Climate credentials essential as Westpac eyes green lending boom

When Westpac chief executive Peter King delivered the bank’s results this month, he highlighted the growth in sustainable lending and said the bank was talking to large-emitting clients, and it would have more to say about this in the middle of the year.

‘For us, that’s the opportunity, to be that partner that helps people transition.’

Anthony Miller, Westpac

Yet environmentalists, and some investors, say banks’ lofty climate commitments count for little when lenders continue to finance fossil fuel businesses such as liquified natural gas or oil giants. How does Miller respond to these criticisms?

Much like the big investors who prefer engagement with heavy emitters over divestment, Miller argues banks need to work with “hard-to-abate” sectors to promote change.

“For us, that’s the opportunity, to be that partner that helps people transition. What we don’t want to be is the entity that’s not helping the hard to abate sectors transition, and working on the glamorous, feel-good, net-zero renewable power capabilities – we want to be a part of that, we’re doing that.

“But the most important thing we can do is to help the hard-to-abate sector, hard-to-abate clients, transition.”


Sustainability linked loans – which reward or penalise a customer for meeting non-financial targets – are seen as one part of the response. Sustainable debt issuance, which also includes green bonds and social bonds, jumped three-fold in Australia and New Zealand last year to $US44 billion.

Australian Ethical’s Palmer says these types of loans can indeed serve a useful purpose – though there is a risk they are “window dressing” unless they are linked to “material” climate goals. The Australian Securities and Investments Commission has also stressed it will be looking hard for “greenwashing” in financial products, and Miller stresses the importance of impartial data on a company’s emissions.

Miller was appointed in 2020 to turn around the performance of Westpac Institutional Bank (WIB), which was once vast, but has cut back its operations significantly in recent years.

Westpac last year wrote off all the goodwill in the division to reflect the fact it had become smaller and less profitable. On this, Miller says: “It does reinforce we need to perform and return WIB to its position as a meaningful part of the portfolio and a meaningful part of the Australian market”.

Before Westpac, Miller spent almost two decades in investment banking, including several years as the chief of Deutsche Bank’s Australian business, and a longer stint at Goldman Sachs. Miller, who is married to Gretel and has four children, has lived in Sydney since the late 1990s after attending university in Brisbane. He is the eldest of six children, and two of his siblings have competed at the Olympics.

‘It’s not a surprise we’re seeing wages pressure emerge, perhaps the only surprise is how quickly it has come on.’

Anthony Miller, Westpac

In running the institutional business, Miller has a close-up view of the some of the largest companies in Australia, and how they are affected by big economic shifts including rising inflation, interest rates, and wages.

He says the condition of corporate balance sheets is “very good” and clients are “very attuned” to rising wage claims from staff, and have been preparing for this. “It’s not a surprise we’re seeing wages pressure emerge, perhaps the only surprise is how quickly it has come on,” he says.

Institutional banks also benefited from a massive wave of recent merger and acquisition activity driven by ultra-low interest rates, and market volatility can also be a positive. More volatility is likely, Miller says, and transactions such as the Ramsay Health Care bid shows there is still strong interest in deal-making.

“While the amount of announced deals has I think slowed a little bit, the level of discussion and consideration and potential transaction activity still looks very, very significant.”

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