AMP Limited
GovernanceGovernance
Governance body oversight and management's role
The Board of Directors (the Board) is responsible for setting and overseeing AMP's strategic direction, including climate‑related risks and opportunities, through governance structures and risk management frameworks. The Board, supported by the Board Risk and Compliance Committee (BRCC) and the Board Audit Committee (BAC), has oversight of climate‑related matters. The BAC oversees the annual sustainability reporting process which is approved by the Board. The CEO and Executive Committee (ExCo) manage and monitor AMP's climate‑related risks and opportunities through the Group Risk and Compliance Committee (GRCC), which comprises all members of the ExCo.
Governance framework diagram: AMP Limited Board (including CEO) → oversees management of AMP for shareholders, approves the strategic plan and risk appetite → Board Audit Committee (oversees climate‑related disclosures and reporting of AMP) and Board Risk and Compliance Committee (oversees climate‑related risks and opportunities of AMP) → Executive Committee (responsible, with the CEO, for executing strategic objectives and managing AMP's operations) → Group Risk and Compliance Committee (responsible for the risk management framework and managing key risks, including climate‑related risks and opportunities), supported by the Sustainability Steering Committee and Sustainability Working group.
1.1 Roles and responsibilities
The Board has ultimate responsibility for the oversight of climate‑related risks and opportunities. In accordance with the Board Charter, it is responsible for approving the following on an annual basis:
- approving AMP's risk management framework (including Risk Appetite Statement and Risk Management Strategy).
- approving AMP's approach to managing climate‑related risks and opportunities.
- approving AMP's annual Sustainability report, including climate‑related strategy.
To assist the Board in discharging its climate‑related responsibilities, the Board has delegated authority to the BAC and BRCC. The BAC oversees the effectiveness of AMP's financial reporting, audit processes, and risk management framework. This includes managing climate‑related matters such as:
- overseeing AMP's annual sustainability reporting requirements (including the Sustainability report) and recommending to the Board for approval on an annual basis.
- overseeing independent audit and assurance processes over sustainability reporting.
The BRCC is responsible for overseeing the implementation and operation of AMP's risk and compliance management framework, its risk profile and appetite, including climate‑related matters, which include:
- recommending AMP's Risk Appetite Statement and Risk Management Strategy to the Board for approval on an annual basis.
- overseeing and monitoring climate‑related risks and opportunities.
- reviewing material climate‑related targets and plans, recommending to the Board for approval, and overseeing progress towards such targets and plans (as applicable).
- approving the annual climate‑related risks and opportunities assessment each year.
1.2 Management committees
The GRCC comprising the CEO and all members of ExCo, facilitates the implementation of the risk management framework and manages key risks facing AMP, including climate‑related risks and opportunities. The GRCC discusses the climate‑related risks and opportunities assessment on an annual basis. This is then provided to the BRCC for approval. This assessment considers AMP's strategy with trade‑offs expressed through prioritising risks and opportunities using inherent and residual risk ratings, determined by their relative impact on financial and non‑financial outcomes to various stakeholder groups.
The GRCC is supported by the Sustainability Steering Committee and the Sustainability Working group. The Sustainability Steering Committee provides oversight into the process of developing and implementing climate‑related reporting in accordance with the AASB S2 requirements. This process is executed by the Sustainability Working group, which also manages cross‑functional coordination and implementation of climate‑related initiatives. The Sustainability Steering Committee reviews and provides feedback on the development of climate‑related disclosures at least on a quarterly basis, ensuring alignment with strategic objectives and regulatory expectations.
1.3 Management responsibilities
The Board delegates day‑to‑day responsibility for assessing and managing climate‑related risks and opportunities to the CEO, who is supported by a team of management executives with defined responsibilities for climate‑related matters. While operational responsibility is delegated to management, the Board retains oversight through its committees, which monitor climate‑related risks, opportunities, and progress, and provide updates to the Board as required.
| Role | Responsibilities |
|---|---|
| Chief Executive Officer | Implementation of the overall climate‑related strategies and reports to the AMP Board. |
| Chief Financial Officer | Ownership of financial results and financial reports of AMP, including climate‑related mandatory disclosures. |
| Chief People, Sustainability and Community Officer | Implementation of AMP's enterprise‑wide sustainability strategy, including ownership of AMP's voluntary ESG disclosures (i.e. Sustainability supplement). |
| Chief Risk and Legal Officer | Management of AMP's Risk Management Strategy, framework and monitoring of the Risk Appetite Statement, including climate‑related risks. |
| Chief Investment Officer | Oversees the integration of climate‑related considerations into AMP's investment strategies, ensuring that responsible investment practices are embedded across the investment function. |
1.4 Management controls and procedures
Management's oversight of climate‑related risks and opportunities is supported by controls and procedures relating to the identification of climate‑related risks and opportunities through its Risk Management Strategy and monitoring performance through regular reporting to management committees. Climate risk is identified as a key material risk within the Risk Management Strategy and is therefore considered across all internal functions. AMP's risk management system allows for documentation of climate‑related risks, the controls or mitigating actions that are in place, and the accountable owners. Management has procedures and systems in place for the data collection and measuring of greenhouse gas emissions and oversight of the communication of this information externally.
1.5 Board skills and experience
AMP is dedicated to maintaining a Board whose members collectively bring an appropriate mix of skills, commitment and diversity to support effective decision‑making on matters which include oversight of climate‑related risks and opportunities. To support this, the Board has implemented a comprehensive skills matrix which outlines the combination of skills and experience that the Board considers crucial, both at present and looking ahead. The matrix indicates the degree to which skills and experiences are currently represented among Board members to enable the Board and its committees to fulfil the responsibilities detailed in their respective charters. It is reviewed annually by the Nomination Committee and approved by the Board to ensure its ongoing suitability. It is also reviewed for alignment with AMP's strategy and periodically alongside externally facilitated Board effectiveness reviews.
Each director completes a self‑assessment by rating their expertise against the skills matrix competency areas, which, as relevant to climate reporting, assesses a director's (i) ability to understand and analyse sustainability reports, including the assessment of and responses to climate risks and opportunities, and to contribute to the oversight of the integrity of sustainability record keeping and reporting; and (ii) experience in identifying, assessing and monitoring systemic, existing and emerging financial and non‑financial risks, including environmental and social risks. Ratings are subsequently reviewed, and if required, adjusted in consultation with the Board Chair. Board training, workshops and education sessions are provided to strengthen and sustain the skills and knowledge necessary for directors to effectively discharge their duties as AMP directors.
1.6 Executive remuneration
The Remuneration Committee at AMP is responsible for recommending and overseeing executive remuneration arrangements at least annually to ensure they align with company objectives, risk considerations and regulatory requirements. Each year, the Board sets key performance objectives on the AMP scorecard aligned to key results areas, including clear goals, metrics, and targets for each purpose, which are detailed in AMP's Remuneration report as part of the annual reporting suite.
AMP's executive remuneration framework does not include direct climate‑related performance metrics. There is no linkage between executive remuneration outcomes and climate‑related risks or opportunities at this time. The Board and Remuneration Committee will continue to review and assess the measures within the remuneration framework to ensure alignment with AMP's strategic objectives and governance practices.
StrategyStrategy
Climate-related risks and opportunities
AMP takes a considered approach in identifying and assessing climate‑related risks and opportunities that could reasonably be expected to affect our prospects. This process combines qualitative, and where available, quantitative insights to understand potential impacts on AMP's business model.
Our assessment draws upon AMP's existing risk management framework and climate scenario analysis supported by input from internal stakeholders across multiple functions as well as external sources, including an external expert consulted as part of the assessment. This process involves application of management judgement and assumptions to identify climate‑related risks and opportunities that are most relevant to AMP and our stakeholders.
When defining our time horizons, we considered AMP's existing decision‑making frameworks, including those used for credit risk management as well as strategic and capital planning. This approach is consistent with how we manage risk and plan for long‑term growth.
Time horizons: Short term 0–3 years; Medium term Over 3–15 years; Long term Over 15–30 years.
Physical risk: Physical climate‑related events impacting the value of assets due to geographical location
Description: Acute (e.g. bushfire, flooding) and chronic (e.g. rising sea levels) physical risks could adversely impact the value of assets held by AMP. Time horizon: Short, Medium and Long term.
Transition risk: Emerging climate regulations and compliance obligations
Description: Government policies and regulations may impose additional costs on underlying investment assets. Additionally, failure to comply with regulations may lead to litigation and penalties, including potential penalties associated with greenwashing. Time horizon: Short, Medium and Long term.
Transition risk: Investee companies and sectors fail to adapt to clean technology disruption and decarbonisation trends
Description: There is risk from underperformance of sectors misaligned with decarbonisation and shifting investor preferences to low‑carbon technologies. Time horizon: Short, Medium and Long term.
Opportunity: Increased demand for climate‑linked products
Description: Investing in the development and offering of climate‑linked products and sustainable options on investment menus where supported by growing market demand. Time horizon: Short, Medium and Long term.
Opportunity: Diversification into climate transition and resilient assets
Description: Investing in companies and projects that support climate transition, energy efficiency, and physical climate resilience enables AMP to diversify its investment allocation while aligning with its long‑term investment objectives, ESG objectives and members' best financial interests. Time horizon: Short, Medium and Long term.
The climate‑related risks and opportunities have also been categorised by the scenario under which each is likely to cause the most significant impact: Emerging climate regulations and compliance obligations, and Investee companies and sectors fail to adapt to clean technology disruption and decarbonisation trends, are categorised under the Net zero by 2050 scenario (+1.5°C) as Transition risks. Physical climate‑related events impacting the value of assets due to geographical location is categorised under the High emissions scenario (+3°C) as a Physical risk. Increased demand for climate‑linked products and Diversification into climate transition and resilient assets are categorised under the Net zero by 2050 scenario (+1.5°C) as Opportunities.
Business model and value chain
Physical risk: Physical climate‑related events impacting the value of assets due to geographical location
Potential impact to AMP's business model: Increased credit risk and loss given default impacting AMP Bank's mortgage book due to collateral devaluation. Potential reduction in investment income and fund performance in our Australian and New Zealand wealth management businesses due to extreme weather events and chronic climate impacts affecting companies and sectors, particularly those not taking sufficient action to build resilience and adapt to climate change. Potential impact to AMP's value chain: Tighter lending policies and reduced borrowing capacity for AMP Bank customers in high‑risk regions. Heightened volatility in investment returns, particularly where assets lack sufficient resilience to withstand or adapt to physical impacts of climate change potentially impacting members in our Australian and New Zealand wealth management businesses.
Transition risk: Emerging climate regulations and compliance obligations
Potential impact to AMP's business model: Increased operational and compliance costs. Legal and financial risk from potential fines and penalties for non‑compliance. Reputational risk. Potential impact to AMP's value chain: Heightened regulatory scrutiny on climate disclosure, performance assessment and compliance. Potential impact on shareholder value if climate‑related regulatory costs or compliance obligations affect AMP's financial performance or growth outlook.
Transition risk: Investee companies and sectors fail to adapt to clean technology disruption and decarbonisation trends
Potential impact to AMP's business model: Decreased valuation of investment assets, including stranded assets. Increased operational costs to integrate sophisticated climate risk assessment tools into investment management processes. Reduction in returns from investments in companies and sectors which are not taking action to transition towards a lower‑carbon economy. Potential impact to AMP's value chain: Slow adaptation to build climate resilience or evolve sustainable investment solutions could lead to potential outflows or reduced inflows.
Opportunities: Increased demand for climate‑linked products; Diversification into climate transition and resilient assets
Potential impact to AMP: Access to new customer segments seeking sustainable and climate‑conscious financial solutions. Strengthened market position in sustainable investments. Enhanced product innovation and differentiation. Potential for enhanced returns on investments benefitting from economic growth associated with the transition to a lower‑carbon economy. Potential benefits to AMP's value chain: Potential increase in availability of climate aware opportunities to invest in assets designed to withstand climate‑related risks. Access to innovative financial solutions aligned with climate goals.
Concentration of risks and opportunities
As a financial services organisation operating primarily in the capital cities of Australia and New Zealand, AMP does not have direct operations in industry, sectors or locations that are considered highly exposed to climate‑related physical or transition risks. While our Australian and New Zealand wealth management businesses manage diversified and single sector investment portfolios on behalf of members that may have exposure to such risks through underlying investments, AMP does not own these investments and hence there is no direct impact on our financial position as the underlying assets are not recognised in AMP's balance sheet in accordance with the requirements of accounting standards. Additionally, AMP Bank does not provide business financing to industries typically associated with elevated climate risk, and therefore has limited direct exposure there. To better understand our exposure to physical climate risks in respect of the residential mortgage portfolio, we have conducted a vulnerability assessment of the portfolio using suburb‑level data to identify areas potentially exposed to climate‑related hazards.
Strategy and decision-making
Mitigation and adaptation efforts by risk/opportunity
Physical risk: Physical climate‑related events impacting the value of assets due to geographical location
Credit lending policy at AMP Bank incorporates climate change within acceptable security requirements. Any lending outside of policy requires higher delegation approval and is subject to stringent review to assess credit risk. Scenario analysis is partially integrated into the S&I strategic asset allocation process, leveraging external climate modelling criteria, incorporating considerations for physical and transition risk.
Transition risk: Emerging climate regulations and compliance obligations
Ongoing focus on compliance with climate‑related disclosure regimes, reinforcing transparency and credibility in managing regulatory risks. Strengthen ESG governance and compliance processes.
Transition risk: Investee companies and sectors fail to adapt to clean technology disruption and decarbonisation trends
Improving climate risk data and ongoing review of ESG integration into investment management processes.
Opportunities strategy implications
Monitor and review current ESG and sustainability themed investment options on a regular basis. Monitor market developments for new investment opportunities.
Implications on strategy and business model
Our business strategy includes actions which mitigate against climate (and other) risks including but not limited to:
- Partial integration of climate considerations into the S&I strategic asset allocation process and providing specialist sustainable investment offerings more broadly.
- Assessment of investments within our wealth management businesses that are likely to benefit from the energy transition.
- Restricting our business lending activity to avoid potentially high‑risk sectors.
As we continue to mature our approach to climate scenario analysis to better inform how we integrate and manage climate‑related risks across our businesses, operations and value chain, we are actively exploring ways to embed sustainability into our business model and business activities by continuing integration of ESG considerations across lending and investment offerings, strengthening sustainability governance of emerging compliance requirements and enhancing climate‑related disclosures. These actions strengthen AMP's long‑term resilience and position our business to respond to emerging regulatory expectations, stakeholder demands, and market opportunities associated with climate change.
Financial position, financial performance and cash flows
Current financial effects
AMP has undertaken an assessment of the financial implications of climate‑related risks and opportunities identified in the preceding section. Based on this assessment, climate‑related risks and opportunities have not had a material impact on AMP's financial position, financial performance, or cash flows for the current reporting period. Furthermore, we have not identified any significant risk of material adjustment to the carrying amounts of assets and liabilities in the next annual reporting period.
At this stage, AMP has presented the anticipated effects mostly on a qualitative basis informed by a selective quantitative analysis. Significant complexities within AMP's value chain requires development of additional processes, data infrastructure and third‑party arrangements, in order to undertake a more fulsome and granular quantitative analysis. AMP is currently developing such processes and requirements to enable AMP to transition into more quantitative analysis in future periods. Accordingly, our initial focus this year primarily has been on providing meaningful qualitative insights, with a view to expanding our disclosures in future periods as our processes mature.
Anticipated financial effects
Risk (physical): Physical climate‑related events impacting value of assets due to geographical location – Time horizon: Medium and long
The nature of AMP's business as a financial services organisation does not directly expose our business operations to industries, sectors or locations that are considered highly exposed to climate‑related physical risks.
Our Platforms, S&I and New Zealand Wealth Management businesses manage diversified and single sector investment portfolios on behalf of members that may have exposure to climate-related physical risks through underlying investments. AMP does not own these investments, hence the underlying assets are not recognised on our balance sheet and do not have a direct impact on our financial position. However, to understand the potential financial implications to AMP's financial performance arising from underlying investments' exposure to such risks, an analysis utilising third party datasets was undertaken on selected asset classes¹ in AMP Super Fund. The analysis indicates there is no material revenue or profit impact to AMP arising from such physical climate risks.
Our banking business does not provide business financing to potentially high‑risk industries such as energy generation, mining or agriculture, thereby limiting any direct exposure arising from those areas. To understand AMP's exposure from residential mortgages, we undertook an analysis of mortgages located in areas considered to be in the elevated climate risk zone² utilising third party datasets. For this analysis two physical risks (bushfire and flooding) were considered relevant. The analysis indicates less than 0.5% of AMP's residential mortgage book as at 31 December 2025 is located in the elevated climate risk zone. Given the immaterial exposure of the mortgage portfolio, any revenue or profit impact arising from such physical climate risks are not considered material.
¹ Asset classes selected for this analysis covers approximately 75% of AMP Super Fund's FUM (funds under management) of $56.8 billion as at 31 December 2024. Asset classes not included primarily consist of investments in private markets, cash and term deposits and government bonds. For the avoidance of doubt, this analysis does not include the Wealth Personal Superannuation and Pension Fund. ² For the purpose of this analysis, the elevated climate risk zone identified by AMP included approximately 100 suburbs across Australia. These suburbs were selected based on our analysis of third party datasets. The impact identified reflects AMP's exposure within this zone, which is limited to a subset of these suburbs.
Risk (transition): Emerging climate regulations and compliance obligations – Time horizon: Short and medium
The impacts from these risks are expected to evolve as regulatory frameworks mature and become more defined. Based on the current estimation, the impact, without consideration of mitigating actions, includes elevated provisioning and compliance costs driven by policy changes. Additionally, increased capital and operational expenditure to meet regulatory requirements could result in higher costs, although these will be aimed at enhancing long‑term resilience and regulatory alignment. AMP's enhanced focus on regulatory compliance, and continuing monitoring of changes in the regulatory landscape for future compliance obligations are expected to mitigate any potential material impact. On current assessment, impact from these risks is not expected to be material.
Risk (transition): Investee companies and sectors fail to adapt to clean technology disruption and decarbonisation trends – Time horizon: Medium and long
In the medium to long term, AMP could be exposed to reduced returns as carbon‑intensive assets underperform in response to accelerating clean technology adoption and decarbonisation policies. The risk of stranded assets could potentially increase, leading to portfolio devaluation and lower overall returns if investment strategies do not adapt to these structural market shifts. AMP's ongoing review and monitoring of ESG‑ and sustainability‑themed investment options as well as continuing integration of sustainability inputs into investment management processes are expected to mitigate any potential material impact. On current assessment, impact from this risk is not expected to be material.
Opportunity: Increased demand for climate‑linked products – Time horizon: Medium
Growing demand for climate‑linked products could support revenue growth through offering sustainability themed investment options/products, resulting in improved customer acquisition and retention. Over time, this opportunity could enhance AMP's market share and provide investment opportunities to strengthen portfolio resilience, supporting long‑term value creation and competitive positioning in sustainable investments.
Opportunity: Diversification into climate transition and resilient assets – Time horizon: Medium
Diversifying into assets with embedded climate mitigation or adaptation strategies–those positioned to benefit from the climate and energy transition, as well as resilient assets–can help protect and potentially enhance portfolio returns and reduce return volatility. Allocating to such assets also mitigates exposure to carbon‑intensive sectors and supports stable, long‑term value creation through increased investment in resilient industries.
Climate resilience and scenario analysis
Scenario analysis is a structured process used to explore a range of plausible future events, helping to assess the resilience of our business model in the face of climate‑related risks and opportunities. There are limitations with scenario analysis, which relies on assumptions that may or may not eventuate. Scenarios are not indications of probable outcomes and may be impacted by additional factors to the assumptions disclosed. In 2025, AMP has undertaken a climate scenario analysis using two scenarios to provide insight into the potential impact of climate change on our business under different climate futures. These scenarios were selected in alignment with the requirements of AASB S2 and the Corporations Act 2001 to capture both transition risks, arising from the global shift to a low‑carbon economy, and physical risks, resulting from the direct impacts of climate change. The selection process was informed by peer benchmarking, industry research, and input from internal stakeholders across AMP.
Our current scenario modelling has been conducted primarily on a qualitative basis, supplemented by selective quantitative analysis where appropriate. The complexity of AMP's value chain presents challenges to undertaking a fulsome and meaningful quantitative approach, highlighting the need to further develop our modelling processes, data infrastructure and external support arrangements. Efforts are currently underway to strengthen these elements to enable AMP to progressively enhance our disclosures in future reporting periods.
Scenarios used
| Net zero by 2050 scenario | High emissions scenario | |
|---|---|---|
| Scenario narrative | In line with the Paris Agreement and reflects a future where ambitious global action limits warming to 1.5°C. It assumes rapid decarbonisation, strong policy intervention, technological innovation, and significant market and consumer behaviour shifts. This scenario typically assumes rapid, concerted global efforts to reduce greenhouse gas emissions across all sectors, leading to near‑zero net emissions between 2050 and 2070. | This scenario represents a world where global mitigation efforts fall short, and greenhouse gas emissions continue to rise. This scenario assumes only the currently implemented policies are preserved, leading to high physical risks. It implies limited technological breakthroughs in decarbonisation and continued reliance on fossil fuels. |
| Scenario temperature alignment 2100 | +1.5°C | +3°C |
| Rationale for selection | This scenario envisions an orderly transition of the world economy to net zero by 2050 whereby the world embarks on a transformative journey towards a sustainable future. It envisions a rapid shift to a low‑carbon economy, driven by the collective efforts of governments, businesses, and consumers. Decarbonisation rates soar as coordinated emissions reduction actions and interventions take centre stage. As a result, this scenario could result in significant transition risks as well as some opportunities. | This scenario explores physical risks to inform understanding of the more pronounced impacts of physical climate hazards, which increase towards the end of the century. The world faces unprecedented changes in social, economic, and technological trends. Erratic development and income growth cause severe setbacks in many regions, with less socio‑economically mature nations especially affected. |
| Key data sources | NGFS: Net zero 2050; IPCC: Shared socio‑economic pathway (SSP 1‑1.9); IEA: Net zero emissions by 2050 | NGFS: Current policies; IPCC: Shared socio‑economic pathway (SSP 5‑8.5); RCP: Representative concentration pathway (RCP8.5) |
| Key scenario characteristics | Significant and rapid transformation of the economy due to the shift away from fossil fuels. Rapid emissions decline to reach net zero by 2050; fast tech adoption (renewables, electrification), medium‑high use of carbon dioxide removal technologies. Ambitious policies cause short‑term GDP impacts but foster inclusive and climate‑resilient development. | Continued emissions growth, roughly doubling by 2050 compared to 2020, under limited policies. Fossil fuel‑driven economy with slow technology transition and low carbon dioxide removal adoption. High‑growth overshadowed by severe climate disruptions and decreased labour productivity. |
| Climate‑related policies | Ambitious climate policies, including rising carbon prices, sectoral emissions budgets, mandatory energy efficiency standards (e.g. NCC 2022/2025, NatHERS 7‑star), and electrification targets. | Only current policies are maintained, with limited new mitigation measures. |
| Macroeconomic trends | This scenario models short‑term economic adjustment followed by long‑term growth driven by clean energy investment and productivity gains. | Continued economic growth but rising costs from physical climate impacts. GDP, inflation, and interest rates are modelled using the NGFS and IPCC frameworks. |
| National/regional variables | In this scenario, physical climate impacts are moderate and largely manageable, with increased but stabilised heatwaves, sea level rise, and weather variability. Based on IPCC SSP1‑1.9, global emissions peak early and decline rapidly, limiting long‑term damage to ecosystems and infrastructure. Other variables are taken from NGFS Scenarios. | This scenario reflects severe and escalating physical risks, including extreme heat, widespread drought, coastal inundation, and ecosystem collapse, consistent with IPCC SSP5‑8.5. Other variables are taken from NGFS Scenarios. |
| Energy usage and energy mix | Rapid electrification and a shift to renewables, with >98% renewable energy by 2050 and ACCU prices rising to $420/tCO2‑e. | Continued reliance on fossil fuels and slow adoption of clean energy, with incremental energy efficiency improvements. |
| Technology developments | Accelerated innovation in renewables, energy efficiency, carbon capture and storage, and digitalisation. | Limited technological progress and continued reliance on legacy infrastructure. |
Scenario-to-risk mapping and time horizons
| Scenario | Climate risk or opportunity | Impact type |
|---|---|---|
| Net zero by 2050 scenario (+1.5°C) | Emerging climate regulations and compliance obligations | Transition risk |
| Net zero by 2050 scenario (+1.5°C) | Investee companies and sectors fail to adapt to clean technology disruption and decarbonisation trends | Transition risk |
| High emissions scenario (+3°C) | Physical climate‑related events impacting the value of assets due to geographical location | Physical risk |
| Net zero by 2050 scenario (+1.5°C) | Increased demand for climate‑linked products | Opportunity |
| Net zero by 2050 scenario (+1.5°C) | Diversification into climate transition and resilient assets | Opportunity |
Climate resilience
AMP recognises the need to build resilience to climate‑related risks and continues to explore ways to embed adaptation and resilience within our strategy while continuing to identify opportunities that drive long‑term sustainability.
Climate scenario analysis helps AMP understand the possible impact of varying climate situations over short, medium and long‑term time horizons and inform consideration of appropriate future actions. As detailed in section 2.3, climate-related physical risks do not have any material revenue or profit impact on AMP over the time horizons considered. Additionally, in respect of transition risks, AMP's current policies and future planned actions are expected to mitigate any potential material impacts in future periods.
Significant areas of judgements and uncertainties considered
As part of the climate resilience assessment, AMP has used scenario analysis to evaluate key areas of uncertainty that could impact our ability to adapt and respond to the climate‑related risks and opportunities identified. The scenario analysis explored a range of plausible climate futures, including both transition and physical risk pathways. Through this process, AMP identified several significant areas of uncertainty that could influence our resilience and strategic response including areas where judgements have been applied:
- Policy and regulatory change: There is uncertainty around the timing, scope, and enforcement of climate‑related regulations, including evolving sustainability related disclosure requirements.
- Market dynamics and technology adoption: The pace of innovation and uptake of low‑emissions technologies, as well as shifts in consumer and investor expectations, could materially affect our product offerings and investment decisions.
- Physical climate impacts: There is variability in the frequency and severity of extreme weather events, which may potentially disrupt operations, asset values, and customer outcomes.
- Economic and social transitions: Broader macroeconomic impacts, including inflationary pressures, labour market shifts, other structural economic changes, and social adaptation challenges could influence AMP's operating environment and strategic priorities.
Capacity to adapt AMP's strategy and business model
Our capacity to remain resilient to climate change depends on our ability to adapt our strategy and business model to emerging challenges and priorities including climate change. This capability enables us to respond should risks and opportunities change due to shifting global actions, regulatory developments, and stakeholder expectations. AMP's approach to climate resilience includes maintaining financial flexibility to support strategic pivots, assessing the potential to redeploy or repurpose assets where appropriate, and investing in business capability to develop climate‑related mitigation, adaptation, and opportunity areas.
Financial flexibility: Our approach to capital management provides us with the financial flexibility, as and when needed, to respond to unforeseen events including climate‑related developments. This includes the ability to reallocate funding across business units, adjust investment strategies, and support financially attractive opportunities aligned with a low‑carbon economy.
Redeploying, repurposing and upgrading existing assets: As a financial services organisation, AMP does not directly own and operate physical assets in industries, sectors or locations that are considered highly exposed to climate‑related physical or transition risks. Accordingly, we do not currently anticipate a need for extensive redeployment or repurposing of assets. However, we remain prepared to reassess such actions if required.
Investment in climate‑related mitigation, adaptation and opportunities: AMP continues to invest in building capability and climate‑related initiatives that support both mitigation and adaptation. We continue to evolve our approach to managing climate risk in our banking and wealth management businesses.
Risk ManagementRisk Management
Processes for identifying, assessing and managing climate-related risks
To support risk management, AMP has a Risk Management Framework which comprises of our Strategy and Business Plans, the Risk Management Strategy, our Risk Appetite Statement, and supporting policies and practices that guide consistent risk oversight across the organisation. Climate‑related physical and transition risks are integrated within the Risk Management Framework along with other material risk types. AMP follows a holistic approach to identifying, assessing, prioritising and monitoring risks. While the framework applies enterprise‑wide, business units have a standalone Risk Management Strategy, to address regulatory requirements, which builds on the AMP framework with additional provisions as required.
The process for identifying, assessing, prioritising and monitoring climate‑related risks and opportunities is: Identification → Assessment → Prioritisation → Monitoring.
Identification
Risk and opportunity identification is the key mechanism for understanding internally generated and externally influenced factors that might impact our business. Risks and opportunities are identified through several mechanisms, including risk profiling, stress testing, scenario analysis, stakeholder engagement and horizon scanning.
The AMP Risk Taxonomy articulates the material risk types and risk statements that have an impact, whether financial or non‑financial, on AMP. This allows for a consistent way for AMP entities and functions to identify, classify and report on risks across the business. The taxonomy is regularly reviewed and updated to ensure that it remains relevant. Climate‑related risk is defined as a material risk type in the AMP Risk Taxonomy to capture the potential impacts both physical and transition risks may have on our business.
AMP has identified a long list of climate‑related risks and opportunities, informed by a range of internal and external inputs including two climate scenario analyses conducted across three time horizons.
Internal inputs considered: Value chain modelling; Materiality framework; Scenario analyses; Risk Appetite Statement; Risk Management Strategy. External inputs considered: External climate scenarios; Peer reviews; TCFD defined examples of climate‑related risks and opportunities; ASIC RG280; Consultation with external expert.
Assessment
For each identified climate‑related risk and opportunity, AMP assesses its likelihood and impact using an internally developed framework to determine a qualitative risk rating and/or to inform any potential financial exposure. Each risk is evaluated on both an inherent basis (without consideration of mitigation treatments) and then a residual basis (after application of risk treatments or associated controls).
Prioritisation
Once a risk has been identified and assessed for materiality, it is prioritised based on its residual risk rating and risk appetite set annually by the Board. The risk appetite is formally documented in the Risk Appetite Statement and reflects the level of risk AMP is willing to accept in pursuit of our strategic objectives. It is designed to align risk‑taking with AMP's business strategy, capital planning, and broader business planning.
Climate‑related opportunities are prioritised based on their potential impact, feasibility and alignment with AMP's strategic objectives. Opportunities are evaluated based on their relevance to AMP's core business operations, stakeholder interest and potential to drive long‑term value creation.
Prioritisation outcomes are reviewed and approved by the Board, ensuring governance oversight and integration into AMP's broader risk management.
Monitoring
Risks are monitored on an ongoing basis to ensure that they are managed within appetite. This includes the consideration of any emerging risks, compliance with our legal and prudential obligations, the impact of any risk events or issues and the results of controls testing. As part of the ongoing monitoring process, risks are tested under stress scenarios to assess the ability of AMP to withstand plausible yet extreme conditions. Where a risk exceeds the defined appetite, a risk response plan is implemented to bring it within acceptable levels.
Opportunities are monitored through performance tracking of current investments and continuing assessment of market trends. This approach enables AMP to identify and harness opportunities that support the achievement of its climate objectives and contribute to long‑term organisational growth.
Metrics & TargetsMetrics and Targets
Climate-related metrics
Greenhouse gas emissions
AMP seeks to minimise emissions from operational activities where practicable and offsets residual emissions by purchasing and retiring Australian Carbon Credit Units and Verified Carbon Standard offsets. Since 2013, we have offset our annual operational Scope 1 and 2 emissions, as well as Scope 3 emissions associated with business travel. We have measured our operational emissions (Scope 1 and Scope 2) per the Greenhouse Gas Protocol. Further information regarding our Scope 1 and Scope 2 greenhouse gas emissions methodology, assumptions and exclusions can be found in AMP's 2025 Greenhouse gas reporting criteria.
| Metric | Unit | 2025 |
|---|---|---|
| Scope 1 – Fuel and natural gas | tCO2‑e | 53 |
| Scope 2 – Location‑based | tCO2‑e | 1,200 |
| Scope 2 – Market‑based | tCO2‑e | 381 |
AMP has adopted the transitional relief provided under AASB S2 paragraph C4(b), which permits entities not to disclose Scope 3 greenhouse gas emissions in their first annual reporting period applying AASB S2. While this exemption applies to AMP's mandatory disclosures, AMP has voluntarily reported selected categories of Scope 3 greenhouse gas emissions in the "Managing our own operations" section of the Sustainability supplement to provide additional transparency.
AMP has adopted the transitional relief provided under AASB S2 paragraph C3, which provides an exemption from disclosing comparative information in the first annual reporting period in which it applies AASB S2.
Scope 1 and Scope 2 market‑based greenhouse gas emissions are presented post‑consideration of green energy purchased, and pre‑consideration of carbon offsets purchased and retired subsequent to the reporting period.
AMP New Zealand Wealth Management holds a contract with Ecotricity for electricity supply to its New Zealand offices where electricity consumption is matched with renewable electricity on an annualised basis. Associated emissions are measured, minimised and offset, and independently verified by Toitū Envirocare.
Physical risks
As a financial services organisation operating primarily in the capital cities of Australia and New Zealand, AMP does not have direct operations in industry, sectors or locations that are considered highly exposed to climate‑related physical or transition risks. While our Australian and New Zealand wealth management businesses manage diversified and single sector investment portfolios on behalf of members that may have exposure to such risks through underlying investments, AMP does not own these investments and hence there is no direct impact on our financial position as the underlying assets are not recognised in AMP's balance sheet in accordance with the requirements of accounting standards. Additionally, AMP Bank does not provide business financing to industries typically associated with elevated climate risk, and therefore has limited direct exposure there. To better understand our exposure to physical climate risks in respect of the residential mortgage portfolio, AMP conducted a vulnerability assessment of the portfolio using suburb‑level data to identify areas potentially exposed to climate‑related hazards. This analysis indicates less than 0.5% of AMP's residential mortgage book as at 31 December 2025 is located in the elevated climate risk zone.
Internal carbon prices
Internal carbon pricing is used within AMP's scenario analysis and in respect of our decisions on carbon offset purchases. In relation to the purchase of carbon credits to offset the unavoidable carbon emissions of AMP, the internal carbon price of $34/tCO2‑e is applied. The high emissions scenario assumes a global carbon price of $34/tCO2‑e in 2025, decreasing to $27/tCO2‑e by 2050. On the other hand, the net zero by 2050 scenario assumes a price of $34/tCO2‑e carbon price in 2025, increasing to $138/tCO2‑e by 2050.
Remuneration
AMP's executive remuneration framework does not include direct climate‑related performance metrics. There is no linkage between executive remuneration outcomes and climate‑related risks or opportunities at this time.
Climate-related targets
AMP seeks to minimise emissions from operational activities where practicable and offsets residual emissions by purchasing and retiring Australian Carbon Credit Units and Verified Carbon Standard offsets. Since 2013, we have offset our annual operational Scope 1 and 2 emissions, as well as Scope 3 emissions associated with business travel.