APPROACH TO SUSTAINABILITY RISK MANAGEMENT
Sustainability Risk Management Framework
Westpac's Sustainability Risk Management Framework sets out our approach to managing sustainability risk. It is an integral part of Westpac's Risk Management Strategy and is supported by a number of key Group-wide and divisional policies and procedures including sensitive sector Position Statements.
Sustainability risk management is relevant across the Group, including in relation to our:
- Lending and investment decisions
- Supply chain management
The Framework is supported by the other risk class specific frameworks which outline our risk management requirements including the risk governance relationship between the Board, Board Committees and senior management and key policies for managing risk.
Sustainability risk in Lending
We seek to understand the potential for sustainability-related risks to impact on credit risk. We do so by reviewing our Risk Management Framework, Risk Management Strategy, Sustainability Risk Management Framework, risk appetite measures and policies. These inform how we integrate the criteria set out in our Position Statements. We seek to apply these criteria to our portfolio, customers and transactions as appropriate.
Escalation of risks to relevant divisional risk committees occurs in accordance with our Sustainability Risk Management Framework. If the identified risks do not meet our risk appetite then we may consider whether application of conditions will sufficiently manage the risks, or else we may decline the transaction.