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Banking on the Future: 'Consumer Brandwidth'

By Joss Tantram on March 09, 2010 at 3:37pm.


The WestPac Group is a major Australian Banking Group with operations across Australia, New Zealand and the Pacific. The Group has 10 million customers across its areas of operation and conducts its activities through a number of brands, providing services including retail and investment banking, investment management, asset management and wealth management and home loans.

The Group has been subject to significant change in 2009, including the integration of St George, with which WestPac merged in 2008. “Consumer Bandwidth” is the title given to this, the Group’s first integrated Annual Review and Sustainability Report and represents a significant aspect of the Group’s intention for sustainability to be an integrated part of its approach to banking.

The sustainability and responsibility of the banking sector has emerged over the past couple of years as a key point of focus following the global financial crisis. As a result, sensitivity towards the ethics, values and performance of banks has sharpened and expectations have risen accordingly. In addition, environmental and social trends, especially those of climate change, water, financial inclusion and resource availability have continued to represent long-term sources of changing risk and responsibility irrespective of the financial crisis.

The requirements for increased transparency, responsibility and sustainability have therefore continued to grow and require ongoing, meaningful, activity from banks wishing to adequately reflect the pressures and concerns of customers, stakeholders and investors.

As the recent financial crisis has demonstrated, the banking sector plays a vital role in the maintenance and support of complex, stable economies. In addition, in the wider context of sustainability, banking plays a key gate-keeping role, providing finance and insurance to commercial and industrial activities which can have significant positive and negative impacts upon social and ecological sustainability. In addition, banking has a responsibility towards the short and long term financial security of customers.  An understanding of the financial implications of environmental and social trends is therefore not merely a requirement of responsible banking behaviour but a necessary aspect of the financial success and continuance of banking itself.

So, within this context, how is WestPac doing? The decision to present an integrated Annual Review and Sustainability Report sends a key message on the bank’s understanding and approach to sustainability as an integrated part of mainstream business. This effort is largely successful. The bank demonstrates a mature and creative approach to the true integration of sustainability into business management, whilst also acknowledging that this report represents a step in a long journey, rather than indicating that a destination has been reached.


There are relatively few companies which produce integrated sustainability and annual review reports, still a developing science. I have come across a number of such reports which are integrated in name only, instead representing a ‘ghettoisation’ of sustainability disclosure within a desert of dry financial information. The WestPac report suffers from this to an extent, though the sustainability information it communicates is certainly significant and impressive in scope and approach.

‘Ghettoisation’ of sustainability information in an integrated report occurs when a report presents itself as ‘integrated’ but contains very little or no sustainability information outside the sustainability section. For WestPac this does occur to an extent. Statements from the Chairman and CEO do not mention sustainability explicitly, and whilst the Performance highlights table does include a “Sustainability” section, the only 2 metrics included are “Employee engagement” and “Greenhouse Gas Emissions”. This contrasts with 14 issues noted as ‘material’ for management activity within the materiality section on p29. If these issues are truly considered to be material, they should be reported on as part of overall Performance highlights. In contrast, the bank’s ambition to be a “Global Leader in Sustainability” is one of its 5 overall strategic goals.

However, while ‘ghettoisation’ does occur, the sustainability section of the report indicates a comprehensive and integrated approach to sustainability & management which leads me to believe that ‘ghettoisation’ is not management intent, but perhaps a function of how the report is organised.

Why would an accusation of ‘ghettoisation’ not be justified?
The key aspects in seeking to assess the approach of a company to sustainability are:
1) evidence of sustainability governance as an integrated part of overall governance
2) as an aspect of the core responsibilities of executive management
3) as an integrated part of risk management and product development in addition to an acknowledgement that a sustainable future relies upon companies acting beyond the strict boundaries of the business to seek to influence and support wider economic and social change.

Each of these aspects is covered within the sustainability section of the report. The bank organises its approach into 6 focus areas, as follows: Going Mainstream (integration into products and services); People & Places (responsible banking and community engagement); Tread Lightly (direct operational impacts); Climate Change (helping customers and employees to move to a low carbon economy); Speaking Out (influencing beyond the boundaries of the company) and Solid Foundations (corporate governance, risk management, values and ethics).

The report covers each of these areas of focus in a number of ways, discursively in terms of management activities and approach, and also in the form of objectives within each focus area for 2010 and 2013.

So, as a critical reviewer of reports, what did I think about the credibility of the approach and information disclosed?  I was very impressed! When reading through sustainability reports I usually note down questions raised by the information included. If a report raises more questions than it answers then a credibility gap is created. In the case of this report any questions raised early on in the report were answered by the depth of information provided within the sustainability section.

This is not to indicate that WestPac (like any other big bank) is actually sustainable. However it does seem to have understood the fundamental implications of environmental and social issues as strategic issues and appears to be responding accordingly.

This includes references to a number of external benchmarking and other initiatives as an indicator of the overall performance of the organisation, such as DJSI recognition of the bank as a “Global Leader”, inclusion in FTSE4Good and the Climate Disclosure Project Climate Leaders Index and a number of other examples. In addition, the report references the use of the GRI G3 Guidelines and also the use of the GRI Financial Services Sector Supplement to A+ level.

The company, although not the report, has an independent Assurance review written by Banarra following the AA1000 AS methodology. This statement is available on the web, though not in the printed report.


For such a comprehensive approach, the report is actually quite easy to read, with a number of clear graphics and tables. However, one personal criticism I have is the use of photos with speech bubbles. As many of the people in the photos are gazing off camera, the notion that they are actually talking to each other is wildly implausible.


WestPac’s report does struggle, as the majority of such reports do, with being truly “integrated”. However, once you get into the sustainability section itself, the integration of efforts and activities does shine through as a serious priority for the bank’s leadership, senior management and (increasingly) employees, partners, suppliers and stakeholders.

It is still possible, even now, to find sustainability and responsibility reports from the banking sector which avoid the big issues, ignore the fundamental role that banking and investment will make in securing a sustainable future and pretend that minor community investment and education activities represent meaningful corporate responsibility.

In contrast I found that this report takes a sober and systematic approach to the ongoing business of evolving an organisation to understand, prioritise and integrate sustainability issues into business as usual. Many banks could learn some valuable lessons from this report.


§ Integrate a greater number of material issues into overall corporate Performance Highlights section.
§ Specifically note issues for consideration highlighted by stakeholders.
§ Develop and disclose a carbon intensity figure for investments and assets managed.
§ Include the sustainability Assurance statement in the printed report

Joss Tantram, Partner – Corporate Sustainability, Terra Consult.
Joss is a specialist in strategic sustainability management consulting. A member of the British Standards Institution (BSI) Technical Committee SDS/1 representing the UK in the development of the forthcoming international Social Responsibility Standard ISO 26000,  Joss designed and is a Director of WWF International’s One Planet Leaders global executive development programme.
For more info see: www.terra-consult.co.uk