Westpac Climate Bond - Investor Presentation May 2016
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
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
Sustainability strategic priorities Significant achievements
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
• Global banking leader in the Dow Jones Sustainability Index
since 2002. Westpac achieved sector leadership from 2002-
2007, in 2011, 2014 and 2015
$6.3 billion
Invested in CleanTech and environmental
• Assigned a Gold Class ranking in the 2015 RobecoSam services
Sustainability Yearbook reflecting the Group’s position as the
most sustainable bank globally
• Ranked as one of the Global 100 Most Sustainable Corporations
Carbon neutral
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)
•
of the Year in the AB+F Awards 2014
Named Money Consumer Finance Award 2014 Socially
$1.05 billion
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
criteria • Commercial property that meets or exceeds the Climate Bonds Initiative’s (CBI), Climate Bonds Standards (CBS) for low
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
Certification allocated to eligible projects and physical assets or loans made to finance physical
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 PresentationWestpac 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
in the Climate Bond Asset Westpac total • The definition we apply for ‘CleanTech
Pool . and environmental services’ has been
Westpac Climate
Proceeds Loans reviewed by our independent assurance
• Proceeds raised under the Climate Bond
Bond asset pool providers EY Australia, and is publicly
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 –
Governance and oversight Operational production or
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
• EY Australia has provided independent third party assurance 2. Low Carbon Commercial
against the CBS, and will provide ongoing reporting on a half and full year basis Buildings - as certified under the
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 PresentationWestpac Climate Bond
A strong fit to our sustainability strategy
Managing environmental impacts
• Westpac has been measuring and reporting its environmental
impacts since 1996
• The Group has built a strong track record of environmental firsts
and sector leading initiatives in the sustainability sector
• Westpac first published a Climate Change Position Statement and
its first five year action plan in 2008. Since then the Group has
implemented a substantive program of work and is currently
making progress on its 2013-17 sustainability action plan
• In 2013, Westpac launched its five-year Sustainability Strategy,
with a commitment to developing economic solutions to
environmental challenges, including introducing innovative
products and services that support our customers
• Westpac participates in a number of external initiatives to help
• To inform the Westpac Group’s approach to climate change and improve the environmental performance of the business, including:
the environment, the Group undertakes continued engagement
with stakeholders including industry groups and environmental ‒ The Climate Partners Network with the Climate Institute
non-government organisations ‒ UN Global Compact (Founding signatory) (UNGC)
• Westpac Climate Bond is a strong fit with Westpac’s sustainability ‒ Equator Principles (Founding signatory)
strategy:
‒ UNEP FI (Founding signatory)
‒ It provides financing for our customers directly involved in
‒ UN PRI
renewable energy and low carbon projects
‒ Member of Green Bond Principles
‒ It supports the development of the green bond market in
Australia
6 | Westpac Group Climate Bond Investor PresentationCleanTech lending – helping find solutions to
environmental challenges
61% of Westpac’s total energy financing
directed to CleanTech 1
• CleanTech encompasses a range of technology-based products
and services that take advantage of renewable materials and
energy sources, reducing the use of natural resources and limiting
or eliminating emissions and wastes
• Examples include renewable energy, lower emissions from
transportation, energy efficient fuels, Green Star rated
property, forestry, waste processing and agritech solutions
• Westpac continues to explore ways to support investment in this
growing area as well as developing more mainstream products
and services that help households and small businesses tangibly
improve their environmental performance. For example our new
Energy Efficiency Financing Program, in partnership with CEFC, Investing in CleanTech
launched in May 2016
• Westpac committed to making up to $6 billion available to the
• In New Zealand, Westpac NZ partnered with The Greenhouse and CleanTech and environmental services sector by 2017
the New Zealand CleanTech and Environment Network (NZCEN)
to help develop the local sector, hosting a number of events for • We surpassed this commitment two years ahead of schedule, with
overseas investors and undertaking a survey to better understand our lending and investment to this sector at $6.3 billion at
how to support the sector 31 March 2016
• The commitment was surpassed even as we introduced more
stringent criteria for the green buildings, in line with the property
industry’s best practice trends
1 As at 30 September 2015.
7 | Westpac Group Climate Bond Investor PresentationProjects to be financed by Climate Bond proceeds
Customer State Sector Description Example Climate Bond Project
Gunning Wind Energy Wind
Owners
NSW Direct lending and refinancing of existing wind farm
Developments Pty Ltd Generation
Wind Gunning Wind Energy Developments
Collgar Wind Farm WA Direct lending and refinancing of existing wind farm
Generation
Pyrenees Wind Energy Development
VIC Wind (Waubra Wind Farm)
Oaklands Hill Wind Farm Direct lending and refinancing of existing wind farm
Generation
Wind
Hallett 4 Wind Farm SA Direct lending and refinancing of existing wind farm
Generation
Wind
Hallett 5 Wind Farm SA Direct lending and refinancing of existing wind farm
Generation
Pyrenees Wind Energy Wind
VIC Direct lending and refinancing of existing wind farm
Developments Pty Ltd Generation
Wind
Wind Farm 1 AUST Direct lending and refinancing of existing wind farm
Generation
ATO Adelaide – Charter Low Carbon Collgar Wind Farm
SA Green Property Asset, 5 Star NABERS rating
Hall Comm Prop
Walker Collins St Building Low Carbon
VIC Green Property Asset, 5 Star NABERS rating
4B Trust Comm Prop
Horizon MP Management Low Carbon
QLD Green Property Asset, 5 Star NABERS rating
Pty Ltd (70 Eagle Street) Comm Prop
Low Carbon
Green Building 1 AUST Green Property Asset, 5 Star NABERS rating
Comm Prop
Low Carbon
Green Building 2 AUST Green Property Asset, 5 Star NABERS rating
Comm Prop
Total 534.5 m Property Green Property Asset, 5 Star NABERS rating
Total 506.5 m Wind Direct lending and refinancing of existing wind farm
8 | Westpac Group Climate Bond Investor PresentationFunding strategy focuses on stable and diverse sources of funds
Stability Stable funding ratio as at 31 March 2016 (%)
• The Westpac Group’s funding strategy focuses on using stable
sources to fund asset growth: 83.3%
7.4 Wholesale Onshore 1yr
funding to total funding) of >75% Securitisation
‒ At 31 March 2016, the Group’s SFR was 83% 60.0 Equity
Customer deposits
Diversity
1H16
• To support the Group’s funding profile, Westpac is a regular issuer
in wholesale term markets and aims to:
Diverse and flexible funding capabilities
‒ Provide the bank with stable and efficiently priced wholesale
funding within the Group’s liquidity risk appetite ECP/ECD
EMTN
‒ Build a broad investor base
‒ Maintain funding flexibility and diversity. Diversity is assessed SEC Shelf
from a number of perspectives including: Samurai/
Uridashi
USCP/USCD
Currency USMTN
Retail and wholesale markets Covered Bonds
NCD
Debt product types and maturity term TCD/MTN
RCD
Debt investor types and geographical location MTN
Short Term Debt Long Term Debt
9 | Westpac Group Climate Bond Investor PresentationInformation for investors
Contact our global funding team
Curt Zuber
Treasurer, Westpac Banking Corporation
+61 2 8253 4230
czuber@westpac.com.au
Joanne Dawson
Deputy Treasurer, Westpac Banking Corporation
+61 2 8204 2777
joannedawson@westpac.com.au
Guy Volpicella
Executive Director, Structured Funding and Capital
+61 2 8254 9261
gvolpicella@westpac.com.au
Alexander Bischoff
Executive Director, Global Funding
+61 2 8253 4314
abischoff@westpac.com.au
Richard Salmon
Associate Director, Global Funding
+61 2 8253 4314
rsalmon@westpac.com.au
Jacqueline Boddy
Director, Debt Investor Relations
+61 2 8253 3133 Visit us at
jboddy@westpac.com.au www.westpac.com.au/investorcentre
or Bloomberg WBCT
10 | Westpac Group Climate Bond Investor PresentationYou can also read
