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Íslandsbanki publishes carbon neutrality report

Íslandsbanki has published a carbon neutrality report entitled On the Road to Net-Zero, which describes the Bank’s objectives and performance in connection with climate issues.

The report states, among other things, that the Bank expects its financed emissions – i.e., the carbon footprint from its loan portfolio – to shrink 60% by 2030 and 85% by 2040.

Íslandsbanki’s newly published carbon neutrality report shows that the Bank’s objective of having a net-zero loan portfolio by 2040 is an ambitious but achievable goal in most sectors, although it is clear that transitioning to clean energy in air transport and cargo shipping by sea will probably take longer.

Íslandsbanki had previously set a target of reducing the carbon footprint from its operations by 50% between 2019 and 2024. The Bank has also neutralised its operations in full with certified units ever since 2019. Earlier this year, Íslandsbanki published for the first time the carbon footprint from its lending activities, measured in accordance with PCAF methodology. The measurements showed that a single day’s emissions from the loan portfolio are roughly equivalent to the carbon footprint from the Bank’s operations for an entire year. It is clear, then, that the opportunity to be a force for good in connection with climate issues in Iceland lies mainly in supporting our customers in their journey towards reduced emissions.

Íslandsbanki has adopted a range of climate-related measures and is the only Icelandic bank among the founding members of the Net-Zero Banking Alliance (NZBA), an international organisation for banks dedicated to achieving carbon neutrality in their operations. Through the NZBA, banks representing 40% of banking activity worldwide share their experience and practices as they work towards this shared goal.

In On the Road to Net-Zero, Íslandsbanki has published its targets for specific sectors, which account for 61% of total lending and 71% of total emissions [from the loan portfolio]. Furthermore, the activities of Iceland Funds, the fund management company owned by Íslandsbanki, are included for the first time in measurements of financed emissions.

The path to net-zero by 2040 is certainly not an easy one, nor is it fully mapped out. But it is clear that if the Government’s ambitious targets are to be met, we must take bold steps and secure broad-based cooperation among all key stakeholders in Iceland. Íslandsbanki has pledged to be a force for good in the Icelandic business community, and we want to show through our actions that we are ready and willing to support our customers in their journey towards reduced emissions.

Kristrún Tinna Gunnarsdóttir,
Head of Strategy and Sustainability at Íslandsbanki