WestPac

RATING

SECTOR

Banking

WEBSITE

CONTACT

275 Kent Street,
NSW 2000
Sydney, Australia

Tel: +61-2-9293-9270
Fax: (02) 8253 1888
E-mail: customerresponse@westpac.com.au

STOCK EXCHANGE

LISTING

  • Dow Jones Sustainability Index
  • 2020 Silver Class Sustainability Yearbook in S&P Global Sustainability
  • Member of the FTSE4 Good Index Series
  • Member of the MSCI Global ESG Leaders index with “A” score
  • Received “B” rating in the 2020 CDP for our response to climate change
  • Ranked as a member of the 2020 Bloomberg Financial Services Gender Equality Index
  • Recognised as Silver Tier Employer in the Australian Workplace Equality Index

EMPLOYEES

36,849

CHIEF SUSTAINABILITY OFFICER

Siobhan Toohill

AWARDS

  • Two White Camellia awards for Leadership Promotes Gender Equality and Education and Training 
  • Deloitte Top 200 Diversity leadership award
  • Institute of Finance Professionals New Zealand (IFINZ) Business & Institutional Banking Innovation award for providing facilities to SolarCity for residential solar power
  • Received the 2020 Advancement Award in recognition of Westpac’s autism hiring program, Tailored Talent.

CONTENT SOURCE

FURTHER READING

Report created by Sonria Willis

Westpac

SECTIONS :  Sustainability Targets    Evaluation  •  Key Points  •  Overview

Company Activity

Westpac Banking Corporation is an Australian bank and financial services provider headquartered in Sydney, Australia. Established in 1817 as the Bank of New South Wales, it acquired the Commercial Bank of Australia in 1982 before being renamed shortly afterwards. 

Westpac Banking Corp. engages in the provision of banking and financial services. It operates through the following segments: Consumer Bank, Business Bank, BT Financial Group, Westpac Institutional Bank, Westpac New Zealand and Group Businesses. 

Westpac is listed on both the Australian Securities Exchange and New Zealand Stock Exchange under the symbol WBC, and on the New York Stock Exchange under the symbol WBK.

The bank is one of Australia’s “big four” banks and is one of Australia’s first and oldest banking institutions.

Company Sustainability Activity

Westpac states it has published disclosures in line with the recommendations of the Task Force on Climate related Financial Disclosures (TCFD) since 2018 and aligns its financing strategies with the Paris Agreement.

Moreover, the bank engages in industry-wide developments through:

In early 2020, Westpac conducted preliminary analyses with Guidehouse to understand the sectoral profile of its scope 3 financed emissions. The bank identified utilities, mining and agribusiness as the three key sectors comprising the majority of its emissions. To address this, it updated its lending criteria to prioritize supporting other sectors. While it still invests in utilities, mining and agribusiness since these have been the most profitable sectors for the bank, it is looking towards prioritizing sectors that are less polluting.

In May 2020, Westpac released an updated Climate Change Position Statement and 2023 Action Plan. The updated Climate Action Plan was informed by scenario and financed emissions analysis. The bank has five core principles that guide their approach to environmental responsibility:

  • A transition to a net zero emissions economy is required by 2050.
  • Economic growth and emissions reductions are complementary goals.
  • Addressing climate change creates opportunities.
  • Climate-related risk is a financial risk.
  • Collective action, transparency and disclosure matter.

Green Finance

Westpac claims to be the largest financier to greenfeld renewable energy projects in Australia, funding 13 projects over three years with the capacity to support more than 1.2 million households. The bank entered into a $50 million, four-year sustainability-linked loan facility with Contact Energy. The loan’s incentive targets align with continual improvement in Contact Energy’s Environmental Social and Governance (ESG) performance, including assessment of its climate strategy, electricity generation mix, corporate governance and stakeholder engagement.

The bank’s wealth management business, BT, maintained its A+ rating for its sustainable investment strategy and governance through the Principles for Responsible Investment (PRI). Its BT Sustainability Framework outlines how the bank embeds sustainability and ESG considerations in its investment process and enables its members and investors to make informed choices about its products and services

For investments the group manages internally, it launched its new BT Sustainable Investment Policy. This outlines how the bank approaches sustainability when investing on behalf of customers. This year, the bank received Super Ratings’ Infinity recognition across both BT Super and BT Super for Life.

Human Rights

Westpac emphasizes its commitment to human rights. In May 2020, the group published its third Human Rights Position Statement and 2023 Action Plan. Westpac also started its ‘Speaking Up Policy’ and ‘Speaking Up’ channels with key suppliers, letting them know they may use the Speak Up reporting system and independent Whistleblower hotline to report known or suspected human rights violations. The bank is also collaborating with the Australian Banking Association to identify industry-standard red flags and typologies in high-risk industries. 

Community Involvement

Westpac has a number of community programs that support issues and causes important to its employees and board members. This year, it launched the Pro Bono Employee Action Group to bring together employees passionate about sharing their professional skills with not-for-profit organizations. 

Westpac employees contributed over 14,300 skilled volunteering hours. The group also encourages employees to volunteer in support of bushfire-affected communities, providing uncapped paid leave for emergency services volunteers and three days’ paid community volunteering leave to volunteer with community organisations. Additionally, the bank is supporting suitably qualified employees with up to two weeks’ paid volunteer leave so they can volunteer in a medical field related to COVID-19.

In 2020, around $2.74 million was donated to more than 780 charities through the bank’s Matching Gifts program, which matches employee donations to eligible Australian charities. 67 employees took part in an Australian-first pilot of Giving Circles at Work in collaboration with Good2Give and the Centre for Social Impact Swinburne. The pilot found that collective giving, where donors pool their funds and jointly decide where to donate, is a positive experience for employees and annual donations of participants increased by 43%. The group is now looking to support Giving Circles as an ongoing part of its workplace giving program.

This year, Westpac Foundation awarded $2.3 million in grants to employment-focused social enterprises and community organizations that create jobs, training and education opportunities for Australia’s most vulnerable individuals. 

Westpac Foundation also expanded its non-financial support, including working with Social Impact Hub to provide access to pro bono support, professional development, business mentoring and networks across the sector. Westpac Foundation notably partnered with the Foundation for Rural and Regional Renewal (FRRR) to award grants to 50 local community organisations in rural, regional and remote communities affected by drought, bushfires and COVID-19.

Highlights

  • Provided financial education to Australians and New Zealanders through a range of programs. Over 1 million individuals participated in financial education programs through the bank.
  • Issued over 165,000 financial assistance packages.
  • $100 million in Drought Assistance Package.
  • During Bushfires: interest-free and discounted loans, $3.8 million in emergency cash grants to customers and over $1.4 million in donations to community groups and charities.
  • COVID-19 response: 175,000 mortgage deferral packages and approximately 40,000 deferrals for businesses.
  • Established Yuri Ingkarninthi, an Indigenous Connection call centre, conducting over 18,000 customer conversations in 2020.
  • Westpac Foundation job creation grants to social enterprises helped to create over 2,000 jobs for vulnerable Australians.
  • Westpac Foundation awarded over 400 Community Grants to a total of $4.1 million and supported approximately 52,000 people.
  • Westpac Scholars Trust awarded over $12 million in educational scholarships, with 474 scholarships now awarded.
  • Many Rivers partnership supported 2,495 people with jobs, with 868 identifying as Indigenous.
  • Joined other Australian banks, insurers, super funds, investors and industry groups to form the Australian Sustainable Finance Initiative.
  • Established the Safer Children, Safer Communities Roundtable of experts in human rights, child safety, online safety and law enforcement as part of its AUSTRAC Response Plan.
  • 416 hires over the three years are Aboriginal or Torres Strait Islander.
  • Updated a range of employee leave entitlements to accommodate different groups of individuals.
  • Committed to source 100% of global electricity consumption from renewable energy sources by 2025 and joined the RE100.
  • Around 9.6% of employees participated in Westpac skill-based volunteering programs, and accessed volunteering leave.
 

Targets

  • Provide $3.5 billion new lending to climate change solutions by 2023.
  • Provide $15 billion of new lending to climate change solutions by 2030.
  • Ensure financing of the electricity sector aligns with portfolio targets of 0.23t CO2-e/MWh by 2025; and 0.18t CO2-e/MWh by 2030. 
  • Manage thermal coal mining portfolio in line with its commitment to reduce exposure to zero by 2030.
  • Source 100% of its electricity consumption through renewable sources by 2025. 
  • Reduce Scope 1 and 2 emissions by 85% by 2025 and 90% by 2030 from 2016 base year.
  • Reduce Scope 3 emissions by 35% by 2030 from 2016 base year.

Progress

  • Lending to climate change solutions totaled a cumulative amount of $10.1 billion in 2020.
  • Reduced Scope 1 and Scope 2 emissions by 27% since 2016.
  • Paper Consumption decreased from 3,304 to 1,539 from 2016 to 2020.
  • Maintained carbon neutrality in 2020.
  • 75% of electricity generation financing in renewable energies.
  • $153 million in community investment.
  • 100% top suppliers assessed under the Westpac Responsible Sourcing Program.
  • 57% of the total workforce are women.
  • 50% women in leadership.
  • Maintained carbon neutral status.
  • Contributed over $410 million to community investment over the past three years.

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

SDG 1: No Poverty

  • Around $2.74 million was donated to more than 780 charities through the bank’s Matching Gifts program.

SDG 4: Quality Education

  • Provided financial education to Australians and New Zealanders through a range of programs. Over 1 million individuals participated in financial education programs through the bank.
  • Westpac Scholars Trust awarded over $12 million in educational scholarships, with 474 scholarships now awarded.

SDG 5: Gender Equality

  • Maintained 50% women in leadership roles over the last three years.
  • 57% of the total workforce are women.

SDG 7: Affordable and Clean Energy

  • Funded 13 renewable energy projects over three years with the capacity to support more than 1.2 million households
  • Entered into a $50 million, four-year sustainability-linked loan facility with Contact Energy
  • Committed to source 100% of global electricity consumption from renewable energy sources by 2025 and joined the RE100.

SDG 10: Reduced Inequalities

  • Established Yuri Ingkarninthi, an Indigenous Connection call centre, conducting over 18,000 customer conversations in 2020.
  • Many Rivers partnership supported 2,495 people with jobs, 868 of which identified as Indigenous.
  • 416 hires over the three years are Aboriginal or Torres Strait Islander.
  • Updated a range of employee leave entitlements to accommodate different groups of individuals.

SDG 11: Sustainable Cities and Communities

  • Launched the Pro Bono Employee Action Group to bring together employees passionate about sharing their professional skills with not-for-profit organizations. 
  • Westpac employees contributed over 14,300 skilled volunteering hours. 

SDG 12: Responsible Consumption and Production

  • Westpac Foundation awarded $2.3 million in grants to employment-focused social enterprises and community organisations that create jobs, training and education opportunities for Australia’s most vulnerable individuals.
  • COVID-19 response: 175,000 mortgage deferral packages and approximately 40,000 deferrals for businesses.

SDG 13: Climate Action

  • Conducted preliminary analysis with Guidehouse to understand the sectoral profile of its scope 3 financed emissions.

Evaluation

Westpac has clearly aligned its goals with the UN SDGs as well as with the Paris Agreement. The bank’s targets are clear and attainable; however, it is sometimes unclear in its 2020 Sustainability Performance Report whether some of its ESG targets were achieved.

Nevertheless, the bank has clearly shown its commitment to sustainable practices by maintaining carbon neutrality in all operations and now sources 75% of its electricity from renewable sources.

The bank has made several notable listings such as the Dow Jones Sustainability Index. It has also received relevant and credible awards, given especially for the bank’s social impact. However, the bank does not have any relevant certificates besides the Climate Bonds Standard.

Moreover, while the bank reports relevant KPIs on its operational emissions, it lacks information about specific metrics on energy consumption and efficiency in their office buildings.

Despite its sustainability initiatives, Westpac has contributed $6.514 B in the fossil fuel industry since the adoption of the Paris Agreement. However, its investments have significantly decreased since 2018.

This report gives Westpac a rating of C.

Analyst Outlook: Neutral

External sources confirm Westpac’s commitment and diligence to sustainability and social change. Particularly, the bank has been acknowledged for its progress, considering it used to be one of Australia’s biggest investors in fossil fuels.

However, the bank cannot receive a positive outlook considering it received a $1.3 bn (AUD) fine over a money laundering scandal putting the ‘Governance’ aspect of their ESG strategy in question.

Key Points

  • Hit with $1.3bn fine over money laundering scandal
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