As Westpac continues to work with customers and communities to respond to the challenge of climate change, the bank is uncovering new opportunities for its property customers. Westpac’s Nick Wandke points to the possibilities.
“Operating sustainably has long been a part of Westpac’s culture – but in recent years we’ve driven a step change in our focus on environmental, social and governance (ESG) performance” Wandke, Westpac’s ESG lead for consumer and business banking, says.
Westpac almost halved its own Scope 1 and 2 emissions in just two years – largely through sourcing more renewable energy for its own operations – and is now working with customers on how best to support them in the transition to a net zero emissions economy.
The bank has been a major financier of climate solutions for more than a decade, including $1.9 billion of new lending for renewable energy projects last year alone. And its 2021 look forward sustainability strategy outlines a target for a further $15 billion in new lending for climate change solutions by 2030.
Australia’s property sector has also been on a long sustainability journey, and last year topped the GRESB table – the world’s leading benchmark for ESG performance of real estate – for the eleventh consecutive year.
Wandke notes large organisations are using sustainability-linked loans and bonds to align their ESG performance and financing, and to attract investors looking for partners with robust sustainability strategies. In fact, volumes of sustainable debt surpassed $2.2 trillion in 2021, more than doubling the previous year.
“We’re very excited about how we can bring our sustainable finance expertise to our businesses and specifically our property customers.
“If we look forward to what Australia’s net zero economy of the future might look like, property and buildings are expected to play a significant role in that decarbonisation story.
“This will include new certified buildings, but also retrofitting existing buildings to improve energy efficiency, things like improved insulation, rooftop solar, smart monitoring and control systems. And not just for office buildings, but across a range of asset types such as warehouses, retail centres, smaller-scale commercial and even residential developments such as apartment buildings. It’s a really exciting space.”
In January, Westpac announced a new partnership with Monash University to upskill its bankers on both ESG risks and opportunities, to better support customers in the transition to a lower emissions economy. More than 800 employees will participate in the program, designed in partnership with Monash Sustainable Development Institute and ClimateWorks Australia.
Part of the challenge for banks – indeed industry more broadly – is the need for a common set of definitions around what is sustainable and what activities within a given sector might be classified as green, social or transition. The EU is well advanced on its “taxonomy” or classification system for sustainable finance and Westpac is working with the Australian Sustainable Finance Institute on a similar initiative.
“Further good news is that the Australian property sector is well-advanced, with mature certification schemes such as Green Star, and transparent rating systems such as NABERS already available in the market,” Wandke says.
“We’re now focussed on how we can encourage uptake among our small-medium and commercial customers; what role we can play to build capacity and best support our customers to become more sustainable.
“Momentum is building. There is a tremendous upside to the net zero transition and we’re very excited to be working with our customers to help them seize that opportunity.”
Find out more about Westpac’s approach to sustainability.