Westpac Group 2019 Sustainability Performance Report

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2019SustainabilityPerformance ReportWe have committed to sourcing 100% of ourglobal electricity consumption from renewablesources by 2025. Ceri Binding, Head of Energyand Utilities in Westpac Group’s propertyteam, proudly shows her son Bomen SolarFarm, key to the first phase of our transition.Help whenit matters.

WESTPAC GROUP2019 SUSTAINABILITY REPORTCHAIRMAN AND CEO LETTERTHE ISSUES THAT MATTEROUR APPROACHPERFORMANCE METRICSWelcome to our2019 SustainabilityPerformance Report.We provide a suite of information about the Group’s Full Year 2019 performance.As well as our Sustainability Performance Report, further information can befound in our Annual Report, Full Year Financial Results, Annual Review andSustainability Report, and Investor Discussion Pack.Financials ANNUAL REPORT 2019 FULL YEAR FINANCIALRESULTS FY19 INVESTOR DISCUSSION PACKGovernance CORPORATE GOVERNANCESTATEMENTSustainability SUSTAINABILITY PERFORMANCEREPORT REMUNERATION REPORT(PART OF ANNUAL REPORT) PILLAR 3 REPORTNAVIGATION ICONSRead more or refer to anotherreport for information Watch this videoSpotlightAll figures are for the 12 months ended 30 September 2019 unless otherwise indicated. All comparisons are against results for the12 months ended 30 September 2018 unless otherwise indicated. All dollar amounts are in Australian dollars unless otherwise indicated.Westpac Banking CorporationABN 33 007 457 141OTHER INFORMATION2

WESTPAC GROUP2019 SUSTAINABILITY REPORTCHAIRMAN AND CEO LETTERTHE ISSUES THAT MATTEROUR APPROACHPERFORMANCE METRICSOTHER INFORMATION3Contents.LETTERTHE ISSUES THAT MATTER5.Chairman10 Help in the momentsthat matterand CEOletter12 Secure andreliable banking13 Supporting thosein need of extra careOUR APPROACH50.9.CustomersPERFORMANCEMETRICS14 Support for droughtaffected communities15 Improving financialaccess in remoteAustralia23.Our people25 Strengtheninginclusion anddiversityElectrician Timwires solar panels atBomen Solar Farm.26 Supportingwellbeing17 Governance at Westpac18 Role and responsibilitiesof Westpac’s Board66.94.25 A future-readyworkforce14 Disaster relief support& serviceOTHERINFORMATION24 Putting serviceat the heart ofeverything we do18 Changes we are making16.Governance,conduct &performanceBoard and executivegovernanceRisk and complianceCustomer experienceRemuneration andaccountabilityCultureRoyal Commissionresponse plan22 Industry reformcontinues22 Financial and economicperformance28 Spotlight on climatechange and humanrights27.Creatingsustainablevalue40 ProgressingReconciliation41 Sustainable finance45 Partnering topromote impact46 Building strongercommunitiesSustainableDevelopment Goals.The 2030 Agenda forSustainable Development,adopted by all United NationsMember States in 2015, providesa shared blueprint for peace andprosperity for people andthe planet, now and into thefuture. In Assessing impact andperformance on page 60, wemap how Westpac’s initiativescontribute to the UN SustainableDevelopment Goals (SDGs).

WESTPAC GROUP2019 SUSTAINABILITY REPORTCHAIRMAN AND CEO LETTERWestpac at a glance.VisionTo be one of theworld’s great servicecompanies, helpingour customers,communities andpeople to prosperand grow.Australia’sfirst bankFounded in1817, Westpacis Australia’sfirst bank andoldest company.Westpac is one offour major banksin Australiaand one of thelargest banks inNew Zealand.THE ISSUES THAT MATTERWe provide abroad range ofbanking andfinancial servicesOUR APPROACHPERFORMANCE METRICSOur portfolioof brandsOTHER tiesCustomerFranchiseHelping peoplemake betterfinancial decisionsDigitalTransformationHelping peopleby being therewhen it mattersmost to themPerformancedisciplinesHelping peoplecreate nalBankPacificWestpacNew Zealand4

WESTPAC GROUP2019 SUSTAINABILITY REPORTCHAIRMAN AND CEO LETTERTHE ISSUES THAT MATTEROUR APPROACHPERFORMANCE METRICSOTHER INFORMATIONChairman andCEO letter.Five years ago, we setourselves the aspiration tobe one of the world’s greatservice companies. This meansrecognising that banking isa service business – not aproduct business – and thatour long-term success dependson the strength and depth ofour customer relationshipsover time.#1Australia’s mostsustainable bank.Ranked #1 Australian bank in the2019 Dow Jones SustainabilityIndices Review.It also means that we take seriously ourcommitment to running our business in asustainable way: supporting the communitieswe operate in, behaving ethically, meeting ourregulatory requirements, and contributing morebroadly to important issues such as climate change.We think of 2019 as a watershed year, both for thebanking industry and for Westpac. Despite thechallenging conditions, we have acted decisivelyand made good progress on implementing therecommendations from the Royal Commission intoMisconduct in the Banking, Superannuation andFinancial Services Industry and those from ourCulture, Governance and Accountability (CGA)self-assessment.In this report we cover some of the changes weare making to strengthen governance and riskmanagement. This includes the way that wehandle customer complaints and that we approachproduct design and performance to deliver theright outcomes for customers. These are importantchanges to help us build a stronger and moresustainable bank.We are at the two-year mark of our 2020Sustainability Strategy, and are pleased to sharea number of notable highlights. These reflect ourfocus on service and how we can best support ourcustomers and contribute more broadly to the growthand prosperity of the economy and the community.The first is around the progress we are makingto better support customers in vulnerablecircumstances, also a prominent theme in thefindings of the Royal Commission. In 2018, weintroduced our Customer Vulnerability Action Planand since then have put in place new policies,training and a 1800 Priority Assist number tosupport customers in complex vulnerable situationssuch as family violence, elder or financial abuse.Lindsay MaxstedChairmanThe second is around recognising the importanceof renewable energy as a way to decrease our ownenvironmental footprint. This year, we committed tosourcing 100% of our global electricity consumptionthrough renewable sources by 2025. As one of thefirst Australian companies to make this commitment,we became a member of RE100 – a globalleadership initiative bringing together the world’smost influential businesses who have committedto go 100% renewable. Our cover story featuresBomen Solar Farm with whom we have signed apower purchase agreement that is key to the firstphase of our transition. You can read about howthis is creating local employment, delivering bothenvironmental and social outcomes on page 33.Brian HartzerChief Executive Officer5

WESTPAC GROUP2019 SUSTAINABILITY REPORTFounding bank and signatory to thePrinciples for Responsible Bankingannounced in September 2019.Supporter of the United Nation’sSustainable Development Goals (SDGs)and its agenda for action on improvingthe wellbeing of present and futuregenerations.Signatory to the Business CoalitionStatement on Climate in 2015, whichhighlights our support for the ParisClimate Agreement to limit globalwarming to less than two degreesCelsius above pre-industrial levels.Founding signatory to the UnitedNations Global Compact and asupporter of the UN’s ‘Protect, Respect,Remedy’ framework.CHAIRMAN AND CEO LETTERTHE ISSUES THAT MATTERThe third area is sustainable finance. Since weannounced our 2020 Climate Change ActionPlan in 2017, we have continued to work with ourcustomers on their pathway towards a net zeroemissions economy. This year we introduced ourfirst sustainability-linked loans, through whichborrowers are rewarded for meeting pre-determinedsustainability targets. This is an exciting area that webelieve is set to grow.As we reflect on our broader sustainability agenda,collaboration is increasingly a hallmark of leadership.This year, we were a founding bank and signatory tothe Principles of Responsible Banking announced atthe United Nations General Assembly in September.We were one of 130 banks globally, representingone third of the global banking sector, to committo strategically align our business with the goalsof the Paris Agreement on Climate Change andthe UN Sustainability Development Goals.We also joined other Australian banks, insurers,super funds, investors and industry groups toform the Australian Sustainable Finance Initiative,and are part of the newly established CorporateSustainability Working Group of the AustralianBanking Association (ABA) that will be workingtogether in areas such as climate change, modernslavery and a set of common sustainability metrics.Westpac Foundation marks its 140th anniversarythis year. With its ambitious goal to help change100,000 lives for the better and help create10,000 jobs for people that need it most by2030, collaboration is also a key theme. Workingwith social enterprises that are creating jobs andtraining opportunities for people facing barriersto mainstream employment for over a decade,this year the Foundation announced the first fivesocial enterprises to receive funding through itsnew collaborative funding approach in partnershipwith ten other organisations.OUR APPROACHPERFORMANCE METRICSOTHER INFORMATIONShared at the 2017 First Nations NationalConstitutional Convention, the Uluru Statement fromthe Heart invites all Australians to walk together ina movement of the Australian people for a betterfuture. We are proud to respond to this invitation,which we believe is an important roadmap towardsempowering Aboriginal and Torres Strait Islanderpeople and advance Reconciliation.While this has been a challenging year, we are proudto report that our actions have seen us regain ourposition as Australia’s most sustainable bank.We hope that through reading this report you willsee that we are serious about our role in shapingand financing a sustainable future and makinga positive contribution to society.With warm regards,Lindsay MaxstedChairmanBrian HartzerChief Executive Officer6

WESTPAC GROUP2019 SUSTAINABILITY REPORTCreatingsustainablevalue.Creating long-termvalue for the people whobank with us, work withus, invest in us or arepart of our broadercommunities.CHAIRMAN AND CEO LETTERTHE ISSUES THAT MATTERPERFORMANCE METRICSOTHER INFORMATIONHELPINGSUPPORTINGENGAGINGCONTRIBUTING TOCUSTOMERSDIVIDENDS PAIDEMPLOYEES (HEADCOUNT)COMMUNITY INVESTMENTCONTRIBUTIONS3Customers14.2mDEPOSITS 525bnFINANCIAL ASSISTANCEPACKAGES ISSUED FORCUSTOMERS EXPERIENCINGFINANCIAL HARDSHIP52,025NEW HOME LOANSPROVIDED IN AUSTRALIA1. Proportion of women (permanent and maximum term)in leadership roles across the Group. It includes the CEO,Group Executives, General Managers, senior leaders withsignificant influence on business outcomes (direct reportsto General Managers and their direct reports), large (3 )team people leaders three levels below General Manager,and Bank and Assistant Bank Managers.2. New monthly employee survey conducted from 2017.Six month rolling average results reported.3. Excludes commercial sponsorships.OUR APPROACH 61bnShareholders 6.0bnSHAREHOLDERS AND MOREVIA SUPER FUNDS 610kCASH EARNINGSPER ORDINARY SHARE198.2cCASH RETURN ON EQUITY10.75%Employees36,311PAID TO EMPLOYEES 5.0bnWOMEN INLEADERSHIP ROLES150%EMPLOYEE COMMITMENTINDEX271%7Communities 130mAWARDED IN EDUCATIONALSCHOLARSHIPS BY WESTPACSCHOLARS TRUST TO THENEXT 102 WESTPAC SCHOLARS 4.3mRELIEF PACKAGES FORCUSTOMERS IMPACTED BYNATURAL DISASTERS529TOTAL TAX EXPENSE 3.0bn

WESTPAC GROUP2019 SUSTAINABILITY REPORTCHAIRMAN AND CEO LETTER CUSTOMERS & SERVICE The issuesthat matter.THE ISSUES THAT MATTEROUR APPROACHGOVERNANCE, CONDUCT & PERFORMANCE OUR PEOPLEPERFORMANCE METRICS OTHER INFORMATION8CREATING SUSTAINABLE VALUEA focus on current and emergingrisks and opportunities shapingour operating environment andimpacting our stakeholders.More detailed information on our top ten material issues and our materialityassessment process can be found in Our approach on page 50.Installing one of310,000 solar panels atBomen Solar Farm.Read the full story inCreating sustainable value.

WESTPAC GROUP2019 SUSTAINABILITY REPORTCHAIRMAN AND CEO LETTER CUSTOMERS & SERVICE Customers& service.THE ISSUES THAT MATTEROUR APPROACHGOVERNANCE, CONDUCT & PERFORMANCE OUR PEOPLEPERFORMANCE METRICS OTHER INFORMATION9CREATING SUSTAINABLE VALUE 525bnSupport for customersin need of extra care.CUSTOMER DEPOSITS2018published 2020 CustomerVulnerability Action Plan 125bnPutting service at the heartof everything we do. 100mdrought relief fund for AustralianfarmersBUSINESS LENDING52,000 financial assistance packages forcustomers facing financial hardship 449bn1800Priority Assist – assisted 900 customers experiencing domesticand family violence and financialabuseHOME LENDING5.8mDIGITALLY ACTIVECUSTOMERSReduce inequality within andamong countriesPromote peaceful and inclusivesocieties for sustainabledevelopment, provide access tojustice for all and build effective,accountable and inclusiveinstitutions at all levelscustomersSecure andreliable banking.Delivering against the UN SustainableDevelopment Goals (SDGs).Build resilient infrastructure,promote inclusive and sustainableindustrialisation and fosterinnovation14.2mHelp in the momentsthat matter. Separating from a partnerHaving a babyLoss of a loved oneSerious illness and injury3,000 Indigenous Australians supportedthrough dedicated Indigenouscustomer care team 24/7 Scams Assist team Fraud Money Back GuaranteeSimplifying product offerings,putting customers in controlof their finances.home loan60% shorter documentoffer Savings HabitWestpac Davidson Institute– Best Financial Literacy andBetterment Initiative, AustralianBanking Innovation Awards 2019Digital Wealth Review toolRed24/7 virtual assistant

WESTPAC GROUP2019 SUSTAINABILITY REPORTOur vision is to be one ofthe world’s great servicecompanies, helping ourcustomers, people andcommunities to prosper andgrow. For our customers,we want every interactionwith us to be a great serviceexperience, helping them toachieve what is importantto them.We know that customers have a choiceabout who they bank with. Net PromoterScore (NPS) measures if we are meetingcustomers’ needs by asking them if theywould recommend us to their friends andfamily. Ranking number 1 among the fourmajor banks in our Business customer scoresand number 3 in Consumer1, we have a lot todo to improve.Through our ‘get it right, put it right’initiatives we have continued to reviewproducts, processes and policies to identifywhere we may not have got it right for ourcustomers. Where problems have beenidentified, we have committed to fix themand refund customers. These initiativesidentified a number of issues that haverequired remediation this year.CHAIRMAN AND CEO LETTER CUSTOMERS & SERVICE THE ISSUES THAT MATTERSPOTLIGHTHelp in the momentsthat matter.This year, a big focus has been on buildingon the support we offer customers attimes of change in their life. Buying ahome, starting a family, opening a businessor going through a tough time – these aretimes when customers may need specialisthelp and greater support. OUR PEOPLEPERFORMANCE METRICS Separating from a partner:Loss of a loved one:One in three marriages in Australia end indivorce. Not only is it a time of heightenedemotions but it is also a time to makeimportant financial decisions and take stepsto regain financial independence. dedicated hub with practical tools andresources to support customers dealingwith bereavement and the managementof a deceased estate estate planning guide and checklist end-of-life planning guidance fast track credit card applications forsurviving additional card holder.How we can help: specialist teams to assist customers incomplex situations who need extra care repayment relief options such asmortgage repayment pauses andreductions SmartPlan, a credit card repaymentplanner to manage payments for largepurchases when setting up a new home making it easier to remove a name froma joint home loan Separation Calculator to take stock ofjoint and individual assets and liabilities home selling guides to help prepare fora property sale fast track credit card applications forsecondary card holders online separation information hub withguides and tools to support customersgoing through a separation. mortgage features such as reducedrepayments while on parental leave andrecognition of back-to-work incomewhen applying for a new home loan budget planners and toolkits savings products such as Bump forchildren and Westpac Life.Visit our Life Momentshub to learn more.OTHER INFORMATIONCREATING SUSTAINABLE VALUEHaving a baby:We want our customers to feel confidentin trusting us with their banking and thischapter explores some of the many actionswe are taking to achieve this.1. Rankings refer to Westpac’s position relative to theother three major Australian banking groups (ANZ,Commonwealth Bank and NAB). Refer to the 2019Westpac Investor Discussion Pack for more information.OUR APPROACHGOVERNANCE, CONDUCT & PERFORMANCESerious illness and injury: videos, guides and tools providingpractical information across a range oftopics such as physical and mental health,financial preparation in the event of alife-limiting illness and access to socialand support services support for carers mortgage relief options.Cancer Assist programwins Innovation in RetailLife Award at the FinancialServices Council’s 2019Life Insurance Awards.Since launching a pilot in January 2018,the Cancer Assist program, offeredthrough Westpac Life Insurance, hasresulted in 86% of clients citing animprovement in their functional capacity,giving them a better chance at returningto wellness within a shorter time frame.The program has also given clients abetter claims service experience, withclient satisfaction averaging 90%.10

THE ISSUES THAT MATTERWESTPAC GROUP2019 SUSTAINABILITY REPORTCHAIRMAN AND CEO LETTERBacking small business growth.New and simpler productofferings, putting customersin control of their finances.Small businesses employ around 4.7 millionpeople and play an important part inAustralia’s economic growth1.This year, we introduced a new Help foryour Business hub providing insights andresources to help businesses start, grow andrun, as well as new product features enablingbusinesses to create and send customisedinvoices directly from Westpac Live. We willalso be introducing a new online service tomake it easier and faster for small businessesto access unsecured loans of up to 150,000to help them invest and grow.Presto Smart, developed in collaboration with oneof our fintech partners, Assembly Payments, helpsbusinesses streamline their customers’ paymentsacross their point-of-sale systems. CUSTOMERS & SERVICE Through our product lifecycle reviews andother processes, we continue to simplify ourproduct offerings and design products tomeet the needs of our customers.In the next stage of our Customer ServiceHub roll-out, we have continued to improvethe customer home ownership experience: home loan offer document is nowapproximately 60% shorter, written ineasy-to-understand language with only one ‘customer needs’conversation, one application and onecredit decision for a home loan, credit cardand linked offset account, plus quick accessto home and contents insurance, we’remaking it easier for customers to set upand manage their accounts key customer moments – such as full loanapproval, settlement completion and firstrepayment reminders – are recognisedwith automatic SMS and emails. Bankerscan also easily manage tasks with BankerDashboard alerts when customers uploaddocuments and when actions are neededto continue the customer’s application.1. Source: Council of Small Business Organisations Australia, COSBOA.OUR APPROACHGOVERNANCE, CONDUCT & PERFORMANCE OUR PEOPLEPERFORMANCE METRICS OTHER INFORMATIONCREATING SUSTAINABLE

2019 Sustainability Performance Report. We provide a suite of information about the Group’s Full Year 2019 performance. As well as our Sustainability Performance Report, further information can be found in our Annual Report, Full Year Financial Results, Annual Review and Sustainability Report, and Investor Discussion Pack. Financials

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