Carbon Disclosure Project Response from Westpac Banking Corporation

Transcription

1 Carbon Disclosure Project 2005 Response from Westpac Banking Corporation

2 1. General: Do you believe climate change, the policy responses to climate change and/or adaptation to climate change represent commercial risks and/or opportunities for your company? If yes, specify the implications, detail the strategies adopted and actions taken to date. Any understanding of the associated risks and opportunities arising from climate change has to begin with the recognition that climate change is not just an environmental problem; it is also fundamentally an issue of economics and sustainable development. The resulting impacts of climate change are almost impossible to predict, owing to their highly localised nature and because of the sheer diversity of potential scenarios. Commonly understood impacts include increased flooding and drought, increased frequency and severity of extreme weather events, disruption to agriculture, and loss of species and biodiversity to name just a few. All of which have numerous economic implications, at both the company and the industry-sector level. The immediate risks to business arising from climate change also need to be framed within the context of international policy responses to climate change, through mechanisms such as the Kyoto Protocol, the EU ETS, the Japanese Carbon Tax, the New Zealand Carbon tax and state-based emissions cap and trade initiatives in the Untied States for example. Within Australia, there is no doubt that continuing uncertainty over future emissions policy is hindering investment in necessary energy infrastructure. Climate change policy in Australia must address the challenge of maintaining energy supplies at globally competitive costs once additional costs are placed on greenhouse gas emissions. The difficulties of this are exacerbated by Australia s high dependence on fossil fuels for energy and the fact that the vast majority of Australia s emissions come from the energy sector. At the same time, the Australian agricultural sector is currently experiencing the third worst drought on record, which is expected to wipe almost a percentage point off Australia's economic growth this year through reduced farm output. Drought is currently gripping around 45% of Australian agricultural land, and the March-to-May season has been one of the driest since record keeping began in Within this context, there is no doubt that current and future business strategies have to develop a better understanding of the risks to their future financial sustainability which climate change and the policy responses to climate change present. On the flip side, there are also significant business opportunities for those companies that are able to capitalise on changing regulatory frameworks and meet the demands of new and emerging markets. Particularly as the creation of market mechanisms to mitigate the costs associated with required greenhouse gas emissions reductions are critical in addressing climate change. In March 2005, for example, State and Territory governments in Australia announced the formation of an inter-jurisdictional working group to investigate the establishment of a 2

3 national emissions trading scheme, which could one day link up to international carbon markets. Westpac also operates in New Zealand and the Pacific, where there is clearly the potential for other flexible market mechanisms from Kyoto such as Joint Implementation (JI) and the Clean Development Mechanism (CDM), and where many of the nation-islands are most critically affected by the impact of climate change. In particular, CDM allows Annex 1 countries to acquire certified emissions reductions by undertaking greenhouse gas reduction or mitigation projects in non-annex 1 (developing) countries. Having ratified the Kyoto Protocol, New Zealand is the only Annex 1 country in the Pacific Rim that can participate in the CDM. This clearly offers opportunities for potential technology transfer to Pacific Island countries. Within this environment, we have sought to competitively differentiate Westpac from the other major players in our market by adopting a strong position on environmental issues. Historically, Westpac has been examining and addressing the impact of environmental issues on our business for over a decade. In 1992, Westpac was a founding signatory to the United Nations Environment Program for Finance Institutions (UNEP FI). Since then, we have also been the first bank in Australia to: Develop an Environmental Policy and Management System; Develop a Best of Sector SRI investment product; Ratify the Equator Principles, boosting the assessment of social and environmental risk in project finance; Develop and implement a sustainable supply chain management framework; and Measure and report on our environmental performance through a sustainability report. In 2005, Westpac s climate change response remains centred around three primary components: 1. Measuring and reporting on our environmental performance; 2. Anticipating and responding to changes in trade and regulatory frameworks; and 3. Identifying and responding to emerging business risks and opportunities. Measuring our performance Westpac has been a member of the Australian Government program the Greenhouse Challenge, since 1996, and have been measuring and reporting on our environmental performance since Since then, we have reduced our total greenhouse gas emissions by 32%. Westpac was recently acknowledged by the Minister for Environment and Heritage in recognition of our long-standing and continued contribution to greenhouse management in Australia. 3

4 We published our first Social Impact Report in 2001, which included data against environmental indicators from the VFU, GRI and EPI-Finance standards for environmental reporting. Westpac continues to drive improvements in both the scope and depth of our environmental measurement and reporting. Westpac New Zealand recently released its first Social Impact Report, including performance data on greenhouse gas emissions. Westpac is also examining the feasibility of becoming carbon neutral over the longer term. This is a very complex and challenging area and clearly in Australia we would need further progress in terms of renewable energy and emissions trading before it could really be achievable. Contributing to policy debate Westpac is an active contributor to the public debate around the development of policy responses to climate change in Australia and their subsequent economic impact in the marketplace. Westpac has joined with the Australian Conservation Foundation and a multi-sector working group of several major corporates, in order to promote informed discussion and action to address the climate change challenges faced by Australian business. Specifically, the roundtable aims to articulate a practical vision and pathway for achieving a 60 percent reduction in Australia s greenhouse gas emissions by The resulting study, due out in late 2005, will examine the impact of climate change policies on the Australian economy more broadly, as well the impact in a number of key industry sectors in the medium and longer-term. Westpac is also the only major bank currently contributing to the debate on energy infrastructure through the Energy Futures Forum, looking at how growing energy demand can be met in a sustainable way without compromising the natural environment. The Energy Futures Forum is an industry sector led initiative, running over a two-year period. Forum participants provide input, discuss and agree on the parameters for a number of key energy scenarios to be analysed by purpose-built world-class technoeconomic models. By bringing together a range of companies representing different sections of industry, the community, government and research agencies, the forum will provide a comprehensive set of credible energy scenarios and their core assumptions for Australia. The chosen scenarios will be modelled to determine potential energy industry and technology pathways and highlight potential impacts to society, environment and the economy. Capitalising on market opportunities Environmental Markets are being introduced around the world as tools to combat the increasing problems associated with human impact on the earth, particularly global warming. Ideally markets can provide the lowest cost solution to achieve the required environmental outcome. Westpac supports the emerging area of environmental markets through trading. Currently, the only national environmental market in Australia is the Renewable Energy 4

5 Certificate (REC) Market. Westpac is uniquely positioned as the only Australian bank actively involved in the trading of Renewable Energy Certificates (RECs). Our involvement in environmental markets sends important pricing signals to other participants, which in turn assists developers in the financing of new environmentallyfriendly projects. Westpac is also able to assist our customers in managing the price risk associated with their exposure to market fluctuations. Westpac will continue to actively pursue opportunities to participate in other new environmental and emissions trading markets, such as the NSW Greenhouse Gas Abatement Scheme, emerging water trading markets and the European Union Emissions Trading Scheme. Westpac believes that the demand for clean energy will continue to rise, which is why we continue to seek out new ways to provide funding for renewable energy programs to help organisations achieve their sustainability goals in a carbon constrained world. More information on this and other areas of opportunity and innovation which Westpac is involved in are detailed in our response to question three. 2. Responsibility: Do you allocate specific responsibility to executive and independent directors for climate change related issues? Our Board Corporate Responsibility and Sustainability Committee (BCR&SC) 1 has specific responsibility for all environmental issues and approves policy as set by management. Membership of the Committee includes both the Chief Executive Officer and the Chairman of Westpac. Full details on the Board Committee Charter and the full membership list are available on the Westpac website 2. Overall responsibility for our environmental policies and performance, including our Environmental Management System, rests with the Chief Executive. In turn, our Environmental Coordinator, within the Corporate Responsibility and Sustainability team, is responsible for ensuring that environmental policy development, stakeholder engagement and group-wide implementation are managed effectively across the organisation. Direct management of specific environmental issues as they impact relevant business areas are managed within the business, in areas such as Group Property, Strategic Sourcing, Wealth Management, Project Finance and Structured Debt for example. Central to the management of ongoing operational issues is the Environmental Advisory Group. This group includes representatives from key areas of our organisation and meets on a quarterly basis to ensure that environmental considerations, consistent with policy, are incorporated into all aspects of our products, services and company operations. 1 Recently re-named from the Board Social Responsibility Committee

6 Please refer to page 36 of our 2004 Stakeholder Impact Report for more information on Westpac s environmental governance Innovation: What are the relevant technologies and/or processes that can be employed in your company/sector to achieve emission reductions? Have you taken any steps to develop/implement these technologies and do you anticipate being able to profit from their commercialisation? There are a number of different systems and processes in the finance sector which can be adapted to achieve emission reductions. These include: facilitating the growth of the carbon economy; pricing climate change issues in risk assessment; and the development of banking products and services which provide appropriate incentives for the reduction of emissions. The various components of the Carbon Economy relevant to the finance sector can be illustrated by the diagram below. At present, we would consider the carbon economy to be at the stage of Carbon price/value discovery. While this is not operating evenly in all countries or regions, the recent implementation of the Kyoto Protocol and regional schemes such as the EU ETS has rapidly accelerated the use of economic mechanisms for encouraging change across Stakeholder Impact Report available at: 6

7 all industry sectors. This is leading to a greater understanding of carbon value, but has not yet penetrated mainstream financial analysis in a consistent manner. Westpac has been an active participant at every stage of the development of the carbon economy, particularly within the Australian trade and regulatory environment. As detailed previously, Westpac has been actively involved in the public policy debate on climate change in Australia for a number of years. We are currently working through forums such as the ACF Climate Change Roundtable and the Energy Futures Forum to pursue further policy clarity. We have actively participated in the development of Australia s national electricity market since its inception in the early 1990s. Currently, Westpac is uniquely positioned as the only Australian bank actively involved in the trading of Renewable Energy Certificates (RECs). Our involvement sends important pricing signals to the market that encourage the development of renewable energy sources. In addition, we are able to assist our customers to manage the price risk associated with their exposure to the REC market. Westpac has also been involved in the financing of renewable energy and carbon clean technology both directly and through Hastings Funds Management, a division of Westpac Institutional Bank. This has included the financing of projects such as the Pacific Hydro Challicum Hills wind farm, the Mawson Station wind farm in Antarctica and the Eastern Creek Urban Resource-Reduction, Recovery and Recycling (UR-3R) Facility for example. Westpac s wealth management arm, BT Financial Group, is also working in a number of different arenas to better understand and value carbon risk in investment decisions. The Governance Advisory Service (GAS) is an overlay research and advisory service offered to institutional investors wanting to address potential exposure to social, environmental and corporate governance risk in their Australian equities portfolios. On behalf of their superannuation fund clients, GAS undertakes research and dialogue on governance issues. Issues engaged on in 2004 include environmental risk management, as well as workplace health and safety, executive remuneration and risks in the supply chain. GAS currently advises on almost $7 billion of Australian equities investments. In April 2005, BT Financial Group co-hosted the Climate Change Finance Sector Roundtable with the Climate Group, following the 2005 Melbourne Climate Conference. This interactive session looked at investment markets and climate risk in Australia, and included discussion on the issues facing institutional investors. From this roundtable, the Investors Group on Climate Change for Australia and New Zealand (IGCC) has emerged, based on similar investor organisations in Europe and the United States. The IGCC is made up of superannuation funds and other institutional investors concerned about the potential risks and opportunities to their portfolios arising from climate change. BT Financial Group is one of four founding members. Forums such as these are crucial for the development of common benchmarks, metrics and definitions necessary for robust carbon-related financial analysis. 7

8 Westpac was also one of the signatories supporting the Global Compact Who Cares Wins report on how to improve the integration of environmental, social and corporate governance considerations into asset management, securities brokerage services and associated research functions. In 2005, BT Financial Group is one of over 140 institutional investors representing over US$20 trillion in funds under management involved in the Carbon Disclosure Project.. The development of consistent and comparable performance metrics around climate change and carbon risk is vital in allowing financial institutions to reliably factor climate change into mainstream risk systems and processes. On the risk side, the development of consistent assessment policies and processes for the consideration of environmental and social issues, through frameworks such as the Equator Principles, are facilitating the incorporation of climate change issues into standardised risk assessment processes. Lastly, Westpac is currently working with a new business service provider to investigate the development of an overlay services which will allow Westpac employees and customers to render the indirect environmental impacts arising from retail banking products carbon neutral. At this stage, we believe that overlaying an environmental management service on to standard financial products will achieve the biggest environmental impact. We hope to introduce this service in late 2005, early Emissions Trading: Do you have a strategy regarding emerging greenhouse gas emissions regulation and trading initiatives such as the EU Emissions Trading Scheme and the Chicago Climate Exchange? If yes, specify the implications, detail the strategies adopted and actions taken to date. If no, are you planning on doing so, and if so when? Westpac s Environmental Markets Group focuses specifically on trading in environmental mechanisms, including carbon credits. This includes participation in Australia s only national environmental market, the Renewable Energy Certificate (REC) market. Our business focuses on providing risk management solutions for customers and products are specifically tailored to meet individual requirements. Westpac is also positioning ourselves to participate in the NSW Greenhouse Gas Abatement Scheme and other environmental markets as they emerge in Australia. Over 25% of our REC customers have not participated in a trading market before and we assist them in managing their exposure to fluctuations in REC prices. The REC market was designed with the ability to bank RECs for surrender in future years. What is becoming clear to those who have contracted to buy the entire output of projects under long-term agreements, is the high capital cost of holding RECs as inventory for forward requirements. As such, Westpac has been assisting our customers to minimise this holding cost by buying excess RECs in the early years and selling them back in the later years of the scheme where they are needed for compliance. As a bank, we have one of the lowest costs of capital in the market so it is possible for us to hold the RECs for a cheaper rate. 8

9 This saves the customer thousands of dollars in holding costs, frees up cash for them to use in the interim and adds much needed liquidity to the market. 5. Operations: What is the quantity in tonnes CO2e of annual emissions of the six main GHGs produced by your owned and controlled facilities in the following areas? - Globally. - Annex B countries of the Kyoto Protocol. - EU Emissions Trading Directive. Since 1996, Westpac has reduced our annual greenhouse gas emissions by 32%. For the year ending 30 September 2004, Westpac s total greenhouse gas emissions were 136,400 tonnes of CO2 emissions, down from 137,200 tonnes in Westpac reports annually on our environmental performance as part of the Australian Greenhouse Challenge, a program run through the Federal Government Australian Greenhouse Office (AGO) 4. The scope of our reporting is agreed with the AGO under the terms of the Co-operative Agreement signed upon joining the program. The AGO provides the Greenhouse Challenge Factors and Methods Workbook for the calculation of greenhouse gas emissions 5. Westpac also refers to the VFU framework for guidance on reporting direct environmental impacts, as well as GRI, EPI-Finance and the principles of the Global Compact. Westpac is part of the project group reviewing the VFU standard for environmental reporting for financial institutions 6 and is currently Co-Chair of the UNEPFI/GRI Working Group reviewing environmental performance indicators for the finance sector 7. Westpac publishes this information, along with additional data on our environmental impact, in the environmental component of our annual Stakeholder Impact Report 8. All data collected for the Greenhouse Challenge and the Stakeholder Impact Report is verified by an independent environmental auditor as part of the full assurance of the Stakeholder Impact Report. In 2005, Westpac will be engaging a consultant to review and revitalise Westpac s Environmental Management System, including the setting of new targets and objectives for reducing our environmental impact. Westpac is already committed to reducing greenhouse gas emissions by 5% on an annual basis through energy saving initiatives and programs such as the Great Paper Challenge. 4 Westpac s 2004 Progress Report is available here: 5 The latest workbook is available on their website at 6 More information available at: 7 More information available at: 8 Refer to pages and of Westpac s 2004 Stakeholder Impact Report for more information. 9

10 6. Products and services: Do you estimate the emissions associated with: - Use and disposal of your products and services? - Your supply chain. - Other indirect emissions (e.g. business travel) As a financial services company, there are a number of different ways in which Westpac either directly measures carbon emissions arising from our products and services, or takes into account associated emissions. Within our environmental reporting, Westpac includes emissions arising from paper consumption 9. The total paper tonnage figure includes paper consumption arising from the promotion and distribution of our products and services, in areas such as account statements, Public Disclosure Documents, Terms and Conditions booklets, promotional and marketing material and investor-related information and public reporting such as our annual financial reporting. Through the Great Paper Challenge, we have in place initiatives to either directly reduce paper consumption or to encourage our customers or investors to reduce total paper consumption by choosing to receive statements or publications electronically. We also seek to offset emissions arising from paper consumption by providing environmentallylinked incentives to encourage customers or shareholders to elect to choose documentation electronically. Westpac also includes within our annual environmental reporting, emissions data arising from business travel. Presently this relates specifically to car fuel. Westpac is currently participating in a project run through the Australian Greenhouse Office within the Federal Department of Environment and Heritage, testing an online tool aimed at calculating greenhouse gas emissions arising from corporate air travel in Australia. We will be incorporating this into our total greenhouse gas reporting in the future. Through our partnership with WorkVentures Australia, we have established a disposal service for our superseded computer equipment to ensure that nothing goes to landfill. WorkVentures is a not-for-profit organisation seeking to create affordable access to technology for disadvantaged families and community groups. Our donated computers are stripped to parts, then reassembled into refurbished units that are sold to the general public at a discounted rate. In the year to 30 September 2004, Westpac donated 8,500 PCs to WorkVentures 10. Around 50% of the computers we donated could not be refurbished, and are subsequently recycled to ensure that no part of our old computers goes to landfill. As a service business we recognise that many of Westpac's social, ethical and environmental impacts reside as much in our supply chain as in our own activities. As such, Westpac has established a Sustainable Supply Chain Management Framework 11 to positively influence our mutual social, ethical and environmental performance. 9 Please refer to our 2004 Stakeholder Impact Reprot. 10 For more information on WorkVentures, please go to: 11 The full policy document is available on our internet site at: 10

11 Specifically, we seek to ensure that: our suppliers are aware of the specific environmental, social and ethical issues, and risks and opportunities of relevance to their operations and products they have management systems in place to address these issues, risks and opportunities these systems are delivering effective performance management and improvement. Progress on implementing this framework is published in our annual Stakeholder Impact Report, and available on our website 12. Anecdotally, we have received very positive feedback that this approach is influencing companies in our supply chain in improving their own environmental and social performance. Westpac has sought to pursue better greenhouse emission outcomes through our purchasing habits. As discussed earlier, the 2004 re-negotiation of Westpac s electricity contract has seen the introduction of 4.1% of Green Power into Westpac s overall energy mix. Westpac has also signed up to becoming a Leader in the 3 CBD s Greenhouse Initiative, developed by Sydney, North Sydney and Parramatta City Councils, although we will also be applying this approach to our property portfolio nationally. This involves: an annual Australian Building Greenhouse Rating (ABGR) of our buildings and tenancies; seeking to achieve and maintain a 5 star ABGR tenancy rating, where cost effective; and procurement of accredited green power to further improve our greenhouse performance. Westpac is also looking to take into account the indirect emissions arising from our financial products and services, both in terms of managing embedded risk and by promoting more environmentally responsible behaviour through our investment activities. In June 2003, Westpac Banking Corporation joined nine leading banks from seven countries in announcing adoption of the "Equator Principles," a voluntary set of guidelines which have been developed for managing social and environmental issues relating to the financing of development projects. Today, there are approximately 30 signatories to the Equator Principles, which cover more than 80% of the global projectfinancing market. In adopting the Equator Principles, Westpac has undertaken to provide loans only to those projects whose sponsors can demonstrate to the satisfaction of the bank their ability and willingness to comply with comprehensive processes aimed at ensuring that

12 projects are developed in a socially responsible manner and according to sound environmental management practices. Specific Equator procedures have been embedded within the Project and Structured Debt procedural manual and the Equator Principles are being applied to all project finance transactions being considered by the bank 13. More broadly, environmental risk is addressed within our credit policy, where climate change related risk considerations are taken into account when evaluating lending proposals. We also aim to avoid involvement in assets or businesses which pose or might pose a material risk to health, the environment or the community or which are likely to have a diminished value when environmental clean-up costs are taken into account. Training on evaluating environmental risk is included in the risk assessment component of credit training. As the market becomes more sophisticated in terms of understanding the specific economic impacts of carbon risk, and in understanding how a differential pricing regime around climate change issues could be valued, we believe that management of carbon risk will eventually be embedded within the standard risk matrix for both lending and investment. Through our wealth management business BT Financial Group, Westpac currently seeks to differentiate on environmental and social performance through our extensive range of SRI products. With some of the largest and best performing SRI products in the Australian market, we offer investors two types of SRI products. The first uses a Best of Sector approach, supporting the most sustainable company within each industry sector as determined independently by Monash Sustainability Enterprises (MSE). The second involves a screening approach, both positive and negative, which allows investors to either actively avoid or support certain industries or areas of investment 14. Specifically, within our total range of SRI products we offer the BT Institutional Australian Eco Share Fund. This product applies a Best of Sector approach and only invests in those companies which operate in a more environmentally responsible manner. We select companies for inclusion in this fund on the basis of eco ratings, which are undertaken by Monash Sustainability Enterprises and which rank the environmental performance of companies within each Australian Stock Exchange (ASX) industry sector. The Westpac-Monash Eco Index is Australia s first index of share price performance for leading eco-related listed companies. MSE s environmental assessment considers the extent to which: a company addresses environmental management as a strategic concern; sound environmental management is integrated into day-to-day business management processes, systems and functions; 13 Detailed information on our progress in the implementation and application of the Equator Principles at Westpac is available on our website at: 14 More information on the full range of SRI products is available at: 12

13 a company demonstrates the implementation of best practice environmental techniques, technologies and product design; and a company demonstrates the capacity to engage key stakeholders in relation to key environmental impacts. As discussed previously, we also offer institutional investors the Governance Advisory Service (GAS) an overlay research and advisory service offered to institutional investors wanting to address potential exposure to social, environmental and corporate governance risk in their Australian equities portfolios. GAS is not a screening exercise, rather a constructive engagement process to encourage best practice investment governance around social, ethical, governance and environmental management. 7. Emissions reduction: Do you have emission reduction programmes in place? As detailed above, in the year to 30 September 2004, our total greenhouse gas emissions were 136,400 tonnes of CO2 emissions, down from 137,200 tonnes last year. Westpac maintains an annual aspiration target of reducing greenhouse gas emissions by 5%, as stated on page 39 of our 2004 Stakeholder Impact Report. Beneath this overarching goal are a number of specific programs and initiatives designed to meet this target around energy consumption, paper consumption and fuel consumption. The inclusion of our wealth management business BT Financial Group in our environmental reporting has resulted in a spike in energy consumption over the last two reporting periods, which is particularly significant for our environmental impact given that energy consumption accounts for over 90% of Westpac s total greenhouse gas emissions. Consequently, the 2004 re-negotiation of Westpac s electricity contract has seen the direct incorporation of energy reduction targets into our contractual agreement, as well as the introduction of Green Power into Westpac s overall energy mix. This will result in annual savings of around 5,312 tonnes of greenhouse gas emissions per year, as well as a reduction in annual energy bills by around AU$330,000. In 2006, Westpac will be relocating from our current eleven Sydney CBD corporate office locations down to two sites our new corporate headquarters Our Great Place - and our current headquarters at 60 Martin Place. Our Great Place is the largest corporate construction currently in progress in Australia and aims to be at the forefront of ecological building design and management. We are targeting a four-star Australian Greenhouse Building Rating (ABGR), including energy efficiency in our building design and management, internal fit-out and through the provision of environmentally friendly technology support for our people. At the same time, we have conducted a comprehensive review of our Martin Place building to better understand how we currently operate in the building and to identify various initiatives to reduce energy consumption. We expect this consolidation will have 13

14 a significant effect on our current energy performance, but will continue to identify new opportunities in other areas of our business through the review of our EMS. We continue to improve our paper consumption performance through the Great Paper Challenge, an internal program designed implemented in 2003 to reduce paper consumption. In 2005 the specific targets underlying the Great Paper Challenge are to reduce total paper consumption by 5% and increase paper recycling by 2.5%. This involves numerous initiatives around reducing printed corporate and marketing material, both in terms of volume and weight, as well as the implementation of a single national recycling provider. Within the last reporting period, total paper consumed was down from 5,230 tonnes in 2003 to 4,700 tonnes in We continue to transfer our corporate car fleet over from petrol to LPG gas, resulting in ongoing savings in greenhouse gas emissions. In 2004, Westpac introduced reporting on air travel for the first time into our environmental reporting within our Stakeholder Impact Report. Through our 2005 review of the Westpac EMS, we will be looking to continue to set detailed targets and objectives aimed at minimising our environmental footprint as well as increasing organisational cost efficiency. 8. Emissions intensity: Do you measure emissions intensity against production, sales or other output measures? Westpac measures emissions intensity against a number of measures, both in terms of total emissions but also with regard to our major areas of impact. This are detailed within our 2004 Stakeholder Impact Report for the reporting period to year end September 2004, and also includes historical data from A sample of these are detailed below. Eco performance ratios CO2/person CO2/M CO2 paper/employee CO2 car fleet/veh Westpac also publishes information on the specific components of total greenhouse gas emissions, such as electricity and paper consumption per employee, as well as Kilolitres of fuel consumed per vehicle. Specific targets, as discussed previously, have been set 15 Information publicly available here: 14

15 around driving performance in these specific streams in order to improve overall eco performance ratios. Going forward, Westpac is looking at relating measures of environmental performance more explicitly to financial performance. We are currently looking at various eco accounting models with a view to adopting measures of greenhouse intensity against traditional financial indicators, as a means of demonstrating genuine eco-efficiency. 9. Energy costs: What percentage of your total revenue is represented by the costs of fossil fuels and electric power? The percentage of Westpac s total operating revenue represented by the cost of fossil fuels and electric power for the period was 0.08%. This is comprised of energy (including electricity and gas but not green power purchased) and car fuel (both petrol and LPG). Total operating revenue is AU$18,126m, as indicated on page 78 of the Westpac 2004 Concise Annual Report. Westpac purchases an additional 5,000 MWH of Green Power, comprising 4.1% of our total energy mix of 122,000MWH. 15