Swedbank acknowledge that climate change is one of society’s greatest challenges. Research shows that an increased concentration of greenhouse gases warms the planet and creates substantial risks for both prosperity and growth.
As a financial player, we have an important role to play to accelerate the transition to a sustainable low carbon economy. We therefore integrate climate considerations into our lending process, investment process, customer dialogue and business operations.
Swedbank has a group-wide approach to climate change; we reduce our exposure to coal in both investments and financing, we continue to encourage portfolio companies and corporate clients to improve their climate management as well as measure and disclose the carbon footprint of investment portfolios and we work to minimize our operational environmental impact and our carbon emission.
Actions to combat climate change:
In our own operations
- The bank received ISO 14001 environmental certification in 2003, the first listed bank in the Nordic region to do so.
- Swedbank is offsetting the greenhouse gas emissions generated by our own operations.
- Swedbank has signed the Science Based Target Initiative, pledging that the bank’s future climate goals will align with the Paris Agreement.
- Swedbank has announced its support for the TCFD recommendations, a concrete tool to increase awareness of climate-related risks and opportunities in a time of uncertainty.
- Swedbank has adopted a group-wide climate target to reduce our own greenhouse gas emissions by 60 per cent between 2019 and 2030.
- All electricity used in our Swedish operations is environmentally certified with Bra Miljöval.
- Swedbank has, as part of the TCFD project, launched an internal training on climate consisting of three e-learning packages targeting different learning groups. Mandatory to all within the Group, with basic information about climate change. Towards client facing banking operations, with information about climate change and impact on financial services. Towards SME’s & scenario analysis participants, with information about TCFD, risks and opportunities.
- Swedbank excludes companies mining and producing coal to more than 5% of its turnover.
- We have also decided not to directly finance coal-fired power plants.
- We conduct sustainability risk analysis (including climate risks) on all our corporate credits above SEK 8m in Sweden and EUR 0,8m in the Baltic countries.
- We develop additional & complementary tools to minimize the impact of sustainability risks.
- In 2017 we broadened our range of sustainable financial products by launching a framework for green financing and issuing the bank’s first green bond.
- Swedbank has made it a priority to continue to finance investments in renewable energy and promote reductions in coal extraction and greenhouse gas emissions.
- Swedbank´s Position Statement Climate Change states that we will support the renewable energy sector through financing of renewable energy projects and advisory, guide our clients towards best practice financing decisions, including energy efficiency and mitigation of climate related risks. It also assures that climate risks are a core component in our sustainability risk assessment and that we will never participate in lobbying aimed at weakening climate policy.
In our investments
- Swedbank Robur excludes all companies mining and producing coal to more than 5% of its turnover from our investment portfolios.
- In our asset management climate is an integral part of the sustainability analysis and climate parameters are fundamental for our sustainability funds.
- By signing the Montreal Carbon Pledge, we have committed to disclose our funds’ carbon footprint and make it easier for customers to make sustainable choices.
- We analyse climate risks in our investment activities.
- Swedbank Robur launched a new climate strategy 2020.
- Swedbank Roburs climate targets are that by 2025, the aggregate fund capital will be aligned with the target of the Paris Agreement to limit global warming to 1.5 degrees Celsius and by 2040, the aggregate fund capital managed by Swedbank Robur will be placed in carbon-neutral investments..
- 100 % of the assets under management in Swedbank Robur is with consideration to sustainability.
Task Force on Climate-related Financial Disclosures
Swedbank has announced its support for the TCFD recommendations, a concrete tool to increase awareness of climate-related risks and opportunities in a time of uncertainty.
The updated governance model for the bank integrates a climate perspective through scenario analyses as well as new Key Risk Indicators for selected sectors. The scenarios used are New Policy Scenario (NPS, 3°C) and Sustainable Development Scenario (SDS, 1.5°C), both based on the IEA.The PACTA method is used for investments. During the work with scenario analyses climate-related risks and opportunities were identified and documented. An important lesson from the scenario analysis work in the pilot project was that the cross-functional working groups were a success. This has been confirmed in the process now being established for implementation in the future. The sustainability group will coordinate the work that the business areas perform, with expertise and support from Group functions such as Risk, Credit and Finance.
A number of strategic positions have been identified for the sectors that have undergone scenario analysis, one for the energy sectors for example is to further investment in renewable energy sources.
The bank is also working actively with a strategy for companies that are seriously embracing the transition, in order to be a proactive facilitator.
In the Credit Risk Outlook, an internal, forward- looking report that the risk department produces and shares with the business areas for use in their business plans and credit strategies, a climate perspective is integrated by identifying both transition risks and physical risks in various sectors.
Transition risks are especially apparent in shipping and offshore, energy, manufacturing and transports.
Physical risks, over a longer horizon, have been singled out in real estate management as well as agriculture, forestry and fishing. In the investment portfolio an elevated risk has been identified for assets owned by manufacturers that produce for customers in CO2-intensive sectors.
Targets, metrics and monitoring
Swedbank has been monitoring direct emissions for many years and working actively to reduce them. The efforts to understand the indirect emission exposure are intensified as the TCFD project progress.
Among other things Swedbank has tested its portfolios of commercial properties and mortgages with the Science Based Target Initiative, where we are collaboratively developing credible methods for defining future climate goals. Lessons from this work will be used to define targets in coming years in order to realise the transition to a climate-neutral society.