The Road to Net Zero – updated climate targets of Arion Bank

Arion Bank has published a report containing its updated climate targets for the period until 2030 and details of its efforts towards reaching the goal of net zero. These targets are applicable to the Bank’s own operations, mortgages, and business loans in the industries with the highest emissions in the Bank’s loan portfolio, as well as specified loan categories according to the methodology of the Science Based Targets Initiative (SBTi).

The targets are based on scientific scenarios aimed at keeping global warming within 1.5 degrees Celsius and which align with government targets on achieving net zero. The climate targets previously set by the Bank for reducing financed emissions in its loan portfolio have therefore been revised in accordance with the SBTi methodology, which includes scenarios from the International Energy Agency (IEA).

In setting these goals, the Bank also followed the guidelines of the Net-Zero Banking Alliance (NZBA). The NZBA guidelines are the most widely used globally for setting carbon reduction targets in financial institutions.

The Bank’s report on the road to net zero highlights actions that support and reinforce its target-setting, including initiatives related to green product offerings, policies, and risk management. There are still opportunities to further develop this pathway through additional actions, which will be pursued in connection with ongoing work on target setting.

The Bank aims to have its climate targets validated by the SBTi, under a new standard specifically designed for financial institutions, no later than mid-2027.

Arion Bank has set ambitious targets related to sustainability and responsible banking. Establishing climate targets is integral to efforts to help the Icelandic economy in its necessary transformation towards net zero.

The report can be read here.