Climate Change
Our ambition is to become a net-zero, climate resilient bank
We’re taking action now to create a better future. Climate change, in particular climate transition, is a key focus area of our Sustainability Strategy as we seek to play our role in decarbonising Australia and building resilience – for our customers and our operations. We outline our approach to help achieve our climate ambition in our Climate Transition Plan (PDF 3MB).
Our position
Climate change presents significant challenges and opportunities, already impacting our business, customers and community. We seek to play our part in addressing these impacts through our climate ambition.
We are committed to managing our business to support the goals of the Paris Agreement1:
“To hold the increase in global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit temperature increase to 1.5°C above pre-industrial levels; to increase the ability to adapt to the adverse impacts of climate change and foster climate resilience; and to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”
Over time, we aspire to transition our lending at a portfolio level to support these goals. We have set clear, quantified and science-informed targets that cover the emissions of our own operations (scope 1, 2 and upstream scope 3) and our lending portfolios (scope 3 financed emissions).
We also aim to better understand and manage the exposure and vulnerability of our operations and lending portfolios to climate change to strengthen our climate resilience.
Achieving our climate ambition depends not only on our own actions but is also highly dependent on broader economic and climate policies, and market conditions supporting the goals of the Paris Agreement.
Our principles
As we respond to a changing climate, we recognise the need for clear principles to guide our decisions and actions.
| Science-based action | We support the scientific evidence on human-induced global warming developed by the Intergovernmental Panel on Climate Change. We believe limiting global warming in line with the goals of Article 2(a) of the Paris Agreement, and achieving net-zero by 2050, can significantly reduce the risks and impacts of climate change. Solutions must be science-based. |
| Climate change creates risks and opportunities | Climate-related risks are financial risks. We are taking action now to help reduce risks and leverage opportunities for an orderly transition to net-zero that is economically rational for Westpac and our customers. An orderly transition is expected to limit disruptions leading to improved economic growth and resilience. It requires investment across the economy to decarbonise, and appropriate government policies that incentivise and support the transition. |
| Consider the interconnection between climate change, human rights and nature | The effects of climate change may threaten the natural environment and a range of internationally accepted human rights. Addressing the effects of climate change should be well planned and consider factors such as human rights and safeguarding the natural environment. |
| Systems-level thinking for collective action | A net-zero economy depends on collective action and requires all stakeholders to play their part. This collective action must be based on an understanding of how interdependent systems relate to and impact one another. |
How we’re taking action
Our Climate Transition Plan (CTP) (PDF 3MB) outlines our approach to help achieve our ambition and reflects our approach to managing climate-related risks and capitalise on climate-related opportunities for our business, customers and communities in which we operate.
The CTP covers our operations and lending and includes the actions we will undertake to help achieve our ambition. It outlines our targets, the metrics we do or intend to monitor, and the key enablers and dependencies in achieving our ambition.
Our Climate Ambition: To become a net-zero, climate resilient bank
Net-zero, climate resilient operations
Achieving our greenhouse gas (GHG) emissions reductions targets and managing operational climate resilience by:
- Maintaining our approach to reducing scope 1 and 2 emissions.
- Understanding and managing our upstream scope 3 emissions.
- Understanding and managing the physical climate vulnerability of our operations.
Our targets
- 76% reduction in scope 1, 2 absolute emissions by 2030 (2021 baseline).
- 50% reduction in upstream scope 3 absolute emissions by 2030 (2021 baseline).
Our aspirations
Maintain operational resilience to the physical impacts of climate change.
Partnering with customers to decarbonise
Taking a whole-of-portfolio view to support an economy-wide, orderly transition by:
- Engaging with customers to understand their challenges and exchange insights that help advance their transition.
- Engaging at an industry-level to promote coordinated change across the value-chain.
- Offering products and services to our customers to enable their decarbonisation.
Our targets
- 2030 scope 3 financed emissions sector targets.
- $55 billion in sustainable finance lending at 30 September 2030.
- $40 billion in sustainable bond facilitation between 1 October 2021 and 30 September 2030.
Our aspirations
Transition our lending portfolios to support the goals of the Paris Agreement1.
Supporting our customers' physical resilience
Taking a risk-based view of customer resilience to the physical impacts of climate change by:
- Understanding and exploring ways of managing physical risk drivers and impacts within our portfolio.
- Engaging with customers and communities to identify vulnerability and resilience opportunities.
- Offering products, services and insights to enable customers and communities adapt, prepare, respond and recover.
Our aspirations
Adopt a portfolio-wide view of exposure and vulnerability to physical climate risks.
Our customer requirements
Our Sustainability Customer Requirements (PDF 392KB) sets out our requirements for lending to larger business customers to support our ambition.
Our progress
Things you should know
- Article 2 of the Paris Agreement to the United Nations Framework Convention on Climate Change