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Íslandsbanki tops Reitun’s ESG rankings

According to Reitun’s new assessment of Íslandsbanki’s performance in the area of sustainability, the Bank works effectively at incorporating sustainability-centred thinking into its operations and is steadfast, responsible, and secure in its approach to sustainability issues.

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.

Read summary of results

Íslandsbanki is committed to being a role model in the Icelandic business community and has demonstrated this with its progress in the area of sustainability – the result of a coordinated effort by the Bank’s employees. We have also placed strong emphasis on integrating sustainability considerations into our operations alongside our profit objectives. We are exceedingly proud of our employees’ dedication to this endeavour and are delighted to see that the progress we have made is reflected in our ESG score from Reitun.

Birna Einarsdóttir
CEO of Íslandsbanki

Íslandsbanki addresses sustainability issues in a highly responsible manner, as can be seen in its outstanding performance on Reitun’s ESG risk assessment. The Bank receives an overall grade of A, scoring 90 points, the highest score given by Reitun to date. The entire sustainability framework is exemplary, and the Bank has formulated a clear strategy and made excellent progress towards incorporating it into its procedures and its employees’ mindset. The Bank has taken important steps towards implementing the sustainability strategy in its product and service offerings, thereby encouraging its customers to make even better progress in their own quest for greater sustainability. If the Bank continues on this path, it will continue to receive such scores and could even improve them if it makes further strides. We at Reitun wish Íslandsbanki the best of success with its initial public offering on the Nasdaq Iceland exchange.

Ólafur Ásgeirsson
CEO of Reitun