Climate change and environmental Issues

Our commitment to action on climate change

Our ambition to become a net-zero, climate resilient bank

Climate change is a significant issue which is already impacting our business, customers and community. We seek to play our part in addressing these impacts, through our ambition to become a net-zero, climate resilient bank.

In July 2022, we joined the Net-Zero Banking Alliance (NZBA) and continued our work on reducing our operational and financed emissions and aligning our lending portfolios with net-zero financed emissions by 2050, consistent with a pathway to limit global warming to 1.5°C above pre-industrial levels by 2100.

We were a founding member of the UN's Environment Programme Finance Initiative, signed the Equator Principles in 2003 and were the first Australian bank to release a Climate Change Position Statement in 2008.

Our climate strategy is structured along three action areas that focus on our own operations, supporting customers and advocating for positive change.

We aim to deliver on our strategy through the actions and initiatives set out in our Climate Change Position Statement and Action Plan (PDF 537KB). Unless specified, we aim to implement the actions in our Action Plan by 30 September 2025. Other targets refer to Westpac Group’s financial year, e.g. 2030 targets to be achieved by 30 September 2030.

Our principles

A science-based transition to a net-zero emissions economy is required by 2050
Addressing climate change should reduce risks and create opportunities for our business and customers
Transition should be technology-driven, inclusive and safeguard our natural environment
Collective action is vital
Our approach should be transparent with thorough disclosures

Our action areas

	Our action areas	Key targets and objectives¹
1	Net-zero, climate resilient operations	Scope 1 and 2 absolute emissions reduction target of 64% by 2025 and 76% by 2030 from a 2021 baseline Source the equivalent of 100% global electricity demand from renewable sources by 2025² Transition our Australian and New Zealand fleet vehicles to 100% electric or plug-in hybrids by 2030³ Scope 3 upstream absolute emissions reduction target of 50% by 2030 from a 2021 baseline Develop our approach to assessing and managing physical climate risk to our operational sites.
2	Supporting customers’ transition to net-zero and to build their climate resilience	Align our lending portfolio with net-zero by 2050 consistent with a 1.5°C⁴ pathway in line with our NZBA commitment NZBA 2030 sector lending targets in carbon intensive sectors, as detailed in the NZBA Guidelines (NZBA priority sectors) (For further information, refer to our Action Plan (PDF 537KB)) Provide $55bn of lending and $40bn of bond facilitation activities by 2030 that are aligned with our Sustainable Finance Framework (PDF 2MB) Seek to help customers understand and better respond to the impacts of climate change to support adaptation and resilience.
3	Collaborate for impact on initiatives towards net-zero and climate resilience	Contribute to government and industry initiatives and engage on matters of climate policy.

We have developed positions on oil and gas, coal mining and power generation (summarised in our Climate Change Position Statement and Action Plan (PDF 537KB). These positions operate alongside our NZBA 2030 sector lending targets.

^{¹ For details on our key targets and objectives refer to our Action Plan (PDF 537KB).}

^{² The challenges of developing local renewable energy infrastructure and the lack of renewable energy certificate markets in some of the international markets Westpac operates in are a recognised risk to this target. We are monitoring this risk and actively seeking to solve for these challenges as we work towards meeting our commitment.}

^{³ May include hybrid or plug-in hybrid electric vehicles (PHEVs) to serve customers in locations where electric vehicle charging infrastructure is not widely available. Supply chain challenges and roll-out of charging infrastructure at a national scale are risks to this target at the time of setting. This target will be reviewed in 2025 to consider the status of these risks.}

^{⁴ A pathway to net-zero by mid-century, or sooner, including CO₂ emissions reaching net-zero at the latest by 2050, consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100.}

Our targets

In line with our NZBA commitment, we have set 2030 financed emissions targets.

Upstream oil and gas

Upstream oil and gas¹

Target: 23% reduction of scope 1, 2 and 3 absolute financed emissions by 2030 from a 2021 baseline.

_{¹ Includes exploration, extraction and drilling companies, all activities of integrated oil and gas companies (IOCs), tolling and stand-alone refineries and LNG producers. Does not include downstream retail and distribution, pipeline infrastructure, storage and transport, nor trading entities.}

Thermal coal mining

Thermal coal mining¹

Target: Zero scope 1, 2 and 3 absolute financed emissions by 2030 to companies with >5% of their revenue² coming directly from thermal coal mining.

_{¹ Covers production and sale of thermal coal, with adjacent sectors (including mining service providers) excluded. Transactional banking and rehabilitation bonds are excluded.}

_{² Annually, we calculate the revenue percentage by assessing customers’ full-year audited financial reports, based on a rolling average of the prior three years of revenues.}

Power generation

Target: 0.10 tCO₂-e/MWh for scope 1 and 2¹ by 2030.

_{¹ Refers to scope 1 and 2 emissions of power generators, i.e. customers with >10% revenue coming from power generation or >5% revenues from thermal coal electricity generation. In Australia, this applies to customers under ANZSIC (1993) code 3610 with National Greenhouse and Energy Reporting Scheme designated generation facilities and have >10% revenue coming from power generation.}

Cement production

Target: 0.57 tCO₂-e/tonne of cement for scope 1 and 2 by 2030¹.

_{¹ This target covers customers that produce clinker in-house. The target has been set for customers’ scope 1 and 2 emissions in relation to the production of cement. It covers emissions generated from calcination in clinker production as well as fuel combustion and electricity consumption associated with the cement production process.}

Iron and steel – steel production

Transport: Aviation (passenger aircraft operators)

Transport: Aviation (passenger aircraft operators¹)

Target: 76.4 gCO₂-e/passenger km² for scope 1 by 2030².

_{¹ Covers customers that operate scheduled air transport for passengers, including freight operations undertaken by passenger airline operators. We have excluded any freight only operators, rotary wing aircraft, non-scheduled aircraft operations and aircraft lessors.}

_{² Passenger kilometres (pkm) is a measure of activity for passenger airline operators.}

Agriculture

Agriculture (Australia)¹

Targets:

Dairy – 10% reduction in scope 1 land management² emissions intensity (tCO₂-e/tonne of FPCM³) by 2030 from a 2021 baseline.

Beef and sheep – 9% reduction in scope 1 land management emissions intensity (tCO₂-e/tonne of FW⁴) by 2030 from a 2021 baseline.

As part of our Agriculture targets, we are committed to no deforestation, which provides for no further conversion of natural forest⁵ to agricultural land use within farm systems from 31 December 2025 for customers in scope of the targets.

Agriculture (New Zealand)⁶

Targets:

Dairy – 10% reduction in scope 1 land management emissions intensity (tCO₂-e/tonne of FPCM) by 2030 from a 2021 baseline.

Beef and sheep – 9% reduction in scope 1 land management emissions intensity (tCO₂-e/tonne of FW) by 2030 from a 2021 baseline.

As part of our Agriculture targets, we are committed to no deforestation, which provides for no further conversion of natural forest to agricultural land use within farm systems from 31 December 2025 for customers in scope of the targets.

_{¹ Applies to institutional and commercial relationship-managed Agribusiness customers with Total Committed Exposures (TCE) $1.5m who are captured by dairy, beef, sheep and mixed farming ANZSIC codes.
² Land management emissions refers to operational emissions resulting from how land is managed rather than emissions resulting from land-use change. Land management emissions arise from processes such as enteric fermentation, biomass burning and fertiliser use.
³ Fat protein corrected milk (FPCM) is a commonly used measure of dairy farm outputs. FPCM is milk corrected for its fat and protein content to a regional standard. In the Science Based Target initiative Forest, Land and Agriculture Guidance (SBTi FLAG) reference scenario we used for setting Agriculture targets, dairy production is expressed in tonnes of FPCM.
⁴ In the SBTi FLAG tool interface animal commodities are expressed in tonnes of fresh weight (FW) of carcass where carcass is defined as animal meat, fresh, chilled or frozen, with bone.
⁵ A forest that is a natural ecosystem, possessing many or most of the characteristics of a forest native to the given site, including species composition, structure, and ecological function. Natural forests include: (i) Primary forest that have been subject to major human impacts in recent history. (ii) Regenerated forest that were subject to major impacts in the past (for instance by agriculture, livestock raising, tree plantations, or intensive logging) but where the main causes of impact have ceased or greatly diminished and the ecosystem has attained structure, function and composition of a natural forest. (iii) Managed natural forests where much of the ecosystem’s composition, structure, and ecological function exist in the presence of activities such as harvesting of timber or small-scale cultivation. (iv) Forests that have been partially degraded by anthropogenic or natural causes (e.g. harvesting, fire, climate change, invasive species, or others) but where the land has not been converted to another use and where degradation does not result in the sustained reduction of tree cover below the thresholds that define a forest or loss in structure, function or composition. The categories “natural forest” and “tree plantation” are mutually exclusive, though in some cases the distinction may be nuanced. Source: Accountability Framework Initiative. The Accountability Framework Core Principles (2023).}⁶Applies to relationship-managed Agribusiness customers with TCE ≥NZ$1m who are captured by dairy and sheep and beef farming ANZSIC codes.

Commercial Real Estate (Offices)

Target: 59% reduction in scope 1 and 2¹ emissions intensity (kgCO₂-e/m² net lettable area²) by 2030 from a 2022 baseline for Australian and New Zealand offices³.

_{¹ Base building operational scope 1 and 2 emissions. Target excludes all scope 3 emissions (e.g. tenant emissions from electricity and appliance use, construction, embodied emissions and corporate activities).
² Floor space is defined as net-lettable area (NLA). In Australia, the standard used for determining the NLA is set out in the Property Council of Australia (PCA) March 1997 Method of Measurement. In New Zealand, this is Rentable Area as set out in The Guide for the Measurement of Rentable Areas NZ.
³ Our target applies to facilities that are assigned office related ANZSIC codes, and with a TCE greater than or equal to $5m for Australian facilities or NZ$5m for New Zealand facilities. This excludes exposures associated with site finance, construction and renovation of commercial real estate assets.}

Residential Real Estate (Australia)

Residential Real Estate (Australia)¹

Target: 56% reduction in scope 1 and 2² emissions intensity (kgCO₂-e/m²) by 2030 from a 2022 baseline.

_{¹ Excludes mortgages on vacant land as well as construction and renovation loans given there are no in-use operational emissions associated with these.}

_{² Scope 1 and 2 emissions refer to in-use operational emissions from energy associated with the operation of the building, consisting of purchased electricity and natural gas consumption.}

We continue to integrate and operationalise our targets into our processes and lending decisions.

The information on this page contains ‘forward-looking statements’ and statements of expectation reflecting Westpac’s current views on future events. They are subject to change without notice and certain risks, uncertainties and assumptions which are, in many instances, beyond its control.

For more information on our sector targets, including Scope, sector boundary, target definitions and baselines, please see our Sustainability Performance Reports.

Our progress¹

Released our Climate Report, with an updated Climate Change Position Statement and Action Plan (PDF 537KB)
Continued working with customers to support their transition to a net-zero economy, as we shift our financed emissions to become net-zero by 2050, consistent with a 1.5°C pathway
Released our Sustainable Finance Framework (PDF 2MB) and set new 2030 Sustainable Finance Targets for lending and bond facilitation activities
Largest bank lender to greenfield renewable energy projects in Australia over the past five years²
The equivalent of 100% of our Australian operational electricity demand now sourced from renewables³
Reduced scope 1 and 2 emissions⁴ by 52% and our scope 3 upstream emissions^4,5 by 4% for the year (as at June 2023)
Maintained certification⁶ for direct operations in Australia since 2012 and New Zealand since 2019
Launched a carbon footprint tracker in the Westpac app for Australian retail customers to better understand their emissions
Participated in the Australian Banking Association and the Australian Sustainable Finance Institute working groups to improve industry practices in climate risk, climate disclosures, financed emissions, and the sustainable finance taxonomy
Continued collaboration with the Australian Industry Energy Transitions Initiative, including their February 2023 report which outlines potential pathways for heavy industry emissions reduction
Sponsored the Australian Farm Institute’s ESG Goals and Target Setting Conference 2023, and jointly hosted a roundtable discussion with Agrifutures Australia on emissions reduction solutions.

For more information, refer to our Climate Report (PDF 9MB). Regular updates on our progress can be found in our Performance Reports.

^{1 As at 30 September 2023.
2 Based on IJGlobal and Westpac Research Data for the period 1 October 2018 to 30 September 2023.
3 On track to achieve 100% renewables outcome for our direct operations. 95% of this supply is expected to be sourced from within the markets the electricity is consumed. We will continue to identify opportunities to lift local sourcing to 100%, to include for our Fiji and PNG businesses, as required to achieve 100% under the RE100/CDP Standard.
4 2021 baselines for scope 1, 2 and scope 3 upstream emissions targets adjusted for COVID-19 pandemic and other impacts. Refer to our 2023 Sustainability Index and Datasheet.
5 Refer to our 2023 Sustainability Index and Datasheet for details of included Scope 3 upstream emissions sources.
6 Certification is obtained for Westpac’s Australian and New Zealand operations (excludes financed emissions) under the Australian Government’s Climate Active Carbon Neutral Standard for Organisations and the New Zealand Toitū net carbonzero certification respectively. Further information can be found on the Sustainability Performance Reports page on our website.}

Our operational targets

In FY23 we reduced our direct scope 1 and 2 and scope 3 upstream emissions by improving the efficiency of our operations, consolidating commercial offices, operationalising agreements to source electricity from renewables and more actively working with suppliers. Since 2021 we have achieved a 66% reduction in our scope 1 and 2 emissions, surpassing our 2025 target of a 64% reduction by two years. From April this year we achieved a significant milestone sourcing the equivalent of 100% of our Australian electricity demand from renewables. Our key operational targets can be found above - under ‘Our action areas’. In addition to those, our operational water consumption and waste diversion targets are as follows:

Reduce water consumption in Australian workplaces by 15% by 2025 relative to a 2020 baseline
Divert 80% of waste from landfill at Australian commercial sites by 2025 and 85% by 2030 relative to a 2020 baseline.

Refer to page 13 of our Action Plan (PDF 537KB) to learn more about key initiatives focussed on reducing our operational emissions.

Natural capital

Natural capital is the Earth’s stock of renewable and non-renewable natural resources – including soil, water, air, minerals, plants and living things – that combine to yield a flow of benefits to people. Assessment of natural capital is important to support decision making that aims to conserve nature and reduce nature loss.

As a major financial institution, Westpac Group can play a significant role in supporting our institutional and commercial customers through engagement and lending, to conserve nature and reduce natural capital loss in the way they manage their business.

Our Natural Capital Position Statement (PDF 3MB) defines our ambition to become a nature positive bank – that is, a bank that supports nature positive outcomes. As at November 2023, for us, becoming a nature positive bank means developing our understanding of nature-related risks and opportunities for our business and customers, and seeking to develop processes to have regard to nature positive outcomes through our business and to support customers. Currently, our ambition and this Position Statement apply to our direct operations and lending to institutional and commercial customers. We expect this definition to evolve as our understanding matures.

Climate change and environmental issues

Our commitment to action on climate change

Our principles

Our action areas

Our targets

Upstream oil and gas1

Our progress1

Our operational targets

Natural capital

Our plan in action

Sustainability Insights

Our Position Statements

Sustainability news

Global commitments and partnerships

Upstream oil and gas¹

Our progress¹