Case study: How Nordea identifies and works on strategic business opportunities to increase positive and reduce negative impacts

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.

Nordea is dedicated to fostering and maintaining strong, trusted relationships with its stakeholders. The bank actively seeks insights into their expectations and responds promptly with appropriate actions and engagement. Nordea has identified six primary stakeholder groups: customers, employees, investors, suppliers, supervisory authorities, and the broader society.

The bank maintains ongoing dialogue with all key stakeholder groups, with a particular focus on customers and investee companies, to understand the sustainability challenges and opportunities they encounter in their respective environments. This approach enables Nordea to address material sustainability issues effectively and to translate its sustainability commitments into tangible actions. Nordea’s strategy emphasizes dialogue over disengagement. Key engagement metrics include customer preferences (such as post-advisory surveys), active ownership activities (voting and engagement with investee companies), climate-related customer engagement (LC&I clients), ESG ratings, employee engagement (via People Pulse), and supplier sustainability assessments.

Additionally, Nordea undertakes specific initiatives to support vulnerable groups, such as the elderly, through information sessions to address questions and gather feedback. Nordea also provides dedicated senior customer service lines in Norway and Finland to assist older clients. Furthermore, the bank engages with customers on debt management by communicating clearly across multiple channels and monitoring feedback to reduce risks and improve their financial well-being.

How did Nordea identify and work on strategic business opportunities to increase positive and reduce negative impacts?

In its 2024 PRB Responsible Banking Progress Statement Nordea reports that it identified and worked on strategic business opportunities to increase positive and reduce negative impacts as follows:

As the leading financial services group in the Nordics, Nordea has the potential to make a substantial impact through the advice, products, and support provided to customers to facilitate sustainability-focused investment decisions. In DMA, Nordea identified key opportunities related to climate change and offers several sustainability-related products to support these efforts.

Nordea Sustainable Selection is Nordea’s fund offering that incorporates enhanced sustainability criteria. It was created to assist Nordic clients in navigating the wide range of products with varying sustainability features and levels of ambition available in the market. The framework for Nordea Sustainable Selection requires both the product and its provider to meet a set of established sustainability criteria. The offering includes both Article 8 and Article 9 products as defined by the EU Sustainable Finance Disclosure Regulation (SFDR). As the market evolves and customer demands increase, Nordea’s sustainable product range will continue to expand and develop. In 2024, Nordea introduced a new product category called Sustainable Selection Improve, which emphasizes active ownership with specific, measurable engagement targets aimed at enhancing the sustainability profile of portfolio companies. Nordea set a target for gross flows into Nordea Sustainable Selection funds to reach 33% of total flows by 2025, supporting the Group’s climate objectives to reduce emissions in the investment portfolio by 40-50% by 2030 compared to 2019 levels. By the end of 2024, the share of gross flows into Nordea Sustainable Selection funds had reached 23%.

Nordea’s sustainable and sustainability-linked finance products play a key role in integrating sustainability into the bank’s funding and liquidity strategies by offering sustainable investment options to pension funds and other bond investors. The Nordea Green Funding Framework and the Sustainability-Linked Loan Funding Framework mark significant progress toward embedding ESG and sustainability considerations into core operations, by establishing clear assessment criteria and management practices for proceeds. In 2024, Nordea issued over EUR 3.6 billion in sustainable funding across four currencies, bringing the total outstanding sustainable issuance to more than EUR 14 billion. Green bonds generally offer lower yields and enjoy stronger investor demand compared to conventional bonds. The cost of fund benefit or “greenium” that Nordea receives for green bonds is passed on to business units and ultimately to customers on a quarterly basis.

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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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 Nordea, 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:

https://www.nordea.com/en/doc/nordea-principles-for-responsible-banking-2024.pdf

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