Environmental, Social and Governance

ESG focus and stakeholder engagement

Macquarie structures its ESG approach around six focus areas considered to be material to the business. Underpinned by What We Stand For  and our Code of Conduct , these focus areas reflect the risks and opportunities identified by the business and the issues of interest to our stakeholders.

 

Defining our ESG focus

We routinely assess our focus areas through secondary research, market benchmarking, media analysis and engagement with a range of internal stakeholders across the business.

In FY2020 we conducted an extensive internal stakeholder engagement and benchmarking exercise involving representatives of Macquarie’s major business areas and functions across all regions. As a result we have made some adjustments to our focus areas to better reflect the issues that we understand are most important to our stakeholders.

We have added two new focus areas:

  • ‘Customer and client experience’
  • 'Macquarie Group Foundation’

and expanded the scope of existing areas to include:

  • ‘Information security and data privacy’ within ‘Business conduct and ethics’
  • ‘Human rights’ within ‘Environmental and social risk management’ and ‘Sustainability in direct operations’
  • ‘Talent attraction and development’ within ‘People and Workplace’.

While all these areas had already been vital elements of Macquarie’s business and were being managed on a daily basis, they had not previously been highlighted as areas of specific ESG focus in the reporting structure.

Additionally, we identified that climate change increasingly drives risks and opportunities within Macquarie as well as being of growing interest to external stakeholders. Consequently, we have moved this out of ‘Environmental and social risk management’ and ‘Environmental and social financing’ to form its own dedicated focus area.

Macquarie’s revised ESG focus areas are:

Environmental and social risks have the potential to affect our business, the environment and the communities in which we operate. Failure to manage these risks may have commercial, regulatory and reputational impacts and affect communities and other stakeholders. Identifying and addressing the environmental and social aspects of our business activities is an integral part of our risk management framework.

As a global business, we have a role to play in promoting respect for human rights in our business activities and operations. Macquarie supports fundamental human rights as set out in the Universal Declaration of Human Rights and core International Labour Organisation Conventions and manages human rights-related issues through the risk management framework.

 

In response to market opportunities and client needs, we facilitate and pursue investments, markets and products with an ESG focus. Through our business relationships we play a role in developing and promoting sustainable products and businesses across the globe.

We support our clients, providing expertise and financial capital to assist them to respond to and capitalise on ESG related opportunities including renewable energy, clean technology and social infrastructure.

Climate change presents one of the most significant challenges for society and the global economy. The financial sector has a critical role to play, alongside government, business, investors and the community to support the transition to a low-carbon and climate resilient economy. As a global financial services provider, we are committed to using our expertise in infrastructure, renewable energy, clean technology and environmental markets to connect global capital to opportunities which support this transition

Alongside the action being taken by our businesses, Macquarie supports the important work of the Task Force on Climate-related Financial Disclosures (TCFD) and is actively implementing the TCFD recommendations.

We recognise managing our operations efficiently and sustainably aligns with the expectations of our stakeholders and contributes to creating workplaces that support the health and wellbeing of our people.

We actively measure and monitor key metrics of our environmental footprint and strive for continuous improvement in our direct operations.

Macquarie’s suppliers are critical to our business success. We seek the delivery of high quality goods and services and we are committed to ensuring high standards of environmental, social and governance performance across our supply chain as set out in our Principles for Suppliers. Our human rights risk management extends to our supply chain and we have an ongoing risk-based assurance programme which involves an in-depth assessment and onsite meetings with suppliers exposed to high human rights risks based on country of operation and service category. In response to client and market expectations, we engage indigenous and minority suppliers in Australia and the Americas.

Macquarie relies on building and maintaining enduring relationships with our client across all of our businesses. In meeting the responsibilities that come with owning and managing public assets, we seek to manage our investments and managed funds’ portfolio companies for long term success for the benefit of our clients.

We are committed to ensuring that our products are marketed appropriately and that our clients are treated fairly. We have implemented policies and procedures to ensure that consumer complaints are handled in an appropriate and time efficient manner and agreements do not contain provisions that may be considered abusive or unfair. We have a Customer Advocate responsible for promoting fair and reasonable customer complaint outcomes, reviewing and assisting with determining escalated customer complaints, and providing a customer-centric voice when making recommendations to improve customer experience.

Macquarie recognises that our most important assets are our people. We recruit talented individuals and encourage them to realise their potential in an environment that values excellence, innovation and creativity. We provide a broad range of programs that reflect our What We Stand For principles and support the development and wellbeing of our staff. This ensures the business continues to meet the highest standards and serves the evolving needs of our stakeholders.

As a company that operates globally, valuing diversity in our people is fundamental to our success. Our broad range of experiences, skills and views is a key strength and critical to the delivery of a wide variety of services to our clients across the globe, as well as understanding the communities in which we operate.

As a global financial services provider we operate in a highly regulated environment. We are committed to conducting our business in accordance with all applicable laws and regulations and in a way that enhances our reputation in the market and supports local regulators in achieving their objectives. A failure to manage legal and regulatory risks can have a material impact on our clients and the markets in which we operate, and on our business and reputation.

We place a strong emphasis on ethics and our approach is integrated into how we manage our responsibilities and conduct ourselves and our business every day. The long-held foundations of our risk culture are the principles of What We Stand For – Opportunity, Accountability and Integrity. Staff are made aware that these principles are expected to form the basis of all day-to-day behaviours and actions.

The Macquarie Group Foundation (the Foundation) is the philanthropic arm of Macquarie Group. The Foundation encourages Macquarie staff to give back to the communities in which they live and work by contributing service, financial support and leadership to the community organisations they feel passionately about.

Engaging our stakeholders

Clear dialogue with our stakeholders is important to building strong relationships, maintaining trust and enhancing business performance. We regularly engage with a broad range of stakeholders including

Macquarie provides clients with asset management, finance, banking, advisory, risk and capital solutions across debt, equity and commodities.

We are organised into four operating groups, each providing specific types of financial service, with three of the four groups almost entirely focused on Macquarie’s corporate, institutional and government clients.

Our specialist teams engage with our clients through a variety of channels including one-to-one contact, video and online, knowledge-based conferences and events, and other insight-based communications.

Macquarie provides products and services to retail clients across a range of areas, including wealth management, business banking, personal banking, auto-finance lending and leasing, and specialist investment solutions.

Macquarie has a range of channels through which it engages with retail clients, including:

  • Dedicated client support teams available via phone, email, social media and, in some cases, in-branch
  • Specialist relationship managers who have a deep understanding of, and expertise in, the industries in which our clients operate
  • Industry research that enables our clients to benchmark their performance
  • Customer Advocate Office.

The Macquarie Group Foundation provides financial and pro bono support to a wide range of community organisations and programs. The Foundation has an employee-led approach to giving, supporting Macquarie staff to contribute service, financial support and leadership to community organisations they choose, in the communities where they live and work.

The Foundation’s pioneering approach to philanthropy has supported a range of innovative initiatives, including cutting-edge research, establishing awards and fellowships to encourage innovative thinking, and seed funding organisations with new ideas.

The Foundation’s grant-making is focused on supporting social and economic opportunities for young people in the communities where Macquarie staff live and operate. Through this work, the Foundation and staff provide mentoring, career development, training and support for vulnerable people around the world.

Macquarie supports democratic systems of government and believes it needs to be engaged and understand the evolving policy and regulatory environments in Australia and other jurisdictions in which we operate as these impact our business, as well as our clients’ businesses.

Ways in which Macquarie participates in policy engagement include:

  • Making submissions to inquiries and industry consultation processes where appropriate. These may be processes established by parliaments, government departments or government agencies such as regulators, and submissions may be made by Macquarie directly or as part of a broader industry group
  • Engaging with parliamentarians and policy makers through avenues such as formal meetings, speaking in public forums and appearing before parliamentary inquiries where appropriate
  • Contributing to the advocacy work done by industry groups in key markets around the world. Given the diversity of Macquarie’s business activities, we are members of industry groups representing sectors such as financial services and markets, infrastructure, energy as well as general business peak bodies.

Macquarie provides clear and open lines of communication with shareholders, analysts, investors and their advisors beyond the key events of the corporate calendar. Events include our Annual General Meeting, Results Announcements and Operational Briefings. We also engage throughout the year through domestic and international investor roadshows, seminars and conference attendance.

Our Investor Relations team oversees our shareholder engagement program and provides a direct avenue for shareholders, investors and clients to access information and engage with Macquarie.

We have a dedicated Group Procurement team delivering a programme across the group to improve procurement practices and help manage supply chain risk. The programme includes a toolkit to support business-led procurement, key category management, supplier due diligence and governance.

We ask all strategic suppliers to respond to Macquarie’s ESG questionnaire which assesses how they align to our Principles for Suppliers.

We continue to communicate our Principles for Suppliers and have an ongoing risk-based assurance programme which involves an in-depth assessment and onsite meetings with suppliers exposed to high human rights risks based on country of operation and service category.

We engage indigenous and minority suppliers in Australia and the Americas.

More information on each of the Focus Areas is available on the Environmental, Social and Governance pages of our website and in Macquarie Group’s ESG Report which can also be downloaded from the website.