Reitun gives Arion Bank outstanding ESG rating

Reitun gives Arion Bank outstanding ESG rating

Höfuðstöðvar Arion banka, Borgartúni 19 - myndHöfuðstöðvar Arion banka, Borgartúni 19

Arion Bank has achieved an outstanding score in Reitun’s ESG rating. The Bank gained the highest score, a feat achieved by only one other issuer, or 90 points out of a possible 100 and is placed in category A3. The rating is based on the Bank’s performance in environmental, social and governance (ESG) issues in its operations. The Bank performs well above average in all categories. A total of 34 issuers have been rated by Reitun.

In its summary of results Reitun notes that sustainability risk is now defined as one of the Bank’s principal risk factors and that sustainability has formally become part of the Bank’s organizational structure and is the responsibility of the board of directors and the CEO. Implementing ESG factors into asset management and loan operations is important for financial institutions and Reitun believes that Arion Bank is doing well in this area. The Bank is also committed to complying with the UN’s Principles for Responsible Banking and is a participant in PCAF, the Partnership for Carbon Accounting Financials. The Bank aims to measure the carbon footprint of its loan portfolio by the end of 2022.

In mid-2021 the Bank published its green financing framework and held its inaugural green bond issue. The Bank’s green deposit account, launched in mid-2020, has been warmly received, and the Bank also offers green car loans, green mortgages and green corporate loans. In addition, the Bank’s subsidiary, Stefnir, established three sustainable funds in 2021.

Reitun believes that human resources are in good order at the Bank and job satisfaction continues to be high. Environmental issues are also given due attention internally. The result reflects Reitun’s assessment that Arion Bank is determined to perform well in terms of sustainability and has already achieved substantial success in this area. The Bank is also well aware of the positive impact it can have on society and the environment and sets a good example for other market participants in Iceland.

Benedikt Gíslason, CEO of Arion Bank:

“Reitun has rated Arion Bank for the second time on our performance in terms of environmental, social and governance issues. The Bank has again been awarded an outstanding rating and we are naturally delighted with this. Since the last assessment by Reitun we have published a comprehensive green financing framework, held our inaugural green bond issue and made the first green corporate loans. We have also announced that we are guaranteeing that employees will receive 80% of their salaries during parental leave. We aim to make it easier for our employees to take parental leave and we hope that this measure will lead both to an increase in the number of fathers taking extended parental leave and in the number of women in the management team. The excellent rating the Bank has received from Reitun gives us the incentive to continue on the same path of sustainable and responsible banking.”

Ólafur Ásgeirsson, managing director of Reitun:

“The results reflect Reitun’s assessment that the Bank is focusing on and taking a firm stance on sustainability throughout its business. It has been given the highest rating, category A3, with 90 points in Reitun’s EFG rating. The Bank has great potential to have a positive impact and to inspire its customers to target greater sustainability. It has taken important steps and has this year placed added emphasis on sustainability in its product and service offering. It is very pleasing that the organizational framework for sustainability has been clearly defined and encompasses the board of directors and CEO. The Bank has achieved an outstanding ESG rating and the results also have a positive effect on the company’s valuation at Reitun.”

Arion Bank ESG rating - Summary of results 2021