Westpac sets 2030 net zero commitmentsBY RACHEL ALEMBAKIS | WEDNESDAY, 27 JUL 2022 10:23PM
Read more: Westpac, Net Zero, decarbonisation, Net-Zero Banking Alliance, Peter King
Westpac has committed to reducing its Scope 1, 2 and 3 financed emissions by nearly a quarter by 2030 as part of a package of new net zero by 2050 commitments.
Westpac has also joined the UN-convened Net-Zero Banking Alliance (NZBA) as part of these commitments.
"For Westpac, our commitment to net-zero is about reducing our operational and financed emissions, helping customers transition to net-zero, and collaborating on initiatives that drive the economy towards net zero," said Westpac CEO Peter King. "With nearly 80% of Westpac's electricity portfolio in renewable energy, we're already funding the transition to a cleaner future. Now, by releasing sector targets for 2030 in emissions-intensive industries, we're setting clear markers and will help our customers transition."
Westpac announced that a new emissions intensity target of 0.10tCO2e/MWh (our power generation customers' scope 1 and 2) by 2030, which is lower than the FY21 Australian portfolio emissions intensity of 0.26tCO2e/MWh. The Australian portfolio forms a majority of the emissions covered by the target, Westpac noted.
The banking group also committed to a 23% reduction in scope 1, 2 and 3 absolute financed emissions by 2030, relative to a 2021 baseline.
As part of that, the bank will "only consider directly financing new greenfield oil and gas projects that are in accordance with the International Energy Agency's Net Zero by 2050 scenario or where the Australian or New Zealand Government or regulator determines that supply from the asset is necessary for national energy security."
Existing oil and gas lending customers with a credible transition plan in place by 2025 will continue to be supported with corporate lending, Westpac said.
Westpac has previously committed to exit financing of thermal coal by 2030, and has updated their thermal coal mining definition to align with the NZBA guidelines for thermal coal. The new NZBA-aligned definition applies to companies where more than 5% of revenue comes directly from thermal coal mining.
For the cement industry, Westpac has also set an emissions intensity target of 0.57tCO2e/tonne of cement production by 2030 for customers' scope 1 and 2 emissions, compared to the Australian industry average of 0.77tCO2e/tonne of cement in 2019.
Cement production is included in the first phase of targets due to the emissions intensity of the manufacturing process.
"As the nation transitions to a lower carbon future, we are committed to playing our role, particularly through partnering with our customers," said Westpac Institutional Bank chief executive Anthony Miller. "To support this, we continue to invest in our frontline bankers' ESG capability and build sustainable finance solutions.
"Joining the NZBA is a clear commitment to improve our climate performance, help customers transition, and collaborate on initiatives, policies and disclosures that achieve net-zero."
Westpac will continue work to operationalise its targets and to finalise their integration into internal processes and will publish their transition plan within 12 months of setting targets.
Image courtesy of Matt Palmer on Unsplash
Should Parliament legislate definitions for ESG and sustainable financial products?