Íslandsbanki is a positive role model for the domestic market and has received an outstanding score on Reitun’s environmental, social, and governance (ESG) assessment. The Bank was awarded a score of 90 points, the highest ESG rating that Reitun has issued to date. The average among Icelandic companies is currently 63 on a scale of 100 points.
As the name implies, the ESG assessment covers environmental, social, and governance criteria. Íslandsbanki scores highest in the social assessment, or 97 points. According to Reitun’s comments, the Bank performs well in the area of human resources and its workplace analysis shows a high level of employee satisfaction. Customer satisfaction and the relationship with the community are considered good, and the Bank receives maximum points for this category. In addition, the Bank receives a score of 88 in governance and 85 in environmental criteria.
One of the biggest risks for financial institutions relates to the way in which they incorporate ESG criteria into their asset management and lending activities. According to Reitun’s assessment, Íslandsbanki is working effectively on this front. The Bank has pledged to comply with the United Nations Principles for Responsible Banking (UN PRB), and it is a member of the Partnership for Carbon Accounting Financials (PCAF), a group involved in measuring the carbon footprint of lending and asset portfolios. Moreover, the Bank’s risk report for 2020 contains a separate chapter on sustainability and climate risk, in compliance with international Task Force on Climate-Related Financial Disclosures (TCFD) criteria. The ESG risk assessment for lending has been developed further and is designed to support customers on their own path towards greater sustainability. Among the tasks Íslandsbanki has undertaken is the publication of a sustainable financial framework in autumn 2020. The Bank has also issued sustainability-linked bonds and has increased its offerings of products that meet its sustainability objectives. For example, it offers favourable terms on sustainable corporate loans, eco-friendly car loans, green mortgages, and various green investments. The Bank’s own operations have been carbon-neutral since 2019, and it is now working towards the ambitious goal of achieving full carbon neutrality in all activities by 2040.