Westpac Place

A $500 million green bond, increasing renewable energy financing to 59 per cent of the electricity portfolio and delivering the first 6 Star Green Star bank branch are among achievements noted in Westpac’s 2016 Sustainability Performance Report released this week.

“It’s clear from this report that operating sustainably is deeply embedded in our business and our culture, and I’m proud to see the progress we have made in tackling challenges and creating lasting positive impact,” Westpac chief executive Brian Hartzer said.

“Our strong track record in embracing sustainable business practices has also contributed to Westpac being named the most sustainable bank globally in the Dow Jones Sustainability Indices Review this year – the ninth time we’ve been named the sector leader in this annual review since 2002.”

Other environmental achievements included committing $6.2 billion to the cleantech sector, the introduction of a new energy efficiency financing program with Verdia, and undertaking “scenario analysis” to understand the longer term impacts on the business of limiting global warming to below 2°C.

Office recycling rates have increased to 73 per cent, just two per cent off the 2017 target; there’s been a 9.5 per cent reduction in greenhouse gas emissions across retail and commercial sites; and NZ business emissions have reduced 43 per cent since 2008.

On the social front leadership roles held by women continue to grow, at 48 per cent, up from 46 per cent last year; and employees identifying as Indigenous are now at more than four per cent.

The third prong of the report involves “better financial futures”, helping people to become more financially resilient. Actions included $1.05 billion committed to the social and affordable housing sector; the equivalent of 100 years spent by employees in Indigenous community organisations; and a further $2.25 million in funding to help establish or expand new businesses with microfinance.

A promise to better manage climate risk

Westpac has been under fire for its financing of fossil fuels, with a recent Market Forces report saying that Westpac was the worst of the big four banks in terms of ratios of lending to fossil fuels over renewables, with $11.65 lent to fossil fuel projects for each dollar lent to renewables.

The sustainability report said Westpac was responding to the move towards a below 2°C world by “actively identifying, managing and disclosing value chain risk in our lending, investments and supply chain”.

It said for emissions intensive sectors, it would apply a framework to examine “the extent to which companies’ intended pathways are compatible with a low carbon economy”.

“Where a sector is expected to grow or contract due to climate change risk, this will influence our risk assessments and business strategies. We also encourage emissions intensive customers to assess the impacts of a low carbon economy on their own businesses.”

Westpac will release a “refreshed” Climate Change and Environment Position Statement in the first half of 2017.

The Climate Institute’s John Connor is included in the report, welcoming Westpac’s “commitment to supporting the transition to an economy that limits global warming to less than two degrees”.

“We look forward to Westpac’s updated Climate Change Position Statement in 2017, which we expect to include even more ambitious clean energy targets and a clear path for Westpac in supporting the required transition towards net zero emissions,” he said.