19 February 2013 – Westpac last night (Monday) launched a dramatic new sustainability strategy it says will be worth $8 billion over the next five years, doubling its investments in clean technology, environmental services and including $2 billion for social and affordable housing.
The announcement signals that for corporate Australia, sustainability is now firmly back on the agenda, after slipping from the radar last year.
The package will include lending and investment for renewable energy, energy efficiency, green buildings, waste, water, carbon farming and sustainable forestry activities and land rehabilitation.
“For an activity to be deemed ‘green’ it must be over and above business as usual in the relevant industry and produce an environmental outcome,” a Westpac spokeswoman clarified on Tuesday.
The social and affordable housing component includes lending to providers and operators of social affordable housing.
Westpac group executive Christine Parker said the bank wanted to set big targets and “raise awareness of these issues and challenge everybody to do more”.
“We have been working towards our sustainability goals over the past 15 years and I’m proud of what we’ve achieved,” Ms Parker said.
“We want to do more than simply sustain the status quo; we want to create a better future.
“Our new strategic focus is to anticipate and shape the most pressing emerging issues where we have the skills and experience to make a meaningful difference.
“We believe that the world is changing and that people need to think differently. As one of the strongest and largest companies in our region we have an opportunity to lead the debate. However, we want to respond in a way that benefits not only our business, but our customers and the wider community.”
As one of Australia’s most important corporates, Westpac’s announcement will be a strong wake-up call to laggards that fell prey to the backlash on sustainability in the recent year or so, motivated in part by the GFC and perhaps more so by the political backlash on climate change.
It adds to optimism that the pendulum has started to swing again. Last week was another sign. Mirvac, one of Australia’s leading real estate investment trusts, announced it was bucking the trend to not replace departing heads of sustainability.
Under the stewardship of new chief executive and managing director, Susan Llyod-Hurwitz, Mirvac appointed high profile sustainability professional Paul Edwards to group general manager, sustainability. Mr Edwards was previously held HoS roles for the UK Hammerson group and for Lend Lease in Australia.
The move also puts to rest mounting concerns that leaders such as Westpac, which announced an ambitious sustainability strategy 15 years ago, has softened its commitment.
HoS Alison Ewing told The Fifth Estate on Tuesday morning that this was not the case.
“I certainly don’t think we let it go,” Ms Ewing said.
“What we focused on was the embedding of the policy into the business and some of this tricky policy stuff is not so easy to put into a press release or to talk about at an event.”
Ms Ewing admitted that for many corporates the GFC had been a distraction but in Westpac’s case she said there had remained a strong commitment in terms of carbon and the bank had been “quite vocal” in this regard in recent years.
Westpac outlined three areas specifically targeted in the new strategy:
Demographic and cultural change
Demographic change is a key social and economic challenge facing Australia with 25 per cent of the population forecast to be over 65 by 2050. With a specific focus on workforce participation, Westpac will increase flexible work practices to help people stay in the workforce longer and find and develop employees of the future from groups that are currently under-represented in the workplace.
Economic solutions for environmental challenges?
Whilst the environment and the economy are often seen at odds, Westpac’s focus will be on providing innovative solutions to help customers manage environmental outcome issues, and specific support for the CleanTech and environmental services sector.
The changing financial landscape
Long-established assumptions for personal wealth creation have changed as a result of the flattening housing market and a more volatile stock market. Westpac will identify new paths of wealth creation, which are less dependent on debt, and educate people about these changes, supported by new products and advice models.
Program highlights include:
- Making $6 billion dollars available for lending and investment to the CleanTech and environmental services sector.
- Become carbon neutral over the life of the strategy and continue to drive improvement in Westpac’s environment footprint.
- Provide access to basic and affordable banking to an additional 300,000 Pacific Islanders, with the aspiration that 50 per cent of these will be women.
- Make $2 billion available in lending and investment to help people gain access to social and affordable housing. [Westpac had already Westpac has already held two social and affordable housing forums that brought together over 100 delegates from government, industry regulators, not-for-profit organisations, urban planners, builders and financiers,” a Westpac spokeswoman told The Fifth Estate.]
- Championing the financial and broader wellbeing of 40+ women across Westpac and nationally.
- Increasing the average retirement age of Westpac employees. Supporting the wellbeing of employees and, in turn, giving them greater choices around extending working life, can increase individual earning potential and retirement savings by close to $220,000 (Ernst & Young, based on an average salary of $60,000 and an extension of working life by three years).
- Encourage a national discussion on the factors that shape financial wellbeing and encourage Australians to understand and more actively manage their financial wellbeing.
- Launch one product or service each year to help retail customers manage their environmental challenge.