APPROACH TO SUSTAINABILITY RISK MANAGEMENT
Our approach
Our Sustainability Risk Management Framework (SRMF) sets out the approach we take to managing sustainability risk. Incorporated within Westpac's Risk Management Strategy, the SRMF is underpinned by a suite of policies and procedures. The SRMF is further supported by the other risk class-specific frameworks outlining our risk management requirements, governance and the relationship between the Board, its Committees and senior management.
Our SRMF applies throughout our business, including to our:
- Lending and investment decisions
- Supply chain management
- Operations
Policies and positions
Our approach to assessing the sustainability of our activities is outlined in the following positions and are support by our credit risk management approach.
- Climate Change Position
- Climate Transition Plan (PDF 3MB)
- Natural Capital Position Statement (PDF 3MB)
- Human Rights Position Statement and Action Plan (PDF 1MB)
Our positions are supported by our Sustainability Customer Requirements (PDF 392KB), including for carbon-intensive sectors and other sectors, such as Agribusiness, Tobacco, Defence and Payday Lending.
Updates to our positions reflect our continued work to operationalise and strengthen our management of sustainability risks, including responding to evolving regulatory requirements.
How we’re taking action
Sustainability risk in lending
We seek to understand the potential for sustainability-related risks to impact our credit risk. We do so in line with our SRMF, risk appetite measures and policies. These inform how we integrate the criteria set out in our Sustainability Customer Requirements. We seek to apply these criteria to our lending as appropriate.
Escalation of risks to relevant divisional committees occurs in accordance with our SRMF. If identified risks are not consistent with our risk appetite then we may consider applying certain conditions that will sufficiently support the management of risks, or we may decline the transaction.