Sustainability Risk Management Framework

Westpac's Sustainability Risk Management Framework sets out our approach to managing sustainability risk. It is an integral part of Westpac's Risk Management Strategy and is supported by a number of key Group-wide and divisional policies and procedures including sensitive sector Position Statements.

Sustainability risk management is relevant across the Group, including in relation to our:

Lending and investment decisions
Supply chain management
Operations
Employees

The Framework is supported by the other risk class specific frameworks which outline our risk management requirements including the risk governance relationship between the Board, Board Committees and senior management and key policies for managing risk.

Specific policies and positions

The following position statements set out our approach to assessing the environmental, social and governance dimensions of our banking and financing activities. These are supported by policies in Westpac's credit manuals:

Climate Change Position Statement and Action Plan (PDF 1MB)

Natural Capital Position Statement (PDF 2MB)

Human Rights Position Statement and Action (PDF 1MB)

Agribusiness Position Statement (PDF 116KB)

Tobacco Position Statement (PDF 93KB)

Defence Position Statement (PDF 121KB)

Payday Lending Position Statement (PDF 145KB)

Updates to our position statements reflect our continued work to operationalise these statements and strengthen our management of sustainability risks, including responding to evolving regulatory requirements.

Sustainability risk in Lending

We seek to understand the potential for sustainability-related risks to impact on credit risk. We do so by reviewing our Risk Management Framework, Risk Management Strategy, Sustainability Risk Management Framework, risk appetite measures and policies. These inform how we integrate the criteria set out in our Position Statements. We seek to apply these criteria to our portfolio, customers and transactions as appropriate.

Escalation of risks to relevant divisional risk committees occurs in accordance with our Sustainability Risk Management Framework. If the identified risks do not meet our risk appetite then we may consider whether application of conditions will sufficiently manage the risks, or else we may decline the transaction.

APPROACH TO SUSTAINABILITY RISK MANAGEMENT