Lands­bank­inn’s sci­ence-based emis­sion goals veri­fied

Landsbankinn’s goals to reduce greenhouse gas emissions have been verified by the Science Based Targets initiative (SBTi). We are the first Icelandic bank to achieve this.
Austurbakki
16 February 2024

Landsbankinn’s goals are aligned with the aims of the Paris Climate Agreement to limit global warming to below 1.5°C.

Landsbankinn has undertaken to reduce emission under Scopes 1 and 2 by 95% before 2030 compared with 2019, the Bank’s reference year for the purpose of these goals. Landsbankinn has also obliged itself to continue to purchase renewable energy until 2030.

The Bank’s main impact is through financed indirect emissions under Scope 3. Our financed emissions fall under five categories and the SBTi addresses this division in its review of the goals and the verification process.

Scope 1 encompasses direct emissions from owned or controlled sources. Scope 2 refers to indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed. Scope 3 includes all other indirect emissions that occur in a company's value chain. Indirect emissions from lending activities also fall under Scope 3.

Lilja Björk Einarsdóttir, CEO of Landsbankinn: “We have worked systematically to achieve verification of our science-based goals for reduced financed emission. The most effective channel for the Bank to have a positive impact is through lending to corporates that are working effectively on sustainability. By emphasising sustainability in the lending process, measuring financed emissions and working towards verified, science-based goals to reduce emissions, we get results for society as a whole.”

More about SBTi

The process behind verification of science-based targets for emission reduction requires a great deal of work. Our journey began with the signature of the Climate Goals of Festa and the City of Reykjavík in 2015 but at the time, no methodology existed to measure financed emissions. Landsbankinn has participated in the development of standards and methods to that effect, working with other financial undertakings on an international setting. The PCAF methodology is the result of that work and PCAF is now used by most financial undertakings who measure financed emission. When the outcome of our measurements was ready, work began to set goals based on the outcome using the SBTi standard for financial undertakings.

Landsbankinn undertook to adopt SBTi goals and apply for verification in April 2022 and our goals were verified 12 February 2024. Landsbankinn’s goals will be published to SBTi's website on 22 February 2024.

Leading in sustainability

Landsbankinn has received excellent results in ESG risk ratings the past five years from rating agencies Sustainalytics and Reitun. According to the most recent ESG risk rating from Sustainalytics, the Bank is considered at negligible risk of experiencing material financial impacts from ESG factors. The Bank was rated 8.5 and is among the top 1% of regional European banks assessed by Sustainalytics. Landsbankinn also received an excellent score in Reitun’s newest ESG risk rating, or 90 out of 100 in class A3.

The Bank annually publishes detailed sustainability information in various reports, such as a GRI report, PCAF report on financed emissions and a PRB report on responsible banking. The Bank has adopted a Sustainability Policy that is revised regularly and includes clear sustainability goals. We work systematically towards four of the UN's Sustainable Development Goals, are a signatory of the UN Global Compact and the UN’s Principals for Responsible Banking. Further information about sustainability in the Bank’s operation is available here on our website.

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