Westpac Climate Bond Investor Presentation May 2016
Disclaimer The material contained in this presentation is intended to be general background information on Westpac Banking Corporation (“Westpac”) and its activities. It does not constitute a prospectus, offering memorandum or offer of securities. It should not be reproduced, distributed or transmitted to any person without the consent of Westpac and is not intended for distribution in any jurisdiction in which such distribution would be contrary to local law or regulation. The information is supplied in summary form and is therefore not necessarily complete. Also, it is not intended that it be relied upon as advice to investors or potential investors, who should consider seeking independent professional advice depending upon their specific investment objectives, financial situation or particular needs. The material contained in this presentation may include information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. All amounts are in Australian dollars unless otherwise indicated. Financial information in this presentation may be presented on a cash earnings basis. Cash earnings is a non-GAAP measure. Refer to Westpac’s 2016 Interim Financial Results (incorporating the requirements of Appendix 4D) for the half year ended 31 March 2016 available at www.westpac.com.au for details of the basis of preparation of cash earnings. Information contained in or otherwise accessible through the websites mentioned in this presentation does not form part of the presentation unless we specifically state that the information is incorporated by reference thereby forming part of the presentation. All references in this presentation to websites are inactive textual references and are for information only. Disclosure regarding forward-looking statements This presentation may contain statements that constitute “forward-looking statements” within the meaning of Section 21E of the US Securities Exchange Act of 1934. Forward-looking statements are statements about matters that are not historical facts. Forward-looking statements may appear in a number of places in this presentation and include statements regarding our intent, belief or current expectations with respect to our business and operations, market conditions, results of operations and financial condition, including, without limitation, future loan loss provisions, financial support to certain borrowers, indicative drivers, forecasted economic indicators and performance metric outcomes. We use words such as ‘will’, ‘may’, ‘expect’, 'indicative', ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘probability’, ‘risk’, ‘forecast’, ‘likely’, ‘estimate’, ‘anticipate’, ‘believe’, or other similar words to identify forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are subject to change, certain risks, uncertainties and assumptions which are, in many instances, beyond our control and have been made based upon management’s expectations and beliefs concerning future developments and their potential effect upon us. There can be no assurance that future developments will be in accordance with our expectations or that the effect of future developments on us will be those anticipated. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results could differ materially from the expectations described in this presentation. Factors that may impact on the forward-looking statements made include, but are not limited to, those described in the section entitled ‘Risk factors’ in Westpac’s 2016 Interim Financial Results for the half year ended 31 March 2016 (or Westpac’s Annual Report for the year ended 30 September 2015) available at www.westpac.com.au. When relying on forward-looking statements to make decisions with respect to us, investors and others should carefully consider such factors and other uncertainties and events. We are under no obligation, and do not intend, to update any forward-looking statements contained in this presentation, whether as a result of new information, future events or otherwise, after the date of this presentation. 2 | Westpac Group Climate Bond Investor Presentation
Sustainability - part of doing business at Westpac Significant achievements Sustainability strategic priorities as at 31 March 2016 1 Help improve the way people work and live as our society changes $116 million (FY15) Westpac’s total community investment, 2 Help find solutions to environmental challenges representing 1.04% of pre-tax profits. Includes community partnerships, fee-free accounts, charitable gifts and volunteer time 3 Help customers to have a better relationship with money for a better life 46% Globally recognised as a sustainability leader Women in Leadership $6.3 billion • Global banking leader in the Dow Jones Sustainability Index since 2002. Westpac achieved sector leadership from 2002- 2007, in 2011, 2014 and 2015 Invested in CleanTech and environmental services • Assigned a Gold Class ranking in the 2015 RobecoSam Sustainability Yearbook reflecting the Group’s position as the most sustainable bank globally Carbon neutral • Ranked as one of the Global 100 Most Sustainable Corporations Maintained carbon neutrality in FY15 and in the World by Corporate Knights for 9 of the last 10 years, achieved electricity and paper reduction targets including being ranked number 1 in 2014 • Named Best Bank in Socially Responsible Performance (ESG) $1.05 billion of the Year in the AB+F Awards 2014 • Named Money Consumer Finance Award 2014 Socially Made available to social and affordable housing Responsible Bank of the Year sector 3 | Westpac Group Climate Bond Investor Presentation
Westpac Climate Bond key features Westpac Climate Bond – key features • Consistent with Westpac’s sustainability approach • Supports our customers in low carbon industries and increases visibility of Westpac’s sustainable loan book Rationale • Supports further development of the green capital market and growing demand for sustainable investments • Funding diversification • Use-of-proceeds bond • Rank as senior, unsecured obligations of Westpac Banking Corporation (AA- / Aa2 / AA-) Format • Issued off the Westpac Australian Domestic Debt Program • Direct obligations of Westpac; no project risk • Expected to be included in the MSCI/Barclays Green Bond Index and the Bloomberg AusBond Composite Bond Index • Proceeds of the Westpac Climate Bond will be used to fund an existing pool of assets ‒ Use of proceeds Renewable energy projects represent 48.7% of asset pool ‒ Green commercial property represents 51.3% of asset pool • Assets selected represent Westpac’s direct financing with each entity Asset selection • Commercial property that meets or exceeds the Climate Bonds Initiative’s (CBI), Climate Bonds Standards (CBS) for low criteria carbon commercial buildings • Westpac will issue a use-of-proceeds bond as certified by the Climate Bonds Initiative • A standard recourse-to-the-issuer debt obligation for which the proceeds shall be allocated to eligible projects and physical assets or loans made to finance physical Certification assets, that comply with the Climate Bonds Standard. The internal tracking and use-of- proceeds and Westpac internal processes have been verified by an independent third party verifier 4 | Westpac Group Climate Bond Investor Presentation
Westpac Climate Bond governance and oversight Allocating Climate Bond proceeds • Westpac has publicly reported on lending and investment to CleanTech • Eligible assets selected for and environmental services biannually the Westpac Climate Bond since 2013 will be identified for inclusion • The definition we apply for ‘CleanTech in the Climate Bond Asset Westpac total and environmental services’ has been Pool . Westpac Climate reviewed by our independent assurance Proceeds Loans Climate Bond • Proceeds raised under the providers EY Australia, and is publicly Bond asset pool bond will go into the Westpac funding pool available general pool of funds, then tagged and allocated to • The Westpac Climate Bond supports two investment in the Climate categories of assets under the Climate Bond Asset Pool Bond Standard: 1. Wind Energy Generation – Operational production or Governance and oversight manufacturing facilities capable of generating 2,400 GWhrs pa and • Progress, outcomes and impacts of the eligible assets will be monitored internally by the estimated emissions reduction of Westpac CleanTech Working Group, a cross-divisional team with responsibility for driving 2m tCO2e progress on Westpac’s CleanTech and sustainability lending objectives 2. Low Carbon Commercial • EY Australia has provided independent third party assurance Buildings - as certified under the against the CBS, and will provide ongoing reporting on a half and full year basis CBS. Westpac’s property portfolio • This provides assurance that policies and procedures associated outperformed the CBI’s benchmark with the ongoing management of the Westpac Climate Bond by around 19% meet the requirements of the CBS • This will be available at westpac.com.au/sustainability 5 | Westpac Group Climate Bond Investor Presentation
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