Westpac to offer interest-free loans for insulation, home heating, solar panels

Westpac New Zealand chief executive David McLean wants other big businesses to measure and reduce their carbon emissions. Photo / File

Westpac is to offer interest-free loans of up to $10,000 to encourage people to insulate or install heat pumps or solar panels on their homes as part of the bank's drive towards addressing climate change.

The offer, which is only available to existing and new Westpac home loan customers, is part of a raft of initiatives the bank is taking to encourage a greener, healthier New Zealand.

The bank announced this morning it had become New Zealand's first carbon zero independently certified bank, which means it is actively reducing its emissions through reducing air travel, improving the energy efficiency of its offices and branches and converting its vehicle fleet to electric.

It will also offset the remainder of its emissions by buying New Zealand native permanent forestry carbon credits.

David McLean, chief executive of Westpac New Zealand, said climate change was by far the biggest issue globally over the medium term.

"It is hard to look past coronavirus in the short term but the planet is burning as well," he told the Herald.

He said the bank had thought about the issue in two ways - firstly trying to improve its own emissions and then looking at ways to encourage others.

McLean said the bank began buying electric vehicles in 2016 and by October last year 30 per cent of its 300 vehicle fleet was electric.

It now wants to ensure all its vehicles are electric by 2025.

The bank had also reduced its own emissions by 50 per cent since it started measuring its emissions in 2008, and was targeting a further 30 per cent reduction.

"It started out with simple things like light bulbs and moving to a green building."

It was also about deciding whether flights were necessary and considering if meetings could be held by video conference instead, he said.

By offering the interest-free loans it wanted to encourage external parties to also take steps to become more energy efficient at home.

The Westpac warm-up loans can be used to buy heat pumps, solar panels, double glazing, ventilation or insulation in order to help make people's homes warmer, drier and healthier, and potentially reduce their energy bills.

The interest-free loan has a maximum term of five years.

The bank is also being more careful about the kinds of businesses it lends money to.

McLean said it had no coal mining loans at all and while it did lend to the gas industry it was hoping to transition out of that over time.

He said the New Zealand electricity industry was 80 per cent renewably generated and it was working with the industry to help a shift away from gas.

"It's not just a banking problem," he said.

McLean said any new lending must meet strict lending criteria, including that it was consistent with transitioning to a net-zero carbon economy in line with the Paris climate agreement.

Westpac had also provided $1.6 billion in lending to businesses providing climate change solutions and had a target to lend $2b by October 2020.

McLean said by setting an example he hoped other big businesses would follow suit.

"We are happy to show our learnings and encourage others. Getting carbon zero measured I think it is something all big companies could do. I think it is a collective problem."