Environmental and Social Impacts of Westpac Group Operations

This report analyzes the environmental and social impacts of Westpac Group operations and compares it with other companies in the same sector as per GRI. It also discusses the key challenges faced by the company in adopting GRI framework and benefits to potential investors, current shareholders, and stakeholders of the firm. Additionally, it includes a strategic initiative of Jerry Pty Limited to include the range of T-shirts for men in the retailing store with cost analysis, balanced scorecard, breakeven analysis, and impact of the strategic initiative.

RUNNING HEAD: WESTPAC GROUP
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Westpac Group
Report
9/22/2019

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Part A: Critical Analysis
1. Overview of Environmental and Social Impacts of Westpac Group operations
Westpac Group operates in banking sector of Australia and offers various products and
services to 13 million customers across the world. This section of the report is focused towards
understanding the social and environmental impact of the operations of the company on
stakeholders. Westpac Group has maintained and developed a culture of undertaking
environmental, economic and social responsibility in order to build a sustainable future
(Westpac, 2019). The financial industry also has great influence on the society and people.
Westpac positive impact on society include “lending to grow the stock of social and affordable
housing and to back the CleanTech and environmental service sector” and provide banking
services to Indigenous Australian and to the customers operating in social sector and tis way
company contribute in the development of the society and indigenous people. Further, Westpac
group joined “UNEP Finance initiative” in order to establish a positive impact incubator where
all the new business ideas will be tested and funding will be provided to deserving startups
(Higgins, Tangs, & Stubbs, 2019). The positive impact that banks have on society includes
stronger community services, the protection of environment, the saving of lives and enhanced
financial literacy (Weber & Feltmate, 2016).
For society, Westpac conducted various activities and drives to contribute for society in a
positive note and for that they involve their employees, did community partnership, and capacity
building. Employee involvement through Westpac operation backyard, pro-bono support,
donations, and charity bikes as from these initiatives 85% of employees participated in societal
activities, 7000 employees do volunteering on frequent basis, 228 employees participated in
Cape York program. Further approximately $1.4m fund collected by employees and invested in

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250 projects related to environment. Westpac partners with most of the communities for welfare
of the society and partnered with Landcare Australia, Juvenile Diabetes research foundation and
Surf life Australia. Several workshops were conducted by the company to educate people of
Australia about saving, spending and insurance, separating needs and wants, and benefits of
compound interest (Westpac, 2019). The negative social and environmental impacts of
operations of Westpac are economic destruction as increased economic growth due to banking
operations leads to more consumption and spending by the people and this will indirectly related
to destruction of environment. For example, increasing growth leads to increasing CO2
emissions per capita. More challenges that society will going to face in near future due to
operations of banking industries are crises in food production, decline in natural resources,
climate changes and more energy consumption as banking operations can improve standard of
living and increasing purchasing power that indirectly affect environment (Dumay & Hossain,
2019).
2. Comparison with other companies in same sector as per GRI
Global reporting initiatives (GRI) are the global standard on basis of that the companies
present sustainability report. This provides best practice for sustainability reporting on a range of
environmental, social and economic impacts. Westpac Group has effectively adopted and
implemented all the concepts and standards of sustainability reporting. The company follows G4
guidelines- Standard Disclosures and Reporting Principles. Specific standard disclosures for
category environmental are materials, energy, water, emission, and transport, effluents and waste
and supplier environment assessment. In social category includes labor practices, human rights,
and society and product responsibility. In that some aspects are included that is labor relations,

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diversity, investment, indigenous rights, anti-corruption, services and products labeling and
customer privacy (GRI, 2019).
In the same sector in Australia other companies are also following G4 disclosure
guidelines in sustainability reporting. Some of the organizations in Australia banking sector are
Commonwealth bank, National Australia bank and much more. By comparing the sustainability
reporting of Westpac group with National Australia Bank it is known that NAB presented its
goals and targets in scorecard format and compared it with last year performance to know the
actual improvement.
NAB disclose and present data in a systematic form and in depth by providing comparing
figures that help the stakeholders to take decision by comparing the negative and positive impact
of operations of the company on society and environment. As in sustainability report of NAB it
is analyzed that the company clearly states all the progress in each sectors that are employee
engagement, GHG emissions, energy use, water use, supplier sustainability targets, volunteering,
and indigenous inclusion (NAB, 2019). Further in NAB reporting their goals of the year are
mentioned clearly and during 2018 company’s goals were responsible consumption and
production, climate action, gender equality, life on water and land and affordable and clean
energy to communities in Australia. Further, report clearly defines the responsibilities and
projects that company undertake in order to reduce the environmental and social impacts of its
operations. In section sustainable impact finance the company highlighted its investment in
companies that offer positive environment and social impact and financial return (NAB, 2019).
The quality of information that is provided by Westpac group in its sustainability
reporting does not cover all the segments or category as per the G4 disclosure and omitted most
of the social impact that happen on the society. Through the analysis it is known that Westpac

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report should include sessions such as reduction in global emission due to their efforts, initiatives
taken by the company towards climate change, clean energy and to save other natural resources.
Overall companies in banking sector are contributing more in the development of society and to
make positive environmental impacts. It is further identified with the analysis that both the
companies are quite good in disclosing and adopting all the accounting disclosures standards
formed and following these standards in an appropriate way (Islam & Thomson, 2016).
3. Key challenges face by the company in adopting GRI framework
In the process of environment accounting and social accounting the Westpac face many
challenges related to disclosures. Environment accounting is reporting or disclosing environment
cost such as waste disposal costs and liability costs. Social accounting is the accounting of the
adverse and positive effect of operations of the company on the society (Vigneau, Humphreys &
Moon, 2015). This require more efforts and time and companies in banking sector such as
Westpac face issues in analyzing the cost of environmental changes and the positive impact that
company made in reducing the adverse impact of the operation this analyzing and calculation is
an issue in adopting GRI framework. In order to cope up with this issue companies require
proper guidelines or detailed GRI framework that include guideline on calculating economic
liability, environmental cost, environmental assets, and capitalization of liability and cost and
reporting framework. All the benefit and cost of environment cannot be measured in monetary
terms. Costs of externalities like waste generation, level of emission, afforestation are not
assessed in monetary value. This impact on the authenticity and reliability of sustainability
reporting of Westpac Group and this leads to problem in decision making for the stakeholders.

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Initially the reports of the companies were prepared for the owners of the company and now it is
prepared for the stakeholders (Dumay, Bernardi, Guthrie & La Torre, 2017).
4. Benefits to potential investors, current shareholders and stakeholders of the firm
The evaluation of GRI reporting standards adopted by Westpac with other organization in
banking sector help the investors and stakeholders in the following way as it provide a clear view
to the stakeholders about transparency and reliability of two reports. Further, this helps those
potential investors who are keen interested towards society and environmental and considered
this as an important factor while deciding for the investment (Hoque, 2017). Comparison of two
sustainability reports clearly gives the insight about quality and depth of company’s operations
and their impact on the society and environment. Further, this evaluation helps the stakeholders
to understand the organizational activities such as customer service, management accounting,
and human resource management. So the evaluation help the stakeholders to understand all the
aspects that companies cover in order to present its sustainability report. The comparison of
sustainability of Westpac and National Australian Bank help the stakeholders to take decision
regarding investment and policies and transparency level of the company and growth of the
companies.
Further current shareholders of the company get idea about funds invested by the
companies in same industry in development of economy and society. Sustainability reports are
prepared by the companies to disclose all the initiatives, impact that companies are making on
the society and environment. This helps existing stakeholders to compare the industry wise
progress and contribution in the society by the companies and where there funds are invested in
communities development (Evangelinos & Nikolaou, 2009). This evaluation also give fair

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insight to shareholders whether company is following or abiding to the laws and standard or not.
So with the widespread evaluation of companies GRI reporting standards the investors,
shareholders and stakeholders get benefit to greater extent.
Part B: Strategic Initiative
Jerry Pty Limited has been involved in the retailing of women clothing of high brand.
Headquarter of the company is established in the Australia. The strategic initiative that has been
planned by the company is to include the range of T-shirts for men too in the retailing store.
1. Cost Associated with the Strategic Initiative
Cost Analysis
Expenses (Amount $) Amount
Fixed Cost
Marketing and Advertisement $ 700.00
Equipment Depreciation $ 500.00
Outlet rent $ 1,000.00
Furniture and Fixtures $ 1,200.00
Salary $ 2,000.00
Stationery $ 300.00
Variable Cost
Petrol Expenses $ 900.00
Packaging $ 500.00
Selling agent commission $ 800.00
Total $ 5,700.00
2. Balanced Scorecard
Perspectives Objectives Goals Measurement
Customer
Perspective
To offer high quality
products to not just
The goal of the
company is to increase
its customer base and
Increased customer
satisfaction

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women but also men.
Charging reasonable
amount for the
products
sales. Increased Customer
base
Learning and
Growth
To provide training to
the employees for
dealing with male
customers.
The goal is to at least
have 6 employees with
complete knowledge
of the clothing of male.
Increased Employee
satisfaction
Improved service
quality
Financial
Perspective
To increase the sales of
the store
High returns Increased sales
Increased revenue of
the business.
Internal business
perspective
Improving Payment
process and reducing
waiting line at the
store
Installing updated
information
technology and
software
Improved
communication
Safe transactions
Key Features of the Scorecard
One of the key features of the balanced scorecard is that it is comprised of both financial
as well as non-financial perspectives that motivate business to focus on improving not just its
financial performance but its operations. Besides this, the above balanced scorecard is working
as a blueprint for the business to execute its strategic initiative.
3. Breakeven Analysis

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In business, the break-even is the point where the business turns from creating the losses
to make the profits. The break-even point may be described as a point wherever the total revenue
is equal to the total fixed expenditures as well as variable expenditures (Van Ooort, 2016).
Break-even point analysis will be significant particularly if the company us preparing to find the
sales volume required for covering the total cost, and afterward planning to generate more
profits. The break-even analysis is very significant tool to know a point where the new strategic
initiative of including ranges of men T-shirts profitable. In the different terms, it can say that this
is considered as the financial calculation utilized to decide the number of men T-shirts require to
sell, in any case to cover the cost. Thus, this is very significant to evaluate the point, as viability
of new initiative to include the range of t-shirts for men is dependent on staying beyond the
number.
Moreover, the break-even analysis would be very useful for Jerry Pty Limited to decide a point
where the business by including new range of men t-shirt can operate without having the losses.
In addition, the break-even analysis will also be helpful to decide whether the overheads are
realistic as well as the requirements to be decreased. With the help of break-even analysis, it will
be easy for Jerry Pty Limited to know that at what point the revenue from this new range would
be equal to total variable expenses along with fixed expenses. Therefore, because of the great
significance of the break-even point in taking important relevant decisions, it will be beneficial
to use the break-even point in the planning, regulating along with decisions taking in Jerry Pty
Limited (Pålsson, Pettersson & Hiselius, 2017).
4. Impact of Strategic Initiative
 Breakeven Analysis Calculation
Sales $ 7,600.00

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Variable Cost $ 2,200.00
Contribution $ 5,400.00
Contribution Margin (Contribution/Sales) 71%
Breakeven Sales (Total Fixed Cost/Contribution Margin) $ 8,022.22
Contribution Per Unit (Contribution/No. of Units Sold) $ 36.00
Breakeven in Units (Total Fixed Cost/Contribution per unit 158.333333
Note: Jerry Pvt. Ltd must sell at least 158 units in the forthcoming year to achieve the
break even. At this level, the firm will incur no loss and earn no profit.
• The break-even analysis would be useful for the company to know how much sale
volume is required by the business for generating the profits on the basis of fixed costs, variable
costs as well as selling price. It is required by Jerry Pty Ltd to make the strategies to enhance the
break-even point as well as forecast profit. The break-even should be utilized in conjunction with
sales forecast at the time of making price related strategy, either as the part of the business plan
or marketing plan (Hetch, et. al, 2017). The company should make the strategy to reduce the
break-even point and to increase the profits. It can be possible by increasing selling price in the
highly competitive environment and by reducing the fixed cost and variable cost. Decreasing the
furniture cost as well as rent will be most common way for Jerry Pty Ltd to decrease the fixed
cost, as is relocating to different jurisdictions, which have low business tax or the utility cost. If
the company will be able to decrease the fixed cost, then it will also decrease the break-even
point to the sold units (Morano & Tajani, 2017).
In addition, by decreasing the variable cost, the company will also be able to reduce the
breakeven point units. The variable cost is normally dropped by decreasing the cost of labor and

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the material cost, for an instance, the builder sourcing lumber from the low-cost dealer and
making advantages of the technologies as well as equipment for automating the production.
Additionally, enhancing numbers of sold units will increase the profits. This strategy may be
used at the time of consideration of the advantages of the advertising (Xavier, Moutinho &
Moreira, 2015).
• Working to state how the proposed strategies could affect the break-even point as well as
forecast profit to run the business by including new range of men t-shirts
Following is the revised cost analysis as per the strategy-
Expenses (Amount $) Amount
Fixed Cost
Marketing and Advertisement $ 700.00
Equipment Depreciation $ 500.00
Outlet rent $ 600.00
Furniture and Fixtures $ 800.00
Salary $ 2,000.00
Stationery $ 100.00
Variable Cost
Petrol Expenses $ 700.00
Packaging $ 300.00
Selling agent commission $ 500.00
Total $ 4,000.00
Breakeven Analysis
Sales $ 7,600.00
Variable Cost $ 1500.00
Contribution $ 6100.00
Contribution Margin (Contribution/Sales) 80%
Breakeven Sales (Total Fixed Cost/Contribution Margin) $ 5875

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Contribution Per Unit (Contribution/No. of Units Sold) $ 40.66
Breakeven in Units (Total Fixed Cost/Contribution per unit 115.5927

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