Westpac sustainability seer Graham Paterson tells Risk that despite the GFC, corporate responsibility is here to stay, and serious risk managers would be wise to take note of the rising trend
It’s been said there’s no one path into
the field of corporate social responsi
bility (CSR), and Graham Paterson,
head of sustainability and community at
Westpac, is a case in point. A loyal life
time employee of the group, Paterson is a
self-confessed “long-term banker” – not
the easiest connection to make with CSR
following the financial crisis.
But for Paterson and Westpac, the
links are clear. Australia’s largest bank,
Westpac has been a pioneer in the field
following its own singular and painful
financial crisis in the early 1990s, during
which the bank lost the faith of many of
its stakeholders. The resulting restructure
heralded a sea change in the bank’s oper
ations, and a CSR focus that has blos
somed from a three-person contingent in
the stakeholder communications team 10
years ago to a current team of 17. “Now
CSR for Westpac is not a program – it’s
really just the way we do business,” Pater
son says.
Part of Westpac’s woodwork
Westpac’s sustainability operation spans a
broad agenda of environmental, social and
governance aspects, providing advice and
consultancy across the business and identi
fying areas in which it can agitate for change.
Its ingrained nature is reflected in the
existence of a sustainability committee
that involves both board and manage
ment, as well as a sustainability counsel
of people from across the business. In fact,
CEO Gail Kelly is a strong advocate of
the approach, and the group recently
combined its financial and sustainability
reporting for the first time.
Paterson says a highlight is its activities in the Cape York
Peninsula, where upwards of 400 employees have been able to
work with remote Aboriginal communities. Other initiatives
include financial donations, a “matching gifts” initiative and
employee engagement.
Risk and CSR
Perhaps it’s some measure of the connection between CSR and
risk management that the departments sit on the same floor in
Westpac’s Sydney headquarters.
Paterson says the business has a clear set of values and prin
ciples, and that “if we operate anywhere across the business
that is contrary to those values, there is a risk”. He says a strong
CSR commitment is crucial in identifying some of the less tan
gible risks to business that can have just as much impact as
direct threats. This could relate to corporate governance, or
environmental, social and reputational risks.
He gives the example of financial education initiatives. “We’ve
got customers that have different levels of understanding of the
financial system – if they don’t understand, that gives rise to oper
ational risks.
“In some ways a company having a very sound underlying
sustainability approach actually takes some risks out of the way
the business operates; by understanding what are some of those
emerging risks,” he says.
A rising trend?
Though the financial crisis may have meant cutbacks to CSR
programs in Australia, Westpac’s has survived intact.
In many ways, the CSR agenda is being driven by Westpac’s
employees, with younger staff now listening to “hearts as well
as minds”. As social awareness rises, employees are less likely
to choose employers without CSR credentials. “We know there’s
a war for talent going on for the best employees, and we know
this is important to them,” he says.
The activism of shareholders and increasingly discerning cus
tomers is also critical. As transparency grows through tech
nology and the information explosion, Paterson says the focus
on CSR will only grow.
The future then, for CSR – or bankers interested in it – is
bright. “I can’t see there will be a lessening of expectations from
our stakeholder groups – longer term it’s only going to get more
complex.”
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