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Westpac revealed an Australian-first Social Tailored Deposit. This medium- to long-term (one to five years) investment product has a minimum transaction of $1 million and is designed to deliver social investments.
This decision came off the back of increased demand from investors, with funds expected to go towards things like essential services, affordable housing, and socioeconomic empowerment.
Three institutional bank clients are assisting with the launch: City of Sydney, University of Sydney, and La Trobe University.
“We’ve seen growing investor demand in sustainable investment options, and we see the Social Tailored Deposit as another important step in supporting customers that are committed to a sustainable future,” said Westpac institutional bank CEO Nell Hutton.
This latest offering follows the success of the world-first Green Tailored Deposit, introduced by Westpac in 2018.
Over 100 investors have provided more than $2 billion in funding to go towards renewable energy, low-carbon transport, water infrastructure, and more.
City of Sydney lord mayor Clover Moore said this latest tailored deposit will help in supporting social issues throughout communities.
“This investment will support affordable housing projects and essential education, healthcare and transport services, while the returns help fund our long-term capital works program. Socially sustainable investment doesn’t just make financial sense, it’s the right thing to do. We hope to set an example and send a signal to the broader market that we support the development of more socially sustainable investment options,” said Moore.
Westpac anticipates the Social Tailored Deposit to be popular with government and public sector investors.
University of Sydney vice-president (operations) Nicole Gower said: “We’re continually looking for ways to improve how we incorporate environmental, social and governance factors in our investments, and look forward to seeing how our Social Tailored Deposit with Westpac performs and contributes to improving social outcomes and sustainability across a range of measures.”
Some of the expected areas for investment include:
- Healthcare
- Education
- Commercial real estate
Areas that are excluded from the framework are:
- Fossil fuels
- Mining
- Tobacco
- Gambling
- Defence, including controversial and nuclear weapons
Commenting on the deposit, Morningstar Sustainalytics’ head of sustainable fixed income research, Barbara Lambotte, said: “The Westpac Social Tailored Deposit is the first framework that Morningstar Sustainalytics has opined on, both in Australia and globally, that is solely dedicated to the issuance of social deposit products. Based on our assessment, Morningstar Sustainalytics is confident that Westpac is well positioned to issue social tailored deposits and that the Westpac Social Tailored Deposit is credible, impactful and aligns with the core components of the Social Bond Principles 2023.”
