Westpac says persistent questioning from clients of its institutional bank on which activities qualify for a “green loan” has led it to jump ahead of work by the Australian Sustainable Finance Institute, with the bank releasing its own lending classifications for “green” and “transition” finance to help reduce risks around greenwashing.

In a discussion paper to be released on Thursday, Westpac highlights the many challenges and complexities in developing standardised definitions, which the ASFI is attempting to do for all banks.