Westpac ESG Update

ASX
Release


21 September 2021

ESG Market Update

Westpac Banking Corporation (“Westpac”) today provides the attached ESG Market
Update.










For further information:

David Lording Andrew Bowden
Group Head of Media Relations Head of Investor Relations
0419 683 411 0438 284 863


This document has been authorised for release by Tim Hartin, General Manager & Company
Secretary.



Level 18, 275 Kent Street
Sydney, NSW, 2000

ESG
market update
Fix. Simplify. Perform.
21 SEPTEMBER 2021
WESTPAC BANKING CORPORATION
ABN 33 007 457 141

Session overview.
2Westpac ESG Update - September 2021
Social
Governance
Environment
•Building diversity
•Support for vulnerable customers
•Approach to human rights and modern slavery
•Strengthening risk governance
•Strengthening risk management and risk culture
•CORE program progress
•Climate change principles and actions
•Assessing pathways to net zero
•Supporting customers in transition to a low carbon future
Peter King
Carolyn McCann
Anthony Miller
Siobhan Toohill

Further integrating ESG into our strategy.
Strategic
Priorities
Values
HELPS
HelpfulEthicalLeading ChangePerformingSimple
Purpose
Markets,
products,
customers
Helping Australians and New Zealanders Succeed
Banking for consumer, business and institutional customers
SIMPLIFY
Sustainable long-term returns
•Customer service – market leading
•Growth in key markets
•Reset cost base
•Enhance returns, optimise capital
•Strong balance sheet
•Climate change -focus on net zero
Streamline & focus the business
•Exit non-core businesses
and consolidate international
•Reduce products, simplify customer
offers
•Lines of Business operating model
•Transform using digital and data to
enhance the customer experience
Address outstanding issues
•Risk management
•Risk culture
•Customer remediation & pain points
•IT complexity
FIXPERFORM
Added climate
change as a
strategic priority
Westpac ESG Update - September 2021
3

Governance
Peter King
Chief Executive Officer

Westpac’s Board and Committee structure.
Westpac ESG Update - September 2021
5
Governance
Independent Assurance and Advice
External
Auditors
Group
Audit
Independent
Assurance and
External advice
Chief Executive Officer
Group Executives
Accountability
Accountability
Delegation
Delegation
Delegation
Assurance,
Oversight
through
Reporting
Board Committees
Nominations &
Governance
AuditTechnology
Legal, Regulatory &
Compliance
Assurance on remuneration
disclosures
Assurance on risk components
of financial reports
Periodic assurances and reports
(as appropriate)
Specific reporting
Sub-Committee
RemunerationRisk
Sub committee, focusing on
legal, regulatory and
compliance matters,
including financial crime
Role expanded to include
corporate governance
More granular oversight of risk
classes, including sustainability risk
BOARD

STRENGTHENING
MANAGEMENT OF RISK
NEW OPERATING MODELRESETTING OUR PORTFOLIO
Fundamentally changing our business and how we operate.
Westpac ESG Update - September 2021
6
Governance
• Focus on banking in Australia and NZ
‒Exiting wealth and insurance and
other specialist businesses
‒Consolidating international presence
• New strategic priorities: Fix, Simplify,
Perform
• New purpose and values
• Clarity on behaviours expected
• Introduced Lines of Business (LOBs)
operating model
‒Westpac is now structured along key
lines of business, such as:
mortgages, business lending,
financial markets, global transaction
services
‒Creates end-to-end accountability
‒Improves control over processes
• Customer Outcomes and Risk
Excellence (CORE) program improving
‒Risk culture, accountability
‒End-to-end management of risk
‒Three lines of defence
‒Data quality
‒Oversight and execution
•Working with regulators to accelerate
the closure of outstanding investigations

Customer Outcomes and Risk Excellence (CORE) program.
1. At 30 June 2021, Submitted to Promontory Australia for signoff.
7
• Strengthening risk governance, accountability and risk culture
• 19 workstreams, 80 deliverables and 327 activities
• Group Executive accountability, including remuneration
• Quarterly independent assurance by Promontory Australia
Almost one third of CORE activities submitted
1
104
CompleteTotal
Governance
Delivery of activities yet to be submitted
40
80
160
120
200
240
280
SepSepMarJunSepMarJunDecJunDecMarDec
CY2021CY2022CY2023
~95% of Design
activities complete
~95% of Implement
activities complete
100% of Embed
activities complete
Design
Implement
Embed
Westpac ESG Update - September 2021
Classification of activities
327

Strengthening the management of risk via CORE.
Changes to
Board &
Board committee
structures
implemented
Governance
STRONGER
OVERSIGHT AND
IMPROVING EXECUTION
CULTURE AND CLEAR
ACCOUNTABILITIES
7,600employees
completed Risk
Fundamentals workshops

END-TO-END RISK
MANAGEMENT
Standardisedkey risk
dashboards
, for reporting
to Executive team and Board.
Includes enterprise, non-
financial and culture
dashboards

EMBEDDING THREE
LINES OF DEFENCE
(3LOD)
Strengthened First Line
risk ownershipand
accountability

DATA QUALITY AND
MANAGEMENT
Improved risk reporting via new
Insights
Platform

600
have Statements of Accountability
improving role clarity, prioritisation
and decision making.
senior
leaders
97%of employees
completed risk learning
modules
Updated Code of Conduct
to include the “Should We”
test to help employees’
decision making
Introduced a
Risk assist chatbot
to respond to risk questions promptly
Key customer
processes mapped
across Consumer, Business and
WIB, to standardise risk management
and reporting
63%
reduction
in high-rated
issues that were
open at the
start of FY21
Updated
Risk classifications
across all LOBs to apply consistently
Added >2,000 people
(from Aug 19)
Developed a
3LODmodel
across risk classes and divisions
Increased clarity
and transferredrisk
responsibilities between First
and Second lines
Improving data through the
dedicated management of
~600
Critical Data Elements
Group
Transformation
Office
•Simplified investment prioritisation
to better consider risks in decision
making
•Consistent project governance
and delivery standards
8
Westpac ESG Update - September 2021

Strengthening culture.
Westpac ESG Update - September 2021
9
Governance
Bureaucratic, complex, and slow
Digitised, simplified, clear and quick
Diffused accountability, poor role clarity
Clarity on roles, clear accountability, empowered
Positive news culture
Objective assessment of current status,
able to constructively challenge
Fear of blame
Safe to speak up – owning the risks
From
To

FinancialCrime capability.
Westpac ESG Update - September 2021
10
Governance
Oversight of change with 88
testing and audit reports
completed. 90% of controls
assessed no change, 10%
opportunity to improve
Delivered over 40,000 hours
of financial crime awareness
training in FY21
Identified critical data points
and established automated
reconciliations and checks
All AUSTRAC statement of
claim items addressed,
remediated over 350 issues
Develop programs of changeImplement changesEmbed in operations
Foundations re-assessed and rebuiltEmbedding change for the future
130 transaction monitoring
rules reviewed with 60 new
rules updated or
implemented
23 technology upgrades /
enhancements to financial
crime systems in FY21
Commenced simplifying data
flows and using analytics to
improve detection
Active in the FintelAlliance,
having cooperated on over
30 projects/ investigations in
FY21
2018-2020
2019-2021
2021 >
Increased specialist
resources by around one
third from 2019
Assessed the risk of >350
products and channels
Upgraded transaction
screening software and
settings to deliver more risk-
sensitive outcomes
Launched projects to simplify
processes and establish
next-generation detection
capabilities

Taking the next step on gender equality.
Westpac ESG Update - September 2021
11
Governance
•Seeking to maintain 50% women in leadership
1
across Westpac
•Recently signed up to 40:40 Vision
2
pledging to achieve a gender
balance of 40:40:20 in Executive leadership by 2030. Targeting to
reach objective by 2027
•Board is also targeting a 40:40:20 objective
ACCELERATING WOMEN’S EQUALITY OUR OBJECTIVES
10
20
30
40
50
60
20102011201220132014201520162017201820192020Now
Women in leadership (WIL) (% of total)
Total Group (WIL)Executive TeamGeneral Manager
1.Targeting equal representation of women
•Seeking to embed representation targets for women in leadership
•Review pathways succession, leadership programs, mentoring
2.Gender pay equity
•Aggregate pay difference across company between 97% to 102% in
FY20 (excluding Executives)
•Detailed job level analysis to address pay gaps >5%
3.Leading on policy
•Increase paid parental leave to 16 weeks (from 13) for primary carers
•Increase paid parental leave to 4 weeks (from 3) for support carers
•Special Paid Parental Leave to support premature births
•Special Paid Parental Leave to support early loss of 5 days
•Reinforcing recruitment requirements including 50:50 gender
shortlists
1 Women in Leadership refers to women in leadership roles. It includes the CEO, Group Executives, General Managers, senior leaders with significant influence on business outcomes (direct reports to General Managers and their direct reports), large (3+) team people
leaders three levels below General Manager, and Bank and Assistant Bank Managers. 2 40:40 Vision is an initiative led by HESTA and supported by various industry partners including some large Australian fund managers, Chief Executive Women, the WorkplaceGender
Equality Agency and ACSI. The 40:40:20 represents 40% female, 40% Male and 20% any gender

Social
Carolyn McCann
Group Executive, Customer & Corporate Relations
Siobhan Toohill
Group Head of Sustainability

INDIGENOUS REPRESENTATION
•Employee Action Group with over 1,000 members with 62 different
cultural heritages that work to promote awareness and inclusion
•Established a Group-wide Leadership Shadowing Program to
promote development
•Feedback informs policies, training and development
Focused on enhancing diversity.
Westpac ESG Update - September 2021
13
Social
•Updating our Reconciliation Action Plan (RAP)
•Refreshed our cultural competency training
•Improved banking accessibility for over 4,500 indigenous and remote
Australians through Yuri Ingkarninthi, our Indigenous Connection Team
•Access to capital for indigenous businesses through our partnership
with First Australian's Capital
•In 1H21 hired 28 permanent employees along with 71 Trainees and 23
Interns under our Indigenous program
CULTURAL DIVERSITY

Helping customers in need of extra care.
14
DOMESTIC & FAMILY VIOLENCEFINANCIAL HARDSHIPFINANCIAL ABUSELIVING WITH DEMENTIA
LIFE MOMENTS
HELP WITH GAMBLINGELDER FINANCIAL ABUSEFRAUD AND SCAMS
• Updated customer vulnerability policy and standard
• Trained over 19,000 staff
• Dedicated customer vulnerability teams
–Accessibility and inclusion team
–Customer vulnerability and financial resilience team
STRENGTHENED CAPABILITY
• Material improvement in complaints management
• New Group-wide complaints management system
Westpac ESG Update - September 2021
Social

Using digital to help protect customers.
15
•24,000 blocks, requiring a change of language (19,000 customers)
•800+ warning letters, suspended, cancelled banking
•70+ customers reported to authorities
ABUSIVE PAYMENTS
Westpac ESG Update - September 2021
•120,000+ visits to the digital gambling block page
•30,000+ consumer debit and credit cards using the block
GAMBLING BLOCK
Social

Respecting human rights.
HUMAN RIGHTS POSITION STATEMENT AND ACTION PLAN
MODERN SLAVERY
Our principles
1.We respect human rights
2.We assess our human rights impacts
3.We integrate human rights considerations into our business and
relationships
4.We provide access to remedy when appropriate
5.We engage with stakeholders on human rights
6.We aim to be transparent and provide accurate and timely disclosure
Recent Actions:
•Released Modern Slavery report under Australian requirements
•Reviewed and updated supplier screening process
•Expanded training to better identify issues and potential risks
•Refreshed ESG Credit Risk Policy
Released first Human
Rights Position Statement
and Action Plan
Published first UK Modern
Slavery Statement
Released 3
rd
Human
Rights Position Statement
and Action Plan
Published first Australian
Modern Slavery Statement
201520202016
First Australian publicly-
listed company to provide
paid parental leave
19952010
Launched first
Reconciliation Action Plan
Westpac ESG Update - September 2021
16
Social

UN guiding principles on human rights -Access to remedy
17
Social
SAFER CHILDREN, SAFER COMMUNITIES
•Roundtable of experts in human rights, child safety, online safety, and law enforcement
•Program is designed to achieve long-term impact in addressing child safety
•Sustained approach based on outcomes and longer-term impact
•Providing $24m to Save the Children Australian and International Justice Mission in the Philippines (over 3 – 6 years)
•Committed $18m funding to 50 organisations in our 2020 and 2021 impact grants rounds
SAVE THE CHILDREN (PHILIPPINES)
(BETWEEN JANUARY – JUNE 2021)
•687 participants trained on online exploitation issues
•2,648 students participated in online safety campaigns
•Policy discussions initiated with 8 government agencies
CHILDREN IN THE PICTURES
(THREE-YEAR IMPACT CAMPAIGN)
•Increasing awareness of the issue of online sexual exploitation
of children
•Educate and empower parents/caregivers to protect children
from online harm
•Remove barriers to identify perpetrators and rescue children
•Providing $1m to support the campaign
Westpac ESG Update - September 2021

Environment
Anthony Miller
Chief Executive, Westpac Institutional Bank

Our commitment and principles on climate change.
Westpac ESG Update - September 202119
Westpac has a long history of action on climate change
Environment
2017
Commenced portfolio
carbon reporting for
BT MySuperportfolios.
1996
Founding
member of the
United Nations
Environment
Program (UNEP).
2008
4-degrees
Climate Scenario
Analysis.
1.5-degrees
Climate Scenario
Analysis.
TCFD
disclosures
published.
Signed Montreal
Carbon Pledge
and endorsed
Global Investor
Statement on
Climate Change.
2015
Commitment
to carbon
neutrality across
our business.
2013
2005
1991
First bank to
join Australian
Greenhouse
Challenge.
One of nine
founding
signatories
to Equator
Principles.
2003
Relationship
with Investor
Group on
Climate Change
established.
First Climate
Change
Position
Statement.
2012
Second Climate
Change Position
Statement.
2014
Commitment to UN
Sustainable Development
Goals and Paris Climate
Agreement.
2017
Signatory to
Climate
Action 100+.
Third Climate
Change Position
Statement &
Action Plan.
2018
2018
2019
2020
Fourth Climate
Change Position
Statement &
Action Plan.
2-degrees
Climate Scenario
Analysis.
2016
A transition to a net
zeroemissions
economy is required
by 2050
Economic growth
and emissions
reductions are
complementary goals
Addressing climate
change creates
opportunities
Climate-related risk
is a financial risk
Collective action,
transparencyand
disclosure matter
The principles underpinning our climate strategy

Our actions on climate change.
20
Westpac ESG Update - September 2021
Environment
On track to reduce our Scope 1 and
2 emissionsby 50% and Scope 3
supply chain emissions by 15%
compared to 2016 baseline for FY21
Committed to source the equivalent
of 100% of our electricity
from renewable sources by 2025
and joined RE100
Supported the development of a new
solar facility as part of our transition
to renewables, creating local jobs in
regional Australia
Increased the share of renewables
in lending to electricity generation
sector, from 59%to 75% since 2016
Lending to climate change solutions
up from $6bn to $10bn since 2016
Developed a range of innovative
products including sustainability-
linked bonds and loans and the
world’s first certified
Green Tailored Deposit.
Reduced the emissions intensity of
lending to electricity sector to one
third of the Australian National
Electricity Benchmark
Applied strong lending standards in
the thermal coal sector, transitioning
lending to focus on metallurgical
coal and high-quality thermal coal,
and ceasing funding for expansion of
thermal coal mining in new basins.
Committed to no thermal coal mining
exposure by 2030
Founding member of the UN
Environment Programme
Finance Initiatives of the
Principles for Responsible
Banking
First Australian bank to support
the Paris Agreement
Founding member of the
Australian Sustainable Finance
Initiative
•Aim to provide $3.5bn of new
lending to climate change
solutions by2023
•Ensure financing to electricity
generation sector supports Paris-
aligned transition pathways to a
net zero emissions economy by
2050
•Continue to support our existing
thermal coal mining customers
1
,
managing our portfolio in line with
a commitment to reduce our
exposure to zero by 2030
•Update our Paris-aligned financing
strategies and portfolio targets,
annually
•Provide products and services to
help customers reduce energy
consumption and improve the
resilience of their homes
•Help communities become more
resilient to climate change and
transition to a low carbon
economy
•Target emissions reductions
for our operations in alignment
with a science-based trajectory
•Support policy outcomes
aligned to net zero emissions
by 2050
OUR ACTIONS AND PERFORMANCE
HELP CUSTOMERS AND
COMMUNITIES RESPOND TO CLIMATE CHANGE
IMPROVE THE CLIMATE CHANGE
PERFORMANCE OF OUR OPERATIONS
SUPPORT INITIATIVES AND POLICIES TO ACHIEVE
THE GOALS OF THE PARIS AGREEMENT

1 Including subsidiaries of existing customers, with thermal coal mining customers defined as those generating more than 25% of revenues from the sale of thermal coal, or in the case of a stand-alone mine, more than 35% of volumes from thermal coal. All other coal mining
or mines are deemed as metallurgical.

42.3
34.5
11.7
1.9
3.6
4.4
1.1
0.1
0.4
Green buildings
Renewable energy projects
Low carbon transport
Adaptation infrastructure
Forestry
Waste
Energy efficiency
Green businesses
Other
2020 TCE
$10.1bn
The transition to net zero – an evolving portfolio
1 Climate solutions definition is available in our 2020 Sustainability Datasheet glossary. 2 The reduction in lending to oil andgas extraction from Sept 2020 includes the consolidation of Westpac’s international operations. 3 Lending to thermal coal mining is 56%
of total coal mining in Westpac Institutional Bank.
21Westpac ESG Update - September 2021
Environment
6.2
6.9
9.1
9.3
10.1
0
2
4
6
8
10
12
20162017201820192020
Up 62%
59%
66%
71%
75%75%
41%
34%
29%
25%25%
Sep-16Sep-17Sep-18Sep-19Sep-20
RenewableNon-renewable
Mining TCE ($bn)
2,3
Climate change solutions exposure (% of TCE)
TCE to climate change solutions
1
($bn)
Lending to electricity generation (% of total)
10.7
6.3
3.9
1.4
10.3
6.3
3.3
0.7
9.0
5.7
2.8
0.5
8.0
5.2
2.3
0.5
TotalNon-fossil fuelOil and gas
Coal - thermal &
metallurgical
Sep-18Sep-19Sep-20Mar-21

Climate portfolio assessment.
1. Intergovernmental Panel on Climate Change (IPCC) RCP8.5 scenario – a high emissions climate change scenario
22
Environment
From 2022....Current position
Assessed emissions intensive sectors
Assessed climate vulnerable parts of our portfolio
Paris-aligned
portfolio
emissions targets
No exposure
by 2030
• New lending customers must publicly disclose
Paris-aligned goals
• Support existing customers to transition
• 0.25t CO
2
e/MWh at Sep 2020
• 0.23t CO
2
e/MWh by 2025
• 0.18t CO
2
e/MWh by 2030
• No new thermal customers
• No new basins
• Criteria for existing customers
Electricity generation
Thermal coal mining
Oil and gas exploration,
extraction and refining
• Helping customers prepare for natural disasters
• Physical risk assessment on Australian mortgage
portfolio under RCP
1
8.5 scenario
• Begun assessing physical risk in Australian
portfolio, focusing on grains, animal protein and
dairy
Develop tools, insights and products to support
• Increased climate resilience
• Energy efficiency upgrades
• Develop strategies to assist customers to meet
the challenges of climate change
Consumer mortgages
Agribusiness
Westpac ESG Update - September 2021
We are seeking to develop Paris-aligned financing
strategies and portfolio targets, particularly for
sectors representing the majority of our financed
emissions. We will work with customers and
industry experts and provide annual updates on
progress that will include consideration of
• APRA's Climate Vulnerability Assessment
• the IEA Net Zero by 2050 Report
• the IPCC Sixth Assessment Report
• the UNEPFI Net Zero Banking Alliance framework
• post COP26 policy settings and outlook
• the impact on the bank and customers, including
in hard-to-abate sectors

Opportunity to support customers in their transition.
23
Environment
• Largest financier to greenfield renewable energy projects in Australia
1
.
Supporting over 24 projects since 2016,powering ~2.7m households
2
• In past 12 months financed 8 greenfield projects, enough to
power 800,000 homes
2
• Using corporate PPAs
3
to support clients from hard-to-abate sectors
including mining, fuel retailing, steel manufacturing and telecommunications
Corporate PPA
We are helping customers transition through arranging debt structures which incentivise
them to achieve ambitious emissions-based targets via pricing.
Notable Transactions
Lead sustainability coordinator for the first
Sustainability-LinkedBond in Australia
Sole sustainability structurerfor sustainability
linked loan fora customer in a hard-to-abate
sector
Westpac ESG Update - September 2021
1 IJ Global. 2 Westpac Research. 3 Power Purchase Agreements.
RENEWABLES FINANCING
SUSTAINABILITY-LINKED FINANCING

Questions
Andrew Bowden
Head of Investor Relations

Disclaimer
Westpac ESG Update - September 2021
25
Disclaimer
The material contained in this presentation is intended to be general background information on Westpac Banking Corporation (Westpac) and its activities.
The information is supplied in summary form and is therefore not necessarily complete. It is not intended that it be relied uponas 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.
Unless otherwise noted, financial information in this presentation is presented on a cash earnings basis. Cash earnings is a non-GAAP measure. Refer to Westpac’s 2021 Interim Financial Results (incorporating the requirements of Appendix 4D)
for the six months ended 31 March 2021 available at westpac.com.au for details of the basis of preparation of cash earnings.
This presentation contains 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 appear in a number of places in this presentation and include statements regarding our intent, beliefor current expectations with respect to our business and operations, macro and micro economic and market
conditions, results of operations and financial condition, including, without limitation, future loan loss provisions, financialsupport to certain borrowers, indicative drivers, forecasted economic indicators and performance metric outcomes.
We use words such as ‘will’, ‘may’, ‘expect’, ‘intend’, ‘seek’, ‘would’, ‘should’, ‘could’, ‘continue’, ‘plan’, ‘estimate’, ‘anticipate’, ‘believe’, ‘probability’, ‘risk’, ‘aim’, 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. Actual results could differ materially from those which we expect, depending on the outcome of various factors. Factors that may impact on the forward-looking statements made include, but are not limited to, those described in
the section titled ‘Risk factors' in Westpac’s 2021 Interim Financial Results (incorporating the requirements of Appendix 4D) for the six months ended 31 March 2021 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. Except as required by law, we assume no obligation 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.