Sustainable finance disclosure at Arion Bank
and the taxonomy for sustainable investment
Act No. 25/2023 on Sustainable Finance Disclosure transposed two EU regulations into Icelandic law. Firstly, the Sustainable Finance Disclosure Regulation (SFDR); and secondly the regulation on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation).
The SFDR covers harmonized regulations for financial market participants and financial advisers concerning sustainability‐related disclosures in the financial services sector. The regulation requires that financial market participants and financial advisers publish information on how sustainability risk is incorporated into investment decisions and financial advice, and whether, and in such case how, the negative material impact on sustainability is taken into account. SFDR defines sustainability risk as an environmental, social or governance event or condition that, if it occurs, could cause a negative material impact on the value of the investment.
Arion Bank is considered to be a financial market participant and financial adviser as defined in SFDR and the Bank is currently implementing the legislation.
Sustainability Risk Statement – Article 3 SFDR
Information on how Arion Bank is aiming to introduce the analysis and assessment of sustainability risk into the investment decision process and investment advice can be found here.
Principal Adverse Impact Statement – Article 4 SFDR
Principal Adverse Impact Statement
Information on how Arion Bank‘s remuneration policy is consistent with the integration of sustainability risk – Article 5 of SFDR
In accordance with Article 5 of SFDR, a new section has been added to the Bank’s remuneration policy which states how the policy is consistent with the integration of sustainability risk in the Bank’s activities. The policy explains how the remuneration policy, e.g. through the Bank’s bonus scheme, ensures that employees integrate sustainability risk into the investment decision process and investment advice.
Arion Bank and sustainability
Arion Bank places great importance on environmental and social issues and good corporate governance in its operations. We want to act as a role model by promoting responsible and profitable business practices, which take into account the environment, the economy and the society in which we live and work. Arion Bank is involved in extensive partnerships in the field of sustainability and social responsibility, both in Iceland and abroad, and is a signatory to numerous treaties and declarations. For example, the Bank is a signatory to the UN Global Compact, the UN Principles for Responsible Investment), the UN Principles for Responsible Banking and UN Women.
In Iceland the Bank is a member of Festa – Center for Sustainability and one of the founding members of IcelandSIF, the Iceland Sustainable Investment Forum. The Bank is also one the founding members of Green by Iceland, a joint business and government forum on climate issues and green solutions. The Bank has been a signatory to the City of Reykjavík and Festa’s Declaration on Climate Change since 2015 and signed a declaration of intent on investment for a sustainable recovery devised by the Prime Minister’s Office, Festa – Center for Sustainability, the Icelandic Financial Services Association (SFF) and the National Association of Pension Funds (LL) in 2020. The Bank has also signed a declaration of intent concerning the Equality Scale, an initiative created by the Association of Icelandic Businesswomen (FKA).
Further information on sustainability at Arion Bank can be found here.