"What we're focused on is trying to have a more deliberate and stronger voice. Doing the homework first and really trying to influence outcomes," Silk says. "Because with this much change going on and a Government that is going full steam ahead, what we're trying to do is say, 'let's get ahead of the game and tell you these are the real things that are on our minds'.
"Some of it may be to temper the way they might go on some stuff, but, in other areas, I've just been saying you're not being strong enough.
"I have to say, it's been quite interesting because they (the Government) are definitely reaching out and going, 'we need your help'."
The council's 100 members have a collective revenue of $87b and account for 28 per cent of GDP (private sector) and nearly 160,000 full-time jobs. Silk says she initially felt the council would lose members due to the Covid-19 pandemic.
But in fact, it has grown.
Government engagement is important. But so too is private sector action. From a banking perspective, that comes down to enabling business activity that has a positive impact on reducing greenhouse gas emissions. "Creating a set of common standards and metrics that allow you to start to really create something meaningful and understandable and transparent that is about shifting a change in behaviour from an environmental perspective," she explains. "It also starts to help the farming community to understand what expectations are really being created from them.
"And the reason you want to do it as an investor or as a bank is that you really believe that in the long term, you will see better business outcomes, more sustainable, more profitable. That's because they really understand the opportunities and they really, really understand the risks that they face."
A risk of a different kind is one of perception. The creation of common standards is necessary to avoid charges of greenwashing or social washing, she stresses. "We need to get some really consistent, transparent, independently assured metrics and standards to measure, these opportunities against."
Westpac NZ investments
Silk cites solarZero (see story below) as an example of a customer where the bank has structured facilities to support its expansion against clear mitigation targets which measure carbon avoidance.
"They're incredibly good at getting that balance right around 'How do I create a business that economically makes sense, but also, are we having an impact?'
"They would argue that their carbon avoidance today is circa 4000 tonnes per annum. That's the equivalent of planting like nine hundred thousand trees.
"So, when we talk about these tree programmes, just people putting solar panels on their roof, is having really material impact.
"And at a personal and individual level, it's substantially reducing their own household costs at the same time. So, you've got to go, things like that are a win-win."
Homes for whanau
A shared equity agreement with Waikato Tainui is enabling homes to be built for whanau in a complex environment where banks can't create mortgages over tribal land.
"You're thinking about having to provide facilities that are enabling people who traditionally wouldn't be able to get into a home because they don't actually have that initial equity offering," says Silk. "It forces you to think about the relationship you have in a very different way.
"So we have to all get aligned with, and agree, what's the outcome that we're really trying to achieve here. And it really forces you into thinking about, actually, 'I've got to help this homeowner and iwi build their financial literacy skills. I've got to help them understand, what are all the ins and outs of actually owning a home'."
Such arrangements force bankers to think about how they work with iwi if an individual homeowner starts to struggle with payments. "It's not a one-to-one relationship, so you end up with a relationship which is all about collaboration and around alignment on long-term, outcomes."
Working with iwi has led to a broader discussion in financial circles on the need to create principles to underpin social outcomes from a lending perspective.
The Asia Pacific Loan Markets Association has formed a working group to come up with a framework around social loan principles.
"They've come up with guiding principles around that," says Silk. "We've done the first loan under those principles in Australasia — a $125m dollar loan for Te Pūkenga (the new polytech organisation).
"It's basically providing funding for them to build facilities where they're going to be targeting education at underprivileged groups, with a particular focus on Māori.
"They've got a whole bunch of metrics that they have to report back to us, which are not about financial metrics, it's all about how many students, what are the qualifications they're getting, what jobs are being created, what's the employment statistics, coming out of the back of it."
• Westpac is a sponsor partner for the Sustainable Business report.
