Green deposits incorporated in Arion Bank’s Green Financing Framework

In 2020 Arion Bank announced the launch of a new green deposit account, called Green Deposits, the first Icelandic bank to offer such an account. At the same time the Bank launched a special financing framework for green deposits. Money deposited in Green Deposits is only allocated to projects which are intended to have a positive environmental impact. Green Deposits is a savings account designed for individuals, NGOs and companies wanting to contribute towards a greener future. The account is a non-indexed, demand account, which means savers can withdraw their money whenever they want.

The response to Green Deposits has exceeded all expectations and the Bank’s customers have already deposited more than ISK 11 billion into the account. Initially, funds in Green Deposits were used solely to finance green car loans, supporting the transition to sustainable energy in transport. Due to the popularity of Green Deposits the Bank broadened the scope of the account at the beginning of 2021 and extended it to projects involving emission controls and better waste management. The Green Deposits account has now been incorporated in the comprehensive Green Financing Framework which Arion Bank issued in mid-year and the separate green deposits framework has thus been discontinued.

The Green Financing Framework forms part of the Bank’s funding strategy and is used to issue green bonds and raise green deposits. It also enhances the Bank’s green product range, for example green loans to areas such as green energy in transportation, real estate, sustainable fisheries, emission controls and renewable energy.

The Green Financing Framework was assessed by the Norwegian ratings agency Cicero which rated the framework as Medium Green and rated governance as Good. Deutsche Bank advised on the framework. The Green Financing Framework is based on Green Bond Principles of the International Capital Market Association, ICMA. It also draws on the EU Taxonomy and the UN Sustainable Development Goals.

Arion Bank’s Green Financial Framework
Methodology Paper by Mannvit - Green Residential Buildings
Opinion from Cicero