Sustainable Business Model Westpac Banking Corporation

Question: Discuss about the Sustainable Business Model for Westpac Banking Corporation. Answer: Introduction The concept of sustainability implies for businesses to adopt responsible business practices for ensuring protection of the environment, community and society. The implementation and adoption of a sustainable business model in organisations is essential for their long-term growth and success. This helps in maximising shareholder value and thus increasing the profitability of an organisation. Organisations adopting sustainable business model need to comply with all the governmental regulations for safeguarding the interest of all its stakeholders (Stubbs Cocklin, 2008). In this context, the present essay demonstrates the development of a sustainable business model by Westpac Banking Corporation through entering into collaborative partnerships with government regulations. Sustainable Business Model of Westpac Banking Corporation Westpac Banking Corporation is recognised as one of the leading public bank of Australia, headquartered in Sydney. The company mainly provides banking and financial services to corporate, institutional and government customers internationally (Westpac: Annual Report, 2008). It is regarded as the most sustainable company by a Toronta-based media company known as Corporate Knights. The company has developed a sustainable business model through abiding by all the governmental regulations of the countries in which it operates its business activities. Westpac is truly dedicated and committed to comply with all the necessary economic and trade regulations worldwide for meeting the expectations of the communities at large. The company is well-aware of the fact that working in collaborative partnerships with government regulations is necessary to enhance its brand reputation. The board of directions of the company have ensured that all its employees must be accountable by complying with all the sanction requirements (Westpac: Annual Report, 2008). Westpac has also established a workplace policy that provides guidance to the employees to follow with all the legal laws in all jurisdictions and the consequences of not obeying with the policy. The company is supervised and monitored by mainly five governmental agencies in Australia. These include Australian Prudential Regulation Authority (APRA), Reserve Bank of Australia (RBA), Australian Securities an Investments Commission (ASIC), Australian Securities Exchange (ASX) and Australian Competition and Consumer Commissions (ACCC) (Westpac Groups Principles for Doing Business, 2014). APRA mainly reviews and controls the capital adequacy and liquidity position of the company. APRA also determines the statutory and regulatory banking requirements to be met by Westpac for protecting the interests of consumers. RBA holds the responsibility of developing monetary policy, managing Australian foreign reserves and issuing its currency notes (Westpac Group: US Resolution Plan, 2013). ASIC is mainly responsible for enforcing necessary laws and regulations for protecting the interest of the investors and creditors. The implementation of the financial laws for maintaining honesty and fairness in the business operations of Westpac is undertaken by ASIC. ASIC enforces regulations in relation to general insurance, life insurance, retirement savings and securities on banking industry in Australia. ASX regulates the countrys market for securities and Westpac is listed on ASX and thus have to abide by its contractual obligations. ACCC promotes the necessary laws and regulations relating to the prohibition of anti-competitive and unfair market practices in the country. The government of the country has currently adopted a policy known as four pillar policy according to which the four major banks in Australia holds the responsibility of maintaining proper competition level in the banking industry. Westpac, a leading four pillar bank in Australia, has to comply with the ACCC regula tions and thus have to adopt business practices that does not eliminate or reduce competition level (Westpac: Annual Report, 2008). Westpac operates its business activities on an international level and thus also works in collaborative partnership with other countries government regulations to achieve sustainability. The Reserve Bank of New Zealand (RBNZ) has implemented the regulations on foreign banks to carry out their business in the country either through a branch or subsidiary of its parent company (Westpac: Annual Report, 2008). Westpac complies successfully with these statutory requirements and operates its business activities in New Zealand through dual registration. The company has established its subsidiary Westpac New Zealand and also have its NZ Branch for offerings its financial and banking services to its New Zealand (NZ) consumers. The company conducted its business operations in the country through its NZ branch till the year 2006 but opened its subsidiary thereafter in order to follow the policy of RBNZ. The policy of dual registration was adopted by Westpac to carry out its banking services in the country without causing any disruption to the investors and customers. The development of a subsidiary has enabled the bank to carry out its banking operations in NZ efficiently and economically without having any impact on the continuity of its services (Westpac: Annual Report, 2008). The New York branch of Westpac is a federally licensed branch and is supervised and controlled by the International Banking Act (IBA) and the US Federal Reserve. The International Banking Act (IBA) states that foreign banks are not allowed to establish a branch or representative office in the US without the approval of the US Federal Reserve (Westpac Group: US Resolution Plan, 2013). Also, US Federal Reserve has maintained that the foreign bank branch should not have more than 5% voting stock in any of the US bank. US comptroller of the Currency has determined the capital equivalency deposit that should be maintained by a federal branch with US Federal Reserve. The federal branch of the company in the US complies with all these necessary laws and regulations of the countrys government. In addition to this, Westpac also complies with the USA Patriot Act according to which all the US branches of foreign banks must be reviewed by the US financial institutions for preventing the occurren ce of any money laundering activities. The review includes obtaining verification of the foreign bank branch and gaining appropriate information about its owner. The US branch of Westpac in this context has adopted and implemented an anti-money laundering program for identification and reporting of suspicious activities for protecting the interest of its customers in the country (Westpac Group: US Resolution Plan, 2013). Westpac complies with United Nations Security Council (UNSC) sanctions of all the jurisdictions in which it aims to operate its business activities. Sanctions are referred to as tools used by governments for controlling the occurrence of any adverse situation that may have negative on the economic growth and development of a country (Westpac Group Sanctions Policy, 2014). In this context, Westpac meets Australian sanctions requirements effectively and also the sanction regimes followed in other countries where it carries out its business activities. The company does not conduct any business activities that do not comply in accordance with the sanctions of Australia. The business procedures of the company are developed in accordance with the laws and regulations of sanctions regimes to carry out its business in collaborative partnerships with government (Westpac Group Annual Review and Sustainability Report 2012, 2012). The breach of sanctions is reported by Westpac to the concerned a uthority for overcoming its adverse effects in the future context. The company provides proper training to the employees so that they abide with all the sanctions regimes both at domestic and international level. The training helps in providing adequate information to the employees about the possible consequences of breaching any of the sanctions (Westpac Group Sanctions Policy, 2014). Westpac is recognised as the first bank to join the Green Challenge Plus of the Australian governments. The greenhouse challenge is a join program that is mainly carried out between Australian government and its industries. The main aim of the program is to reduce the emission of greenhouse gases from Australian industry sector (Albrecht, 2002). Westpac signed an agreement with government that provided a framework for undertaking actions to reduce the emission of greenhouse gases (Smith, 2014). Westpac is recognised worldwide as having implemented the best sustainable business model and it has achieved this position by complying with all the governmental rules and regulations. The development of a collaborative partnership with the government regulations has enabled the company to maintain transparency in all its business operations. The company develops voluntary disclosures for disclosing its corporate responsibilities towards environment, employees, customers, suppliers and the communities. Also, it develops a stakeholder impact report (SIR) providing a full assessment of the sustainability measures adopted by the company (Westpacs squashed tomato: a sustainability leader, 2010). The introduction of such strategic measures to adopt sustainable business practices has enabled Westpac to enhance its brand reputation on an international level. Thus, it can be said that complying with all the statutory and legal requirements related to sustainability has enabled the company t o gain support from the government authorities. This has facilitated Westpac to develop a sustainable business model responsible for its worldwide success (Benn et al., 2014). Conclusion The discussion held in the essay concluded that entering into collaborative partnerships with government regulations facilitates organisations to develop a sustainable business model. Westpac has demonstrated a perfect business example of achieving sustainability through complying with all the government regulations and thus seeking support for its business activities by the jurisdictions. The company has adopted transparency in all its business processes through abiding with the governmental regulations that enabled it to achieve sustainability. It appropriately follows all the sanction regimes at both domestic and international level through which has strengthened its brand image worldwide and proved to be beneficial in gaining mutual support from the government. References Albrecht, J. (2002). Instruments for Climate Policy: Limited Versus Unlimited Flexibility. Edward Elgar Publishing. Benn, S. et al. (2014). Organizational Change for Corporate Sustainability. Routledge. Smith, J. (2014). The World's Most Sustainable Companies of 2014. [Online]. Available at: https://www.forbes.com/sites/jacquelynsmith/2014/01/22/the-worlds-most-sustainable-companies-of-2014/#7cefb6834d97 [Accessed on: 27 August 2016]. Stubbs, W. Cocklin, C. (2008). Conceptualizing a Sustainability Business Model. Organization Environment 21 (2), 103-127. Westpac Group Annual Review And Sustainability Report 2012. (2012). [Online]. 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