Analysis of Sustainability Strategy at Westpac NZ Bank: A Report

This report offers a comprehensive analysis of Westpac New Zealand's environmental sustainability strategy. It begins with an executive summary and table of contents, followed by an introduction that outlines Westpac NZ's business operations and corporate social responsibility initiatives. The report then delves into the specifics of the environmental sustainability strategy, explaining its importance to the bank and its alignment with governmental regulations and customer preferences. A critical analysis of the strategy's impact on the five pillars of sustainability (economic, environmental, political/justice, social, and cultural) is provided, exploring both positive and negative consequences. The report also examines change management processes for introducing the strategy, including an assessment of Kotter's change process, and discusses how to address employee resistance. Finally, the report explores the role of corporate governance in infusing the strategy at Westpac NZ and addresses the stakeholder-sustainability dilemma, offering conclusions based on the analysis and including a list of references.

Running head: SUSTAINABILITY STRATEGY ANALYSIS 1
Sustainability Strategy Analysis
Author’s Name
College
Author Note

SUSTAINABILITY STRATEGY ANALYSIS 2
Executive summary
This report focuses on Westpac New Zealand, a leading bank with a customer base of over 1.5
million people. In a bid to ensure business growth, the report explores ways in which the bank
can benefit from an environmental sustainability strategy. The report inquires how the strategy
can be introduced to the bank and how change management resulting from the introduction can
be handled. Lastly, the report reveals the ways corporate governance can help in infusing the
strategy at Westpac NZ and how to handle the stakeholder-sustainability dilemma.

SUSTAINABILITY STRATEGY ANALYSIS 3
Table of Contents
Organization Change Management Practices and Sustainability Strategies...................................4
Introduction......................................................................................................................................4
The Environmental Sustainability Strategy.................................................................................4
Why Environmental Sustainability Strategy is important to Westpac NZ..................................5
Critical analysis of possible impacts on the five pillars of sustainability....................................8
A change management process to introduce at Westpac NZ....................................................13
Advantages of Kotters’ Change Process....................................................................................15
Disadvantages of Kotters’ Change Process...............................................................................15
How to implement the change management process in Westpac NZ.......................................15
Dealing with employee behavior, negative attitude and resistance to change...........................17
Corporate Governance and Sustainability.....................................................................................19
Introduction....................................................................................................................................19
How Westpac will deal with the sustainability-stakeholder dilemma.......................................22
Conclusion.....................................................................................................................................25
References......................................................................................................................................26

SUSTAINABILITY STRATEGY ANALYSIS 4
Organization Change Management Practices and Sustainability Strategies
Introduction
This paper explores the effectiveness of a sustainability strategy and change management
initiatives on a financial institution in New Zealand. The financial institution chosen is Westpac
New Zealand, a leading bank with over 197 branches in the country. Westpac New Zealand
operates under three major brands and serves over 1.5 million customers. Their range of services
includes retail banking, loan services, mortgage services, investment services and asset
management among others. The Bank is headed by a Chief Executive Officer with 8 senior
managers reporting directly to him (Wilson, Rose & Pinford, 2011).
Westpac NZ has a robust corporate social responsibility strategy. This has not only
helped to assist many people in New Zealand but also has enabled the bank to build a strong
reputation for a sustainable business (Singleton & Verhof, 2010). In essence, this partly explains
why the bank has been operating in New Zealand for the last 157 years. This report however
critically looks at how the environmental sustainability strategy and how it impacts the bank. In
addition, the report interrogates the change management process in order to infuse the
environmental sustainability strategy. Finally, the report will inquire the impacts of the change
management process at Westpac NZ including the resulting effects on the employees.
The Environmental Sustainability Strategy
Within Corporate Social Responsibility, the environmental sustainability strategy cannot
be understated. Westpac NZ has a variety of mechanisms in place to ensure that they conduct
their business while caring for the environment. The company, for instance, is involved in

SUSTAINABILITY STRATEGY ANALYSIS 5
regular environmental conservation like regular tree planting to combat desertification. Westpac
also spearheads green energy sources for its operations with a focus on solar energy. To reduce
environmental resource utilization, Westpac NZ has embarked on minimal paper usage by
orienting their operations towards paperless technologies such as information technology
(Melville, 2010).
The company has also continuously contributed financial resources to pro-environment
charities such as Non-governmental organizations advocating for wildlife conservation, green
energy, waste management and climate change. Moreover, Westpac NZ is at the forefront in
encouraging the use of environmentally friendly house construction materials. To this end, the
company has subsidized house investment plans using prefabricated materials (Sinha & Akoone,
2010).
Why Environmental Sustainability Strategy is important to Westpac NZ
To begin with, environmental strategy enables Westpac to comply with government
regulations in New Zealand. The Government abides by the international environmental policies
such as United Nations Framework on Climate Change, the Kyoto protocol on greenhouses gas
emissions and other international treaties. Likewise, it has enacted local laws like the
Environmental reporting act of 2015 and the climate change response act of 2002 to ensure
environmental protection (Chapin et al., 2010).
Companies that do not abide by the government regulations are disadvantaged in business
through high taxation, government quotas, and outright business limitations. To safeguard its
reputation and commitment to sustainability Westpac took early measures to ensure compliance
hence increasing its competitive advantage (Porter & Kramer, 2011).

SUSTAINABILITY STRATEGY ANALYSIS 6
Environmental Strategy is important to Westpac NZ in the attraction of Customers. This
is because customers are more than ever before conscious of the companies that take an initiative
in environmental conservation and shun those that disregard environmental sustainability.
Furthermore, customers want to be associated with companies that care for the environment and
Westpac NZ capitalizes on this trend (Crews, 2010).
The strategy has helped Westpac NZ to make strategic alliances with global companies
that employ similar environmental strategies. To this end, Westpac has partnered with other
banks that have adopted environmental standards such as Barclay's Bank, the Allied Irish Bank,
Bank of America and BNP Paribas to increase business transactions and offer their customers
flexibility. This improves their reputation and commitment to environmental sustainability by
associating with like-minded businesses (Lennox, Proctar & Russel, 2011).
Westpac has also benefited from the Environmental Strategy by attracting high qualified
employees. This enables the bank to come up with solutions that are difficult to imitate by
competitors which act as a barrier to entry to competitors. The employees are attracted to work
for Westpac because of their commitment to environmental sustainability which also improves
on social welfare of New Zealand citizens (Singleton & Verhof, 2010).
The environmental sustainability strategy is also important to Westpac NZ because it has
enabled the company to reduce the operating costs. Just like many companies that have adopted a
paperless technology, the bank reaps the advantages of fewer space requirements for storage
which equates to a reduced cost of operating the business (Williams, 2013). Similarly, Westpac
has reduced cost by using energy efficient equipment through a partnership with pro-
environment suppliers.

SUSTAINABILITY STRATEGY ANALYSIS 7
Westpac NZ has encouraged innovation by employing environmental sustainability
strategies. The bank, for instance, has benefited from increased mortgage by using low funding
low cost environmentally friendly prefabricated houses. Just like employees of organizations that
have similar strategies, Westpac employees and suppliers are forced to think of innovative ways
to implement the strategy by coming up with innovative solutions such as electronic banking that
eliminate paper usage and promote customer satisfaction at the same time (Chiaroni, Chiesa &
Frattini, 2011).
By adopting environmental sustainability, Westpac also realizes the benefits accrued
from reduced operational risks. These could stem from association with environmentally
insensitive companies or from noncompliance with environmental regulations which could spiral
antitrust suits and other legal cases. This ostensibly implies that the bank is able to benefit from
lower business risks, legal suits, and the associated costs (Kolk, 2008).
The Bank has realized improved productivity by sticking to the environmental
sustainability strategy. Firstly, Westpac realizes that by encouraging environmentally friendly
technology such as mobile banking and electronic transactions, customers are able to make and
receive payments faster while at the same time reducing the labour required to attend to the
customers at the banking halls (Brooks & Cubero, 2009).

SUSTAINABILITY STRATEGY ANALYSIS 8
Critical analysis of possible impacts on the five pillars of sustainability
Economic Pillar
The economic pillar is traditionally tied to the purpose of firms. In the economic sense,
all firms exist primarily to maximize shareholder wealth. There are other reasons why firms
exist. These include maximizing of employee emoluments, meeting societal financial stability
among others. From the foregoing, the economic pillar features dominantly on the role of the
firms (Lapeley, 2017).
That notwithstanding, it has become quite clear that the pillar cannot be self-sustaining
without the duty of care for the environment. For this reason, many firms such as Westpac NZ
have to abide by the environmental strategy to guarantee economic sustainability. The strategy
impacts the economic pillar in many ways (Moldan, Janouskova & Har, 2012).
On a positive note, the environmental strategy adopted by Westpac NZ especially with
regard to energy-saving technologies, green energy, and zero carbon emission will lead to low
cost of production hence increase the company profitability. This means that it will be a going
concern capable of operating sustainably for the foreseeable future (Chapin et al., 2010).
In retrospect, the environmental sustainability strategy as adopted by Westpac with a
focus on prefabricated houses offering low interest will lead to increased demand from
customers leading to high debts. This is one of the reasons that led to the global economic crises
as banks lend money to people mostly to buy homes. Eventually, the debts could not be paid
leading to wanton foreclosures (Wilson et al., 2011).

SUSTAINABILITY STRATEGY ANALYSIS 9
The environmental strategy is also a byword for compliance with government
regulations. As Westpac has adopted clean energy, which by extension means minimal carbon
emissions, the government responds by reducing taxes and offering other subsidies. The net
effect will lead to reduced government revenue collection (Seghezzo, 2009).
The adoption of efficient paperless electronic banking will lead to a reduction of labour at
Westpac which in effect will increase unemployment and disposable incomes for a sizeable
workforce (Chamberlain & Menclova, 2014). Similarly, the adoption of green energy and
energy-saving strategies such as the use of LED lights will lead to two outcomes. Firstly, it will
lead to low revenue collection by the power company and secondly, it will result in less demand
for labour in the power companies leading to job cuts and ultimately low purchasing parity of
people (Grant, 2008).
The environmental pillar
The environmental pillar is one of the most adopted by companies to enhance their
sustainability (Butler, 2011). Many companies including Westpac have come to realize that by
sustainably utilizing the environmental resources, they not only make savings but also resonate
with customers thereby ensuring the success of their business. The strategy adopted has various
potential impacts on the environment pillar.
Firstly, the environmental sustainability strategy on energy saving technologies and green
energy will lead to fewer carbon emissions. This will lead to lower parts per million in carbon
emissions leading to a reduction in greenhouse gas effects such as global warming and
eventually climate change (Kleine, 2010).

SUSTAINABILITY STRATEGY ANALYSIS 10
Secondly, using paperless technologies such as electronic transactions and mobile cash
transfers implies that there will be less waste of paper, cutting of trees and inefficient mining.
This will, in turn, lead to meeting both national and international environmental conservation
initiatives such as protection of rare and endangered species, combating desertification among
other environmental concerns (Sharma & Khanna, 2014).
According to Sinha and Akoone (2010), Westpac has been a pivotal partner to New
Zealand citizens by organizing tree planting events. Already the company has in conjunction
with the citizens has planted thousands of trees. The net effect of such environmental endeavors
will be the sustainability of the country's water towers.
The strategy also aims at forming sustainable relationships with suppliers (Anderson &
Noblet, 2012). This means that the suppliers have to meet environmental obligations such as the
supply of equipment and material with low carbon emissions and employing material life cycle
processes in their production. This will lead to better air quality and reduction in waste during
production.
The strategy also encourages the acquisition of equipment and material that is recyclable.
It requires the employees to lead by example through proper disposal of the electronic waste to
allow for eventual recycling thereby reducing exploitation of environmental resources (Garard &
Kowarsch, 2017).
Lastly, the strategy may impact negatively on the environment by encouraging new forms
of energy and electronic technologies that lead to new cases of environmental pollution. For
instance, lithium-ion phosphate required in the manufacture of batteries used for wind and solar
energy leads to more pollution eventually than using fossil fuels (Crews, 2010).

SUSTAINABILITY STRATEGY ANALYSIS 11
Impacts on political/justice pillar
The environmental strategy will lead to conformance with human rights regulations due
to the fact that environmental sustainability and human rights are in many ways intertwined. It
may also lead to civil unrest due to unemployment resulting from less need for labour as eco-
friendly technology is less labour intensive. For this reason, unemployment could be a growing
concern in the country as companies focus on green technologies (Chamberlain & Menclova,
2014).
On the political pillar, the environmental strategy will lead to efficient use of resources
and eventually Lowe cases of legal redress. Research has shown that there is an inverse
relationship between the number of legal cases filed and a company's pro-environment strategies.
This implies that the political risk of conducting business will drop significantly as companies
focus more on environmental sustainability (Lepeley, 2017).
The environmental strategies will lead to fewer regulations that in the end stifle
companies from achieving their full potential. With lower carbon emissions, prudent
environmental management, and sustainable resource utilization, there will be less need for
political oversight, and punitive laws for nonconformance with environmental sustainability
(Fabian, 2015).
The environmental strategies may in retrospect, lead to new forms of regulations and
policies on new green technologies such as in the use of wind energy, solar energy and hybrid
energy technology (Jamali & Rabbath, 2008).

SUSTAINABILITY STRATEGY ANALYSIS 12
Cultural pillar
According to Michelon, Boessso, and Kumar (2012), the cultural pillar focuses on the
way of life for the population. This in many ways touches on religion, the way of expression by
the population, the diet, tourism and the artifacts held sacred by the population.
Since the environmental strategy promotes environmental conservation by advocating for
methods that do not exploit the resources unsustainably, the culture of the people will be
preserved (Tobias & Blakely, 2009).
The strategy will also promote tourism since environmental conservation will lead to
protection of wildlife and cultural amenities. This will, in turn, benefit the communities
economically and lead to more cultural preservation (Tobias & Blakely, 2009).
The cultural expression, religion, and diet for indigenous minorities will also be upheld
since environmental degradation is one of the major causes for cultural erosion. The strategy will
lead to less exploitation of environmental resources which interfere with the cultural regime
(Seghezzo, 2009).
Social Pillar
The environmental strategy will lead to less equity in the social sphere. This is because if
labour intensive technologies are ditched in favor of green efficient technology, many people
will lose their jobs and this may lead to inequality in the society (Michelon et al., 2012).
The strategy will impact the social pillar positively by encouraging social diversity. This
is because, for the strategy to be effective, it has to encourage the inclusion and participation of
all stakeholders in the society (Moldan et al., 2012).