The La Trobe Financial difference
At La Trobe Financial, we are all connected by one cause – to help ‘others before self’. This simple value binds us to our core mission of helping clients obtain financial independence.
In operating our company and doing our jobs, we believe we are assisting in the creation of safer communities, creating direct and indirect employment and assisting many under-served customers to obtain access to finance.
Importance of Environmental, Social and Governance
By identifying and managing Environmental, Social and Governance (ESG) risk, we are able to mitigate risk and identify a range of opportunities. Our ESG risk principles align with the Group’s values and vision and provide a framework for integrating ESG risk considerations into our day-to-day decision making.
At La Trobe Financial, ESG risk is not managed as a separate risk category but rather is embedded and integrated across all risk categories to form part of our overall risk framework and culture. The Group’s Board retains ultimate oversight for ESG risks and issues.
Wherever possible, we look to reduce and offset the environmental impact of our operations through the implementation of long-term strategies.
Climate related financial disclosures
A Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board (FSB) in 2015 to develop climate-related disclosures to promote more informed investment decisions and enable stakeholders to better understand an organisation’s exposure to climate-related risks.
The Group Board recognises that now, more than ever, climate change is creating risks and opportunities for our business, our customers and our communities. While not bound by regulations, we believe that developing climate-related strategies in line with recommendations of the TFCD can govern significant risks and opportunities to build the resilience of the Group.
Outlined below is a high-level summary of the Group’s approach to climate change governance, strategy, risk management, and metrics and targets consistent with TCFD recommendations.
Climate change strategy
The Group’s climate change strategy is focused on identifying opportunities to reduce the Group’s environmental footprint, assist our staff, customers, partners, shareholders and communities to identify opportunities to reduce their environmental footprints, consider the environment in all relevant business decisions and investing in organisational capability to identify and respond to both current and future climate change risks and opportunities.
ESG risks, including climate change, are identified, measured, monitored, reported and overseen in accordance with the Group’s risk management framework. The Board Audit & Risk Committee has oversight of these risks. The Origination & Credit Committee and Audit & Risk Committee oversee ESG risks relating to the credit risk portfolio. Matters are escalated to the Group Board as required.
Metrics and targets
The Group has initially focused on metrics associated with greenhouse gas emissions and paper usage, given the nature of our operations. We expect the metrics to be expanded in the current financial year. The outcomes are as follows:
Greenhouse gases – in FY20, La Trobe Financial’s energy usage resulted in 479.5 tonnes of CO2 emissions (FY19: 468.8 tonnes). The increased emissions are due to the growth of the business and as a ratio of emissions per average FTE, this has reduced to 1.19 tonnes (FY19: 1.61 tonnes/FTE).
Paper usage – digitisation projects, coupled with the majority of staff moving to a remote working arrangement from mid-March 2020 as a result of COVID-19, has resulted in reduced gross paper usage to 116,000 prints per month, this includes 152,000 per month before COVID-19 and 45,000 per month during COVID-19 (FY19: 162,000 prints per month). As with emissions, this should be considered in the context of business growth and a 12% increase in headcount.
The Key Executives are responsible for directing the development and implementation of climate related policies, overseeing the progress, performance and reporting on climate, and leading external engagement, advocacy and assistance to customers on climate-related matters.
At La Trobe Financial, we are committed to investing in the advancement and wellbeing of our broader community through the La Trobe Financial Foundation.
The Foundation’s initiatives are an integral part of the way we do business and encompass the true spirit of our company’s philosophy of ‘others before self’.
La Trobe Financial Foundation
Since it was formed in 1978, the La Trobe Financial Foundation and has donated more than $15 million to our chosen partners.
We use our position as one of Australia’s leading diversified wealth managers to help improve the wellbeing of families and fellow Australians. Earlier this year, we donated $1 million to support bushfire relief and established a dedicated disaster relief package for our customers, our employees and firefighters. Shortly following this crisis, we donated a further $1 million to the Epworth Hospital to help fight COVID-19 and again established a comprehensive support program for our customers financially impacted by COVID-19.
La Trobe Financial staff embrace the opportunity to give back to the community. Full time employees are granted a paid leave day each year to volunteer their time and skills at a community organisation of their choice. The benefits of this program go beyond the dollar spent to nurture a spirit of community and contribution that exemplifies our philosophy of putting ‘others before self’.
Investing in the next generation
We support our exceptional young people to continue their education and personal development. Through a sponsored grant program called the La Trobe Financial Freedom Scholarship, we support the company’s young talent to advance in both their professional and personal lives. The scholarship repays the full HECS/HELP debt of up to 10 employees per year.
At La Trobe Financial, 32% of our executive leadership team are women. As we continue to grow, we will actively seek to employ the best people with the appropriate skills and experience to enhance our diversity.
To assist us with our plans, we have established a Women of La Trobe Financial program, which aims to create an empowered and diverse workplace that encourages professional and personal development through networking, mentoring and education.
The Board of La Trobe Financial operates an Audit & Risk Committee as part of its corporate governance program. With an extensive level of skill and experience, this committee provide appropriate oversight of the Group’s activities and executive committees. It plays a vital role in assisting the Board to fulfil its oversight responsibilities in areas such as financial reporting, risk management systems, internal control systems and the internal and external audit function.
La Trobe Financial has operated a governance and management committee structure for more than 30 years as part of its corporate governance program. This structure ensures that competent teams of senior officers and executives oversee all operations of the Group. The deep knowledge, skills and experience of the executive team are shared at the committee level creating a strong governance framework and embedded succession plan for each business unit within the Group.
La Trobe Financial operates five senior management committees as follows:
1. Executive Committee (ExCo) since 1987 – responsible for executing the strategy and direction, determining budgets and forecasts and our capital management strategy. ExCo also has responsibility for human resources and succession planning execution;
2. Origination & Credit Committee (OCC) since 1988 – charged with setting lending products and credit risk parameters, ensuring proficient distribution channels, reviewing impairment reporting, and setting policies for valuations, lending and collections management;
3. Markets, Funding & Rates Committee (MFR) since 1994 – responsible for Group funding, product pricing, interest rate management, liquidity management, overseeing liquidity of funding lines (including capital market issues), protecting against pricing and market risk and monitoring portfolio concentrations and facility covenant stress tests;
4. Audit & Risk Committee (ARC) since 1997 – responsible for managing group risk, maintaining AFSL and ACL licensing, the Group’s compliance plans, setting the internal audit program, reviewing engagement of external auditors, and ensuring training of staff to a requisite standard; and
5. Compliance Committee (CC) since 2002 – meets four times a year with the specific objective of ensuring adherence to the Fund’s Compliance Plan and Constitution as lodged with the Australian Securities and Investments Commission. This is supported by an audit of the Compliance Plan undertaken by the Fund’s statutory auditor, KPMG.
A number of additional sub-committees IT-Sub Co, Large Loan – Sub Co, Special Servicing – Sub Co, also meet regularly on highly focused specialised operational areas of the business.