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 732KB). 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.
At our 2023 Annual General Meeting, over 90% of shareholders voted to support Westpac’s Climate Change Position Statement and Action Plan.
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 |
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|---|---|---|
1 |
Net-zero, climate resilient operations |
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| 2 | Supporting customers’ transition to net-zero and to build their climate resilience |
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| 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 732KB). 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 732KB).
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 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 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
Target: 1.42 tCO2-e/tonne of steel for scope 1 and 2 by 2030.
Target: 10.35 tCO2-e/tonne of aluminium for scope 1 and 2 by 2030.
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)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 2024 Climate Report (PDF 11MB) and 2024 Climate Methodologies Supplement (PDF 2MB). Find out more about the accessible versions of these artefacts.
- Engaged just over 150 institutional customers on their climate transition plans and updated our Climate Transition Plan Assessment Framework, as guided by the Transition Plan Taskforce (TPT) Disclosure Framework.
- Reduced our total operational emissions (scope 1, 2 and scope 3 upstream) by a further 19%, largely due to meeting our renewable energy goals ahead of schedule. Our scope 1 and 2 emissions are now 86% lower than our 2021 baseline2 which surpasses our 2030 target of a 76% reduction, six years ahead of schedule.
- Sourced the equivalent of 100% renewables for our Australian operations for the full year.
- Our scope 3 upstream emissions3 declined a further 6% over the year, bringing the total decline to 41% since our 2021 baseline.
- Set targets in all nine emissions-intensive sectors required under our NZBA commitment4.
- Developed our Sustainable Upgrades home and investor loans, collaborating with the Clean Energy Finance Corporation (CEFC) to enable home loan customers to invest in the energy efficiency or climate resilience of their properties and reduce their energy costs.
- In New Zealand, we launched a new Sustainable Equipment Finance Loan, supporting Kiwi businesses to reduce their climate impacts through a range of sustainable assets, such as electric vehicles.
- Our Sustainable Farm Loan and Sustainable Business Loan, launched last year in New Zealand, now have balances of over NZ$4.1 billion.
- At 30 September 2024, we had assessed a total committed exposure (TCE) of $28.7 billion and facilitated approximately $13.7 billion in bonds (cumulative) between 2021 and 2024.
- Committed to invest in Virescent Ventures, a new venture capital fund focused on investing in early-stage climate-related technologies aimed at addressing climate challenges.
- Received support from our shareholders at the 2023 AGM where 92% of the votes cast were in favour of our Climate Change Position Statement and Action Plan (CCPS).
For more information, refer to our 2024 Climate Report (PDF 11MB) and 2024 Sustainability Index and Datasheet (XLS 1MB). Download an accessible version of our 2024 Climate Report (PDF 10MB). Regular updates on our progress can be found in our Performance Reports.
1. As at 30 September 2024.
2. 2021 baselines for scope 1,2 and scope 3 upstream targets adjusted for COVID pandemic and other impacts. Refer to the 2024 Sustainability Index and Datasheet.
3. Refer to our 2024 Climate Report or 2024 Sustainability Index and Datasheet for sources..
4. NZBA Guidelines require sector-level targets be set for all, or a substantial majority of, carbon-intensive sectors (where data and methodologies allow) that include agriculture, aluminium, cement, coal, commercial and residential real estate, iron and steel, oil and gas, power generation and transport.
Our operational targets
This year, we reduced our total operational emissions (scope 1, 2 and scope 3 upstream) by a further 19%, largely due to meeting our renewable energy goals ahead of schedule.
Our scope 1 and 2 emissions declined a further 59% in FY24. The 86% decline since our 2021 baseline1 means we have exceeded our 2030 scope 1 and 2 emission reduction target six years ahead of schedule. The reduction in our scope 1 and 2 emissions was mainly due to sourcing the equivalent of 100% renewables for our Australian operations for the full year. We also sourced renewable energy certificates for our international operations.
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 our Action Plan (PDF 732KB) to learn more about key initiatives focussed on reducing our operational emissions.
1. 2021 baselines for scope 1, 2 and scope 3 upstream targets adjusted for COVID pandemic and other impacts. Refer to the 2024 Sustainability Index and Datasheet.