Arion Bank retains outstanding ESG rating from Reitun

Arion Bank retains outstanding ESG rating from Reitun

Arion Bank retains outstanding ESG rating from Reitun - mynd

Arion Bank has achieved the score “outstanding” in Reitun’s ESG rating, scoring 90 out of 100 possible points and placing it 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 35 issuers have been rated by Reitun. This is the third year in row the Bank has achieved this score.

Reitun said that the Bank had performed well in the ESG assessment and continues to be committed to ESG issues. Reitun noted that sustainability risk is formally defined as part of the Bank’s risk appetite and that the Bank had carried out a climate-related risk assessment of operations based on TCFD (Task Force on Climate Related Financial Disclosures). It concluded that it is positive that the board of directors and management are actively involved in sustainability.

It is important for financial institutions to integrate ESG into their asset management and lending businesses and Arion Bank is doing well in this respect according to Reitun. The Bank is committed to working in accordance with the United Nations Principles for Responsible Banking and is a signatory to PCAF, the Partnership for Carbon Accounting Financials. The Bank recently published its first report on financed emissions.

In mid-2021 the Bank published its green financing framework and has since held four green bond issues. The Bank has published an impact and allocation report and plans to do so every year. Arion Bank has placed added emphasis on its products and service offerings and has met with success in this area; the Bank’s green deposits account has proven popular and the Bank also offers green vehicle loans, mortgages and business loans.

The Bank takes into account ESG factors in its supply chain and is a market leader in this respect according to Reitun. Arion Bank has strong ties to the community and has adopted a new policy on grants which is closely aligned with the UN Sustainable Development Goals. The Bank manages its human resources effectively and job satisfaction remains high according to surveys.

The results reflect Reitun’s assessment that Arion Bank is determined to perform well in terms of sustainability and has achieved excellent results. The Bank is also well aware of the positive impact it can have on society and the environment and sets a good example in the Icelandic market.

Hrafnhildur Ólafsdóttir, project manager at Reitun:

“Arion Bank continues to perform well in terms of sustainability and therefore retains the outstanding score in the ESG rating by Reitun. The Bank is one of three companies that receive the highest score given and well above the average in all categories of the rating. There is great pressure on banks globally to perform well in terms of sustainability in their operations, e.g. product and service offerings, lending and asset management. The requirements made by society and the regulatory environment continue to increase which makes it ever more important for the Bank to be prepared. The Bank has huge potential to have a positive impact and it is pleasing to see the actions the Bank has already taken and plans to take.”

Benedikt Gíslason, CEO of Arion Bank:

“The requirements made by Reitun for companies’ ESG performance have increased since last year. We are therefore delighted that we continue to be among the Iceland’s most outstanding companies in this area. This year we have held two green bond issues and published a report on financed emissions, which is an important contribution to the Bank’s strategy on lending and investments. We have also continued to implement our focuses on sustainability throughout our business. This issue is of central importance to us and we are determined to do even better for the benefit of our customers and society as a whole.”

Arion Bank ESG rating - Summary of results 2022