Westpac Banking Corp

Our Position Statement and Action Plan are governed and managed in line with our sustainability governance and oversight structure. For further details, refer to the sustainability governance and risk management section of our Annual Report. We will also report progress against our Action Plan as part of our annual climate-related disclosures. [...] We seek to engage with government, industry and business associations. We aim to identify and collaborate with industry groups on initiatives that align with our principles and ambition to become a net-zero, climate resilient bank. We continue to review our membership of industry associations and their advocacy activity with regards to climate change in line with our Industry Association Principles.

#### GOVERNANCE

###### Sustainability governance

Under its Charter, the Board is responsible for considering the social,
ethical and environmental impact of the Westpac Group's activities,
and for setting standards and monitoring compliance with Westpac's
sustainability policies and practices.

The day-to-day management of Westpac's approach to climate is the
responsibility of the CEO and is delegated to Group Executives and
senior management where appropriate.

Our climate governance, including details on Board sustainability
oversight, Board committee and agenda items discussed in FY24
along with the role of management in sustainability matters,
is detailed in the Sustainability Governance section of our
[Annual Report.](https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/ic/wbc-annual-report-2024.pdf)

A summary of Westpac's sustainability governance structure is
presented in Figure 2 opposite. This includes certain management
committees that support management in its climate-related
decision making.

###### Executive remuneration

Our Group Short Term Variable Reward (STVR) Scorecard includes a
climate-related measure in determining the remuneration for the CEO
and certain Group Executives.

The measure is to 'Deliver the climate transition plan'. This is included
as part of the broader 'Strategic execution' key priority area.

The three measures used to assess progress in FY24 were:

- The number of 2030 targets set for NZBA carbonintensive sectors;

- The number of top emitters engaged on transition plans; and

- Performance against our annual plan of the 2030 Sustainable
Finance Target.

R f t th R ti R t i A [l R](https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/ic/wbc-annual-report-2024.pdf) t f

**FIGURE 2: OVERVIEW OF BOARD AND MANAGEMENT LEVEL OVERSIGHT AND MANAGEMENT OF**
**SUSTAINABILITY- AND CLIMATE-RELATED ISSUES**

**BOARD LEVEL**

**Board**

**Board Risk Committee** **Board Audit Committee** **Board Remuneration Committee**

**MANAGEMENT LEVEL**

**Executive Team**

**Group Executive Risk Committee** **ESG & Reputation Committee**

**Group Credit Risk** **Divisional Risk**
**ESG Council**
**Committee** **Committees**

**Climate Change Credit Risk** **Customer & Transaction Risk**
**Committee** **Escalation Committee**

**GROUP DEPARTMENTS WITH SUSTAINABILITY RESPONSIBILITIES**

**Informs**

**ESG Risk** **ESG Disclosure and Reporting** **Divisions** **Group Sustainability** **Group Property, Procurement**
**and Protective Services**

**KEY**

...

Our targets and approach have undergone internal review and approval, including by the Board and the ESG and Reputation (ESGR) Committee, which is an executive level committee and is chaired by our CEO. As best available science and industry standards evolve and data quality improves, we will update our methodology and target setting approach to continue to align targets and commitments with a 1.5°C pathway. We will continue to monitor, review and revise our targets as required, or at least every five years, in accordance with the NZBA guidelines.

Our Position Statement and Action Plan has been reviewed by the Environment, Social, Governance and Reputation (ESGR) Committee, which is an executive level committee and chaired by our CEO. It has also been approved by the Board. The Board has oversight of our response to climate change. The CEO has overall accountability for the execution of our response to climate change. Management of actions are delegated to the Executive Team as appropriate. [...] We aim to identify and collaborate with industry groups on initiatives that align with our principles and ambition to become a net-zero, climate resilient bank. We continue to review our membership of industry associations and their advocacy activity with regards to climate change in line with our Industry Association Principles.

#### Governance and oversight[6]

Our Framework, including the Targets will be governed and managed in line with our sustainability governance and oversight structure. Refer to the sustainability governance [and risk management section in Westpac Group Annual Report.](https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/ic/WG-AnnualReport-2023.pdf)

Business divisions are responsible for operationalising and applying this Framework, including establishing a process to monitor adherence to the Framework. Business divisions will determine which entities and transactions are eligible, based on the Framework, Taxonomy or industry standards, principles and guidance.

Our targets and approach have undergone internal review and approval, including by the Board and the ESG and Reputation (ESGR) Committee, which is an executive level committee and is chaired by our CEO. As best available science and industry standards evolve and data quality improves, we will update our methodology and target setting approach to continue to align targets and commitments with a 1.5°C pathway. We will continue to monitor, review and revise our targets as required, or at least every five years, in accordance with the NZBA guidelines.

###### Board oversight of climate-related risks and opportunities

The Board approves our key climate change policies such as our updated CCPS and our NCPS as part of their oversight over our sustainability strategy. This is outlined in the Risk Management section of this Report.

The Board and its Committees also receive regular reports from the CEO, Group Executives, and second and third-line risk functions on climate-related matters.

The following is an outline of key climate change related matters that were considered by the Board and its Committees in FY23.

**TABLE 2: KEY CLIMATE-RELATED AGENDA ITEMS FOR THE BOARD AND ITS COMMITTEES IN FY23**

**Board** — Oversight of Sustainability Strategy, including receiving updates on sustainability-related strategic initiatives, the fossil fuels sector, our Sustainable Finance Framework and our Sustainable Finance Targets.

— Received an update on NZBA sector targets in progress including approval of new targets for Residential real estate (Australia), Australian and New Zealand Agriculture, Aviation and Steel Production.

— Approved the refreshed Climate Change Position Statement and Action Plan.

— Participated in a full day of tailored, climate change, natural capital and human rights training conducted by independent consultants.

— Approved Board Risk Appetite Statement, which includes measures related to climate change risks.

**Board Risk Committee** — Approved Sustainability Risk Management Framework.

— Review of the Credit Risk and Reputation and Sustainability risk classes, including how we measure and manage climate risk.

— Approved Credit Risk Management Framework and supporting policies.

**Board Audit Committee** — Updates on sustainability reporting and standards.

— Oversight of Climate Report.

**Board Remuneration** — Recommended new climate change measures for the Group short term variable reward
**Committee** scorecard.

In relation to Board skills, five directors have deep experience and knowledge in the 'Environment & Social' skill category, and three have general working experience and knowledge, as set out in the Board skills matrix in the Strategic Review and Corporate Governance Statement.

We have ESG performance measures in short term variable reward for Executives. This includes measures relating to the Group's Customer Outcomes and Risk Excellence program and to climate change.

This year, we introduced new climate related measures for the CEO and Group Executives that support the implementation of our climate change plans.

|Board|— Oversight of Sustainability Strategy, including receiving updates on sustainability-related strategic initiatives, the fossil fuels sector, our Sustainable Finance Framework and our Sustainable Finance Targets. — Received an update on NZBA sector targets in progress including approval of new targets for Residential real estate (Australia), Australian and New Zealand Agriculture, Aviation and Steel Production. — Approved the refreshed Climate Change Position Statement and Action Plan. — Participated in a full day of tailored, climate change, natural capital and human rights training conducted by independent consultants. — Approved Board Risk Appetite Statement, which includes measures related to climate change risks.|
|---|---|
|Board Risk Committee|— Approved Sustainability Risk Management Framework. — Review of the Credit Risk and Reputation and Sustainability risk classes, including how we measure and manage climate risk. — Approved Credit Risk Management Framework and supporting policies.|
|Board Audit Committee|— Updates on sustainability reporting and standards. — Oversight of Climate Report.|
|Board Remuneration Committee|— Recommended new climate change measures for the Group short term variable reward scorecard.|

--NEW-PAGE--

###### GOVERNANCE

Management of climate-related matters

The day-to-day management of Westpac's approach to climate change is the responsibility of the CEO and is delegated to Group Executives and senior management where appropriate. The CEO and senior management work to integrate the assessment of risks and opportunities of climate change into our operations and ensure our people understand their role in supporting the Group and customers in meeting our collective climate ambitions.

A range of committees help assess climate-related matters and support executive management in their decision making. These are summarised below.

**TABLE 3: COMMITTEES INVOLVED IN ASSESSING/ADVISING ON CLIMATE CHANGE RISKS AND OPPORTUNITIES**

|Environmental, Social, Governance and Reputation (ESGR) Committee|— Chaired by the CEO and meets at least four times a year. — Includes Group Executives of the major operating divisions, the Chief Risk Officer, Group General Council, and senior executives with ESG accountabilities. — Supports the CEO make decisions on significant reputation and ESG-related matters. — Oversees implementation of our Sustainability Strategy and ESG agenda, including climate.|
|---|---|
|Stakeholder Advisory Council (SAC)|— Forum comprising a range of external stakeholders to provide insights and feedback to the CEO and select executives on Westpac's approach to sustainability. — Meets three times per year, topics discussed focus on the pillars of Westpac strategy and purpose, as well as objectives outlined in the Group's Sustainability Strategy. — Helps the Group understand and identify the most pressing issues, emerging ideas and leading practices on environmental, social and governance matters. — Improves the Group's understanding of what a better future means to customers and other stakeholders and how we can help them get there.|
|Climate Change Financial Risk Committee (CCFRC)|— Chaired by the Group Chief Credit Officer and meets at least four times a year. — A sub-committee of the Group's Credit Risk Committee. — Identifies and manages the potential impact of climate-related transition and physical risks on credit exposures. — Has oversight and input on climate-related risk management frameworks and supporting policies and limits. — Monitors aggregate climate-related financial risk exposures and their alignment to the Group's risk appetite.|
|ESG Council|— Chaired by the Chief Executive Business and Wealth and includes senior ESG executives. — Helps prioritise and drive ESG activities across the Group.|
|Divisional risk committees|— Chaired by the relevant divisional Group Executive and includes senior executives and Chief Risk Officer from the division. — Considers material climate change and sustainability risks for the division, including risk profile assessments and risk appetite measures.|

--NEW-PAGE--

Operational management of climate-related matters is delegated to teams across the Group with key responsibilities outlined below.

**TABLE 4: DEPARTMENTS ACROSS THE GROUP RESPONSIBLE FOR SUSTAINABILITY/CLIMATE CHANGE RELATED MATTERS**

**SUSTAINABILITY/CLIMATE-CHANGE RESPONSIBILITIES ACROSS GROUP DEPARTMENTS**

|Group Sustainability|— Develops the Group's sustainability strategy and coordinates the ESG program. — Leads the Group's approach to collaborating with external bodies. — Advises the ESGR Committee and the business on our climate and sustainability strategy and policies, and emerging risks and opportunities.|
|---|---|
|Group Property and Procurement|— Manages the environmental performance of the Group's operations. — Works to reduce the Group's direct environmental footprint. — Supports key suppliers with their emissions reduction strategies and considers supplier climate strategies in key sourcing decisions.|
|ESG Risk|— Line 2 risk function under the Group's three lines of defence operating model (see FY23 Annual Report for more information). — Provides oversight and challenge of the management of sustainability risk in conjunction with other Line 2 teams (risk class owners, Divisional Chief Risk Officers). — Sets the Group's approach for sustainability risks, including related frameworks and policies. This includes the Sustainability Risk Management Framework (SRMF).|
|ESG Disclosure and Reporting|— Coordinates external sustainability reporting. — Works to improve the Group's alignment with ESG related standards. — Operates within Group Finance seeking to apply the same rigour to ESG reporting as financial reporting.|
|Divisions|— Manage climate risk in their division and seek transition opportunities. — Determine NZBA targets and baselines and reports on progress. — Discuss transition plans with customers/industry groups. — Engages with customers and/or industry groups on development of transition plans. — Assesses ESG risks for suppliers/customers/transactions (if required) including escalation to the Customer and Transaction Risk Escalation Committee (Institutional customers). — Coordinates sustainable finance for institutional and business customers. — Provides sustainable finance insights to internal and external stakeholders. — Coordinates divisional ESG training. — Keeps management teams abreast of emerging ESG matters. — Our Sustainability team in WNZL also manage the separate New Zealand reporting requirements and ESG and climate-related reporting to the WNZL Board.|

### Industry Association Principles of Engagement

* We generally seek broad alignment with the policy positions of, and any advocacy/lobbying by the key industry associations;
* Membership does not preclude Westpac from taking different policy positions to those associations, particularly where we believe that our position is in the best interests of our customers, shareholders, employees and the economy more broadly;
* When our position varies significantly to an industry association, we engage directly with the leadership of that association; and
* We regularly review our memberships of industry associations to ensure our participation meets the expectations of our broader stakeholders.

###### Board oversight of climate-related risks and opportunities

The Board approves our key climate change policies such as our updated CCPS and our NCPS as part of their oversight over our sustainability strategy. This is outlined in the Risk Management section of this Report.

The Board and its Committees also receive regular reports from the CEO, Group Executives, and second and third-line risk functions on climate-related matters.

The following is an outline of key climate change related matters that were considered by the Board and its Committees in FY23.

**TABLE 2: KEY CLIMATE-RELATED AGENDA ITEMS FOR THE BOARD AND ITS COMMITTEES IN FY23**

**Board** — Oversight of Sustainability Strategy, including receiving updates on sustainability-related
strategic initiatives, the fossil fuels sector, our Sustainable Finance Framework and our
Sustainable Finance Targets.

— Received an update on NZBA sector targets in progress including approval of new targets
for Residential real estate (Australia), Australian and New Zealand Agriculture, Aviation and
Steel Production.

— Approved the refreshed Climate Change Position Statement and Action Plan.

— Participated in a full day of tailored, climate change, natural capital and human rights training
conducted by independent consultants.

— Approved Board Risk Appetite Statement, which includes measures related to climate
change risks.

**Board Risk Committee** — Approved Sustainability Risk Management Framework.

— Review of the Credit Risk and Reputation and Sustainability risk classes, including how we
measure and manage climate risk.

— Approved Credit Risk Management Framework and supporting policies.

**Board Audit Committee** — Updates on sustainability reporting and standards.

— Oversight of Climate Report.

**Board Remuneration** — Recommended new climate change measures for the Group short term variable reward
**Committee** scorecard.

In relation to Board skills, five directors have deep experience and knowledge in the 'Environment & Social' skill category,
and three have general working experience and knowledge, as set out in the Board skills matrix in the Strategic Review
and Corporate Governance Statement.

We have ESG performance measures in short term variable reward for Executives. This includes measures relating to the
Group's Customer Outcomes and Risk Excellence program and to climate change.

This year, we introduced new climate related measures for the CEO and Group Executives that support the
implementation of our climate change plans.

|Board|— Oversight of Sustainability Strategy, including receiving updates on sustainability-related strategic initiatives, the fossil fuels sector, our Sustainable Finance Framework and our Sustainable Finance Targets. — Received an update on NZBA sector targets in progress including approval of new targets for Residential real estate (Australia), Australian and New Zealand Agriculture, Aviation and Steel Production. — Approved the refreshed Climate Change Position Statement and Action Plan. — Participated in a full day of tailored, climate change, natural capital and human rights training conducted by independent consultants. — Approved Board Risk Appetite Statement, which includes measures related to climate change risks.|
|---|---|
|Board Risk Committee|— Approved Sustainability Risk Management Framework. — Review of the Credit Risk and Reputation and Sustainability risk classes, including how we measure and manage climate risk. — Approved Credit Risk Management Framework and supporting policies.|
|Board Audit Committee|— Updates on sustainability reporting and standards. — Oversight of Climate Report.|
|Board Remuneration Committee|— Recommended new climate change measures for the Group short term variable reward scorecard."

"###### GOVERNANCE

Management of climate-related matters

The day-to-day management of Westpac's approach to climate change is the responsibility of the CEO and is delegated
to Group Executives and senior management where appropriate. The CEO and senior management work to integrate the
assessment of risks and opportunities of climate change into our operations and ensure our people understand their role
in supporting the Group and customers in meeting our collective climate ambitions.

A range of committees help assess climate-related matters and support executive management in their decision making.
These are summarised below.

**TABLE 3: COMMITTEES INVOLVED IN ASSESSING/ADVISING ON CLIMATE CHANGE RISKS AND OPPORTUNITIES**

|Environmental, Social, Governance and Reputation (ESGR) Committee|— Chaired by the CEO and meets at least four times a year. — Includes Group Executives of the major operating divisions, the Chief Risk Officer, Group General Council, and senior executives with ESG accountabilities. — Supports the CEO make decisions on significant reputation and ESG-related matters. — Oversees implementation of our Sustainability Strategy and ESG agenda, including climate.|
|---|---|
|Stakeholder Advisory Council (SAC)|— Forum comprising a range of external stakeholders to provide insights and feedback to the CEO and select executives on Westpac's approach to sustainability. — Meets three times per year, topics discussed focus on the pillars of Westpac strategy and purpose, as well as objectives outlined in the Group's Sustainability Strategy. — Helps the Group understand and identify the most pressing issues, emerging ideas and leading practices on environmental, social and governance matters. — Improves the Group's understanding of what a better future means to customers and other stakeholders and how we can help them get there.|
|Climate Change Financial Risk Committee (CCFRC)|— Chaired by the Group Chief Credit Officer and meets at least four times a year. — A sub-committee of the Group's Credit Risk Committee. — Identifies and manages the potential impact of climate-related transition and physical risks on credit exposures. — Has oversight and input on climate-related risk management frameworks and supporting policies and limits. — Monitors aggregate climate-related financial risk exposures and their alignment to the Group's risk appetite.|
|ESG Council|— Chaired by the Chief Executive Business and Wealth and includes senior ESG executives. — Helps prioritise and drive ESG activities across the Group.|
|Divisional risk committees|— Chaired by the relevant divisional Group Executive and includes senior executives and Chief Risk Officer from the division. — Considers material climate change and sustainability risks for the division, including risk profile assessments and risk appetite measures.|

Operational management of climate-related matters is delegated to teams across the Group with key responsibilities
outlined below.

**TABLE 4: DEPARTMENTS ACROSS THE GROUP RESPONSIBLE FOR SUSTAINABILITY/CLIMATE CHANGE RELATED MATTERS**

**SUSTAINABILITY/CLIMATE-CHANGE RESPONSIBILITIES ACROSS GROUP DEPARTMENTS**

|Group Sustainability|— Develops the Group's sustainability strategy and coordinates the ESG program. — Leads the Group's approach to collaborating with external bodies. — Advises the ESGR Committee and the business on our climate and sustainability strategy and policies, and emerging risks and opportunities.|
|---|---|
|Group Property and Procurement|— Manages the environmental performance of the Group's operations. — Works to reduce the Group's direct environmental footprint. — Supports key suppliers with their emissions reduction strategies and considers supplier climate strategies in key sourcing decisions.|
|ESG Risk|— Line 2 risk function under the Group's three lines of defence operating model (see FY23 Annual Report for more information). — Provides oversight and challenge of the management of sustainability risk in conjunction with other Line 2 teams (risk class owners, Divisional Chief Risk Officers). — Sets the Group's approach for sustainability risks, including related frameworks and policies. This includes the Sustainability Risk Management Framework (SRMF).|
|ESG Disclosure and Reporting|— Coordinates external sustainability reporting. — Works to improve the Group's alignment with ESG related standards. — Operates within Group Finance seeking to apply the same rigour to ESG reporting as financial reporting.|
|Divisions|— Manage climate risk in their division and seek transition opportunities. — Determine NZBA targets and baselines and reports on progress. — Discuss transition plans with customers/industry groups. — Engages with customers and/or industry groups on development of transition plans. — Assesses ESG risks for suppliers/customers/transactions (if required) including escalation to the Customer and Transaction Risk Escalation Committee (Institutional customers). — Coordinates sustainable finance for institutional and business customers. — Provides sustainable finance insights to internal and external stakeholders. — Coordinates divisional ESG training. — Keeps management teams abreast of emerging ESG matters. — Our Sustainability team in WNZL also manage the separate New Zealand reporting requirements and ESG and climate-related reporting to the WNZL Board.|