Case study: How Íslandsbanki works with its clients and customers to encourage sustainable practices
Íslandsbanki is a comprehensive full-service bank, renowned for leading the financial services sector in Iceland. It provides a wide range of products and services, including savings options, lending, payment services, and investment banking services. Additionally, IS Funds, a subsidiary of Íslandsbanki, is a leader in fund management in Iceland. Íslandsbanki is a signatory of the Principles for Responsible Banking (PRB) and is, accordingly, working with its clients and customers to encourage sustainable practices and enable sustainable economic activities. Tweet This!
This case study is based on the 2023 PRB Reporting and Self-Assessment Template by Íslandsbanki, prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Which Principles for Responsible Banking have been addressed?
The Principles for Responsible Banking addressed in this case are:
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- Principle 3: Clients and Customers
- Principle 4: Stakeholders
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- How Íslandsbanki proceeded with stakeholder identification and consultation, and
- How Íslandsbanki worked with its clients and customers to encourage sustainable practices and enable sustainable economic activities
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Stakeholder identification and consultation
Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.
Íslandsbanki consistently engages with stakeholders including employees, customers, investors, and other partners on sustainability issues. In 2024, Íslandsbanki will conduct a double materiality assessment in accordance with CSRD requirements. This process will include a more structured stakeholder consultation process.
How did Íslandsbanki work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?
In its 2023 PRB Reporting and Self-Assessment Template Íslandsbanki reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:
Sustainability is becoming increasingly important in discussions with Íslandsbanki’s corporate customers. Over 25 meetings were held with corporate clients to discuss sustainability and net-zero objectives. Additionally, interest in sustainable financing options has increased by 24% year over year. Reflecting this trend, Íslandsbanki has expanded its educational materials on sustainability, including the publication of additional sector guidelines. Íslandsbanki is committed to creating positive incentives to accelerate investment in the transition needed to combat climate change. During the year, Íslandsbanki released its fourth set of sector guidelines, covering the construction, fishing, tourism, and retail and wholesale trade industries. By the end of 2023, 93% of all credit risk had been assessed from the perspective of ESG risk factors, up from 76% the previous year. This has provided a clearer understanding of where key sustainability-related risks lie within the loan portfolio. Íslandsbanki is dedicated to considering ESG criteria when assessing risk and determining loan pricing, and aims to incorporate sustainability risk into its corporate lending risk model.
UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet
With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.
FBRH Principles for Responsible Banking (PRB) Assurance:
First class PRB assurance services: The result of solid, hands-on ESG/ Sustainability experience
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- FBRH is a GRI Certified Training Partner (Global), ISEP Training Centre and a member of CPD.
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- FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.
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The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.
References:
This case study is based on published information by Íslandsbanki, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
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