15 April 2019
Westpac has extended the breadth and depth of scenario analysis first undertaken in 20161 to build on our understanding of short, medium and long-term impacts of different climate change scenarios on our customers, communities and business.
The analysis covered our Australian and New Zealand businesses including an assessment of physical risks in our Australian mortgage book for the first time.
“As the first Australian bank to recognise the importance of limiting global warming to less than two degrees, we can play an important role in helping our customers and communities manage the transition to a low carbon economy,” said Philip Tapsall, Head of Sustainability Governance and Climate Change at Westpac Group.
Our 2018 climate scenario analysis reinforced our longstanding position that early action to transition the economy to net zero emissions provides the greatest opportunity for growth and reduces risks of economic disruption.
Actions we took in 2018 to support the transition to a low carbon economy:
- We were the largest financier to greenfield renewable energy projects in Australia over the 2018 financial year2. By September 2018 we committed $9.1 billion to climate solutions against our 2020 target of $10 billion;
- Enhanced lending criteria for the thermal coal and energy generation sectors as outlined in our Climate Change Position Statement were embedded in our Group Risk Appetite Statement, ensuring any lending to coal mining and generation projects meets our stringent standards;
- The emissions intensity of lending to the power generation sector continued to decline reaching 0.28 tCO2-e/ MWh, ahead of our 2020 target of 0.30 tCO2-e/MWh;
- We facilitated and issued climate bonds and other green debt instruments, achieving a strong progress of $1.7 billion towards our target of $3 billion by 2020;
- Our scope 1 & 2 emissions remained on track to meet our reduction targets of 9% by 2020 and 34% by 2030;
- We continued to benchmark our performance against a range of surveys including CDP, the Australian Council of Sustainability Investors and Dow Jones Sustainability Index, with a 44% increase in our DJSI rating for eco-efficiency performance since 2016.
Following our 2018 scenario analysis, we will continue to update our work in light of the Intergovernmental Panel on Climate Change’s report on Global Warming of 1.5°C and will release the results of this work in 2019.
2 Source: IJGlobal, by new financing commitments in FY18