Updated position on sustainable energy finance
16 December 2014
Westpac has published an updated position statement, which reaffirms the bank's commitment to support an economy, through its financing activities in the energy system, in a manner consistent with limiting global warming to less than two degrees above pre-industrial levels.
The updated position statement outlines the approach taken by Westpac in relation to providing finance and banking services to businesses operating in the energy system, including production, processing and transportation of fossil fuels and all forms of power generation, transmission and distribution.
These updates bring the statement into line with Westpac's overarching Climate Change and Environment Position Statement, released in September 2014, in which Westpac was the first Australian bank to publicly commit to prepare for a 'Two Degree Economy'.
It also confirms the Group's intention to actively reduce the emissions intensity of its exposure in the power generation sector over time and target involvement in transactions which support the development of the most efficient power generation solutions.
Key facts about Westpac's position on Climate Change
We were the first Australian bank to release a position statement on Climate Change (in 2008) and to publicly commit to prepare for a Two Degree Economy (2014).
- Westpac has long acknowledged climate change will have a fundamental economic and social impact on our business and the community.
- We have confirmed our commitment to operating - both directly and indirectly through our businesses and the activities we finance - in a manner consistent with supporting an economy that limits global warming to less than two degrees above pre-industrial levels.
- We will continue to evolve our frameworks, policies and position statements, linked to concrete action to ensure we are arranging, lending and investing in activities that limit global warming, based on research into the carbon intensity of our activities.
We are responsibly supporting the transition to a more sustainable, less carbon intensive economic model.
- Since 2011, we have increased the proportion of renewable energy financing in our total electricity generation portfolio from 45% to 61%.
- The emissions intensity of our portfolio has consistently been well below the emissions intensity of the National Electricity Market.
We are developing practical solutions to help customers transition to a low carbon operating environment.
- We have surpassed our 2017 target of lending $6 billion to the CleanTech and environmental services sector - achieved despite introducing more stringent criteria for what is included in this portfolio since setting the target.
- Since we set our environmental solutions targets in 2013, we have brought to market the first Australian denominated Green bond in partnership with the World Bank, introduced the Solar Shed package in New Zealand for farmers, introduced energy efficient leases (for corporate and institutional customers) and introduced interest free loans for employees to purchase solar panels or solar water systems.
We will only provide funding to projects that satisfy our environmental, social and governance criteria.
- We acknowledge that the role of banks in providing finance to organisations involved in mining and related infrastructure has attracted ongoing interest from stakeholders.
- The natural resources industry is an important contributor to Australia's economic prosperity. The transformation of the energy sector over the coming decades to become less carbon intensive presents a range of challenges and opportunities, so we need to take a balanced approach.
- We take a great deal of care to ensure that any projects we support within the natural resources sector comply with appropriate environmental controls.
- When assessing projects, we work with customers to understand and manage environment, social and governance risks. We commission independent due diligence around environmental impacts for high impact projects, and we integrate that into key transaction decisions.
- If we are not comfortable with the risk profile of a project, including environmental risks, we will not proceed with the transaction.
We are actively participating in global partnerships to advocate change.
- In September 2015, we signed the Business Coalition Statement on Climate Change, along with BHP, Wesfarmers and AGL, highlighting our support for Australia's bipartisan commitment to limit global warming; along with the .
- We are also supportive of a number of the 'We Mean Business' coalition commitments, many of which are aligned to our existing positions statements including our Climate Change position statement and action plan and out Agribusiness position statement, both released in 2014.
We have continued to increase our transparency to provide greater insight into how we are tracking.
- Last year we introduced disclosures on emissions intensity of our electricity financing, and as well as our lending to mining in Australia and NZ.
- This year we included a Group-wide mining lending profile; the emissions intensity of 42 investment options within BT Financial Group; and the total funds under management invested under ESG integration. BT Financial Group has confirmed its support for the Montreal Pledge, committing us to measure and disclose the carbon footprint of our investments annually.
We have continued to improve our own environmental footprint.
- In 2015, we met all our direct environmental footprint improvement targets.
- To complement this, we made our operations carbon neutral in FY13 - and have maintained this status since.