Íslandsbanki has published its initial estimates of the financed emissions for 2020 and 2019 according to the PCAF methodology. The greenhouse gas emissions associated with Íslandsbanki’s lending and investment activities were roughly 360 times higher than the direct emissions from the Bank‘s operations in 2020. In a single day the financed emissions were as high as the direct emissions from the Bank‘s operations in a whole year.
The results confirm that the biggest opportunity to be a force for good is through our products and services – empowering and encouraging our customers on their sustainability journey. A significant opportunity is given in financing the transition required to reach Iceland‘s ambitious Climate Action Plan and goal of achieving carbon neutrality by 2040.
In 2019, the financed emissions amounted to 358 kt CO2 eq, while in 2020 they were 163 kt CO2 eq. The pandemic had a large impact on the 2020 results as it led to a temporary reduction in emissions within important sectors. Loans to the industrial and transportation sector accounted for 54% of the total emissions although they constituted only 6% of the loan book. Mortgages on the other hand accounted for less than 0.5% of emissions but 37% of the Bank’s carrying amount. Even though it might have been obvious prior that mortgages cause less emissions than the industrial and transportation sector, it is important to confirm it. Those results will be utilized to map the path towards the goal of becoming net-zero by 2040. In addition, to be able to strategize improvements, one must know the starting point.
The Bank aims to publish its 2021 financed emissions later this year once financial statements of the Bank's customers have been received as the measurement is built on this information.