA TAKE A LEADERSHIP ROLE AND CREATE NEW
BUSINESS OPPORTUNITIES BY TACKLING ONE OR MORE OF THE
SUSTAINABLE DEVELOPMENT GOALS?
SDG #17. Strengthen the means of implementation and revitalise the Global Partnership for Sustainable Development
¤ Long-term investment is needed for sustainable energy, infrastructure and transport, information and
communication technology. CBA’s contribution to this could be to further invest in the partnerships that will help
achieve this and potentially enabling collaborative business models to be created such as the The Australian
Sustainable Finance Initiative.
¤ Form partnerships that help achieve SDG goal #8 which will provide the banks customers with financial wellbeing
and digital innovation but also provide economic growth. This requires consistent open and transparent
conversations with the Government, governing bodies and broader community groups.
SDG #5. Achieve gender equality and empower all women and girls
¤ Increase investment and partnerships into STEM programs for young girls. This will encourage the generations
coming through to become educated and interested in maths and finance as well as providing CBA with
improved trust and reputation scores, which lead to overall improved brand and business metrics.
¤ Provide equal paternity leave for men and women along with education and support so they can become equal
carers of children. This could also have a positive impact outside of work in shifting the current imbalance
regarding the amount of unpaid domestic work women currently carry out. (“Women spend about three times as
many hours in unpaid domestic and care work as men.” Source: SDG Report 2018)
SDG #8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent
work for all
¤ Contribute by reducing the wage gap within CBA between female and male counterparts. This will benefit the
company in terms of culture, attract great talent, as well as the benefit the broader economy. It will also increase
trust and reputation externally which in turn could lead to creating and building stronger partnerships.
¤ Consider initiatives that increase and improve the employment opportunities for those more vulnerable or
experiencing bias eg: people leaving university, mothers returning to the workforce and people 50+.
¤ Contribute to vulnerable communities who need financial assistance eg: financial support for Domestic Violence
victims and farmers experiencing drought – two huge issues that effect Australians.

10. WHY IMPLEMENTING THESE CHANGES MAKES SENSE
If the culture, the business strategy, and products and processes changed, this would not only
improve overall trust and reputation for customers and employees of CBA (which has been in
decline since 2017 - post the APRA report, ASIC fines and Royal Commission findings), it could have
profound effects on market share, improved margins, net income and return on equity.
¤ The APRA report stated that the culture of CBA in the past was to address certain shortcoming’s,
interpreted as reactive. If CBA considered elevating CSR from a business function to it’s core
purpose, the organisation has the opportunity to shift to a proactive stance and take a true
leadership position that currently no other bank in Australia is taking. This could in turn provide
significant improvements to stakeholder relationships and shareholder value.
¤ It was reassuring to read a spotlight climate report released in 2018* that CBA is strengthening
their due diligence processes, considering their range of products and services, and expanding
the coverage and depth of their climate scenario analysis. However, for CBA to take a
leadership position, their actions need to be authentic and on a larger scale reflecting a shift in
organisational behaviour, not just delivering to expectations.
¤ CBA reported that “In 2017 we became the first Australian bank to provide long term financing
for large-scale domestic renewable projects.” In isolation this is commendable but if ongoing
action and subsequent stories aren’t forthcoming, it could be perceived as tokenistic. Long-
term investment and partnerships will help support this
¤ Measuring and reporting on what matters and being transparent about this with public,
shareholders, government and regulators will lower reputational risk, encourage collaboration
and best practice including investing in vulnerable communities and education.

11. Sources
¤ https://www.commbank.com.au/about-us/investors/annual-reports.html
¤ https://www.adviservoice.com.au/source/australian-sustainable-finance-initiative/
¤ https://www.commbank.com.au/content/dam/commbank/assets/about/opportunity-initiatives/CBA-
Spotlight-article-Climate-Change-FY18.pdf
¤ https://www.marketforces.org.au/commbank-getting-out-of-coal/
¤ https://www.csrhub.com/CSR_and_sustainability_information/Banco-do-Brasil-SA
¤ https://hbr.org/2017/08/its-time-to-tie-executive-compensation-to-sustainability
¤ https://www.news.com.au/finance/business/banking/10000-cba-customers-answer-ceo-letter/news-story/
49733c44ee0963814f1f7aa6f9747476
¤ https://www.apra.gov.au/media-centre/media-releases/apra-releases-cba-prudential-inquiry-final-report-
accepts-eu
¤ https://www.commbank.com.au/guidance/newsroom/our-climate-commitment-201708.html