Independent Assurance

Net Balance  provides  independent assurance of this Annual Report. This is consistent with bankmecu’s past practice and ongoing commitment to assuring stakeholders on the quality of the Company’s data collection, transfer and reporting processes.

The report section ‘Statutory Financial Report’ is audited by external auditors KPMG in accordance with the requirements of the Corporations Act 2001, the Australian Accounting Standards and the Australian Auditing Standards.

Independent Assurance Statement 

To the Board of Directors, Executive Team of bankmecu Limited:

bankmecu Limited commissioned Net Balance Management Group Pty Ltd (Net Balance) to provide independent assurance over the responsible banking content of the 2011- 2012 Annual Report (the Report). The Report presents bankmecu’s financial and non-financial performance over the period 1 July 2011 to 30 June 2012. bankmecu was responsible for the preparation of the Report and this statement presents our opinion as independent assurance providers. Net Balance’s responsibility in performing its assurance activities is to the Board and Management of bankmecu in accordance with the terms of reference agreed with them. Other stakeholders should perform their own due diligence before taking any action as a result of this statement.

Assurance Standard and Objectives

The assurance engagement was undertaken in accordance with AccountAbility’s AA1000 (2008) Assurance Standard (AA1000AS). This standard allows for the evaluation of an organisation’s management, performance and reporting on sustainability issues. This was undertaken by evaluating the organisation’s adherence to the AA1000 AccountAbility Principles (2008) of:

Inclusivity: How does the organisation include stakeholders in developing and achieving an accountable and strategic response to corporate responsibility and sustainability?

Materiality: How does the organisation include in its reporting the material (most important) information required by its stakeholders to make informed judgements, decisions and actions?

Responsiveness: How does the organisation respond to stakeholder concerns, policies and relevant standards and adequately communicate these in its reporting?

Assurance of the accuracy and quality of selected responsible banking performance information was guided by the Australian Standard on Assurance Engagements ASAE3000 Assurance Engagements other than Audits or Review of Historical Financial Information (ASAE3000) issued by the Australian Auditing and Assurance Standards Board.

Assurance Type, Level, Scope and Limitations

Net Balance provided Type 2 moderate level of assurance over the topic responsible banking in accordance with the AA1000AS. The review of adherence to the Principles was undertaken using the criteria outlined in the AA1000 Assurance Principles Standard (2008), while assessment of the accuracy and quality of selected responsible banking performance information was guided by the ASAE3000. A third-party level check of the Report against the Global Reporting Initiative (GRI) G3.1 Guidelines was also provided.

The topics covered by this assurance engagement and the criteria used during the process included the following: 

Table 1: Responsible banking performance information selected for assurance
Performance Area Assessment Criteria Report Reference
Governance: Review of Performance Obligations against Internal and External Policy and Codes of Conduct GRI Profile Disclosures : 4.8, 4.12, 4.13  GRI Index
Economic: Climate Change Impacts GRI Indicators: EC2, EN5, EN6, EN7  GRI Index
Environment: Greenhouse Gas Emissions and Offsets GRI Indicators: EN16, EN17, EN18  GRI Index
Workplace: Training and Development GRI Indicators: LA10, FS4  GRI Index
Society: Community Investment, Financial Inclusion GRI Indicator: EC1, EC8, SO1, FS13, FS14  GRI Index
Product Responsibility: Responsible Banking, Product and Service Impact, Ethical Procurement GRI Indicator: FS1, FS2, FS6, FS7, FS8, FS9, FS11, FS12, FS16, EN26  GRI Index

The following limitations in scope are noted:

  • The scope of work did not involve assurance of financial data, other than that relating to environmental, social or broader economic performance data (as specified in Table 1) where applicable.
  • The head office was visited as part of this assurance engagement with any non-head office data being reviewed remotely.
  • Net Balance was engaged to undertake assurance over bankmecu’s disclosures in the area of ‘responsible banking’. This assurance is part of a three year program which aims to focus on one key strategic topic each year. bankmecu, as a mature reporting organisation, has decided that this focused approach to assurance will deliver the business and their stakeholders with value.

Assurance Methodology

The assurance engagement was undertaken in September 2012, and involved:

  • Interviews with the bankmecu executive team including the Managing Director, GM Development, GM Corporate Services, GM Operations and Risk, GM Lending and Personal Banking.
  • Interviews with the Coordinator–Sustainability Risk, Community Banking Consultant, Marketing Manager, Lending Manager, Coordinator – Compliance Risk, HR Consultant (Learning and Development), and the Senior Banking Integrity Officer, who are responsible for oversight of responsible banking strategies, environmental performance, occupational health and safety, community, internal audit and compliance.
  • A review of the bankmecu’s materiality determination process.
  • Interviews with key personnel responsible for collating and writing various parts of the Report to substantiate the reliability of selected claims
  • A review of Report content for any significant omissions and anomalies, particularly in relation to claims as well as trends in data.
  • Testing of selected data points and statements relating to the subject matter outlined in Table 1.
  • A Global Reporting Initiative (GRI) G3.1 application level assessment.

Our Independence

Net Balance was not responsible for preparing any part of the Report. During the period, the Net Balance Foundation completed a Social Return on Investment project to evaluate community housing initiatives and a review of integrated reporting practices in the financial sector for bankmecu. Both of these projects carried out external reviews of market practices and these project teams and the assurance team were kept separate. Net Balance confirms that we are not aware of any other issue that could impair our objectivity in relation to this assurance engagement, in accordance with our Independence Policy, a copy of which is available at

Our Competency

The bankmecu assurance engagement was carried out by an experienced team of professionals led by a Lead Sustainability Assurance Practitioner (Lead CSAP), accredited by AccountAbility in the UK. The project included personnel with expertise in environmental, social and economic performance measurement across a range of industry sectors. Net Balance is a global leader in the use of Accountability’s AA1000AS, having undertaken over 150 assurance engagements in Australia in the past six years. The project team also has demonstrated experience in the application of the ASAE3000.

Findings and Conclusions

Adherence to AA1000 Principles

bankmecu was found to have approaches in place to engage with key internal and external stakeholders on the organisation’s material issues. This year’s engagement focused on the testing of bankmecu’s inclusivity in the area of responsible banking. Senior management personnel were interviewed on topics that included responsible banking and ethical lending, financial inclusion, responsible investment, customer owned banking, and community engagement. bankmecu’s stakeholder engagement processes were found to be comprehensive and robust in terms of the frequency and methodology used to identify and engage with a range of relevant stakeholders.

Net Balance also observed the internalisation of bankmecu’s commitments to a range of stakeholder led advocacy groups that it supports under its responsible banking approach. Net Balance reviewed policies, strategies and operational plans that assist the business to respond to stakeholder feedback in the area of responsible banking. It was also observed that stakeholder feedback had informed the determination of the content of the Report.


Net Balance reviewed bankmecu’s materiality assessment process and observed that bankmecu conducted a detailed review to identify its material issues. This included a review of the findings of the Sustainability Report and Sustainability Strategy Survey, Customer Insight Survey, Staff Organisational Survey, Board Annual Risk Assessment and other stakeholder engagement activities. The process resulted in 26 material issues that were mapped against and aligned with bankmecu’s key strategic business objectives. The material issues identified through this determination process were found to reflect key issues that are currently managed across the organisation.

This year’s assurance engagement focused on the testing of bankmecu’s management of material issues related to the topic of responsible banking. bankmecu was found to have policies, strategies and management systems in place to assist the business manage their commitment to responsible banking. This included topics such as financial inclusion, community engagement, and the integration of responsible banking principles into its customer service, products and services.


Net Balance tested the responsiveness of bankmecu to the management of the selected material issues through a series of interviews with management, the review of performance management systems and supporting documentation. Net Balance was able to establish progress made by bankmecu on its commitments and obligations associated with the various global codes of practice that help bankmecu to align its approach to responsible banking. The report was also found to provide a fair and balanced account of how the organisation is responding to their responsible banking commitment.

Reliability of Performance Information

Based on the scope of the assurance process, the following was observed with regard to performance information:

  • The findings of the assurance engagement provide confidence in the systems and processes used for managing and reporting the responsible banking performance information included in the scope of this assurance engagement.
  • The level of accuracy of selected performance information was found to be acceptable.
  • Data trails selected were identifiable and traceable, and the personnel responsible were able to reliably demonstrate the origin and interpretation of data.
  • The GRI application level check found that the reporting was classified as A+ in accordance with the GRI 3.1.

Based on our assurance procedures, nothing has come to our attention that causes us to conclude that the selected responsible banking performance information has not been prepared, in all material respects, in accordance with the criteria as presented in Table 1.

The Way Forward

Overall, it is Net Balance’s opinion that nothing came to our attention to indicate that the Report was not a fair representation of bankmecu’s responsible banking performance during the reporting period.

bankmecu continues play a leadership role in embedding responsible banking principles across its operations, and shaping industry practice. To ensure bankmecu continues to improve its performance, Net Balance has provided a number of recommendations. These recommendations broadly relate to the consolidation of performance metrics across the obligations associated with the United Nations Statement by Financial Institutions on the Environment and Sustainable Development (UNEP FI), UN Global Compact (UNGC), UN Principles for Responsible Investment (UNPRI), the Global Alliance for Banking on Values, and the Mutual Banking Code of Practice. Net Balance has also provided feedback to bankmecu on improvement opportunities to assist with the continued implementation of the established responsible investment and lending policy as well as further enhancement of bankmecu’s sustainability context for its material disclosures. Further detail on these recommendations has been provided in a report to bankmecu’s Board and Management.

On behalf of the assurance team
24 September 2012
Melbourne, Australia


Kirsten Simpson, Lead CSAP (AccountAbility UK) Associate Director, Net Balance