Case study: How Arbejdernes Landsbank works with its clients and customers to encourage sustainable practices

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.

As a financial sector entity, Arbejdernes Landsbank engages in continuous dialogue and collaboration with various stakeholders:

• Customers: The Bank’s primary stakeholders are its customers, and it focuses on maintaining close relationships and supporting them in making more sustainable decisions by offering financing solutions that are integrated into its advisory services.
• The Danish FSA: The Group maintains regular dialogue with the Danish Financial Supervisory Authority, participating in meetings and adhering to guidelines, including those set by the sustainability-focused team.
• Finance Denmark: Arbejdernes Landsbank actively engages with Finance Denmark through participation in working groups, such as those involved in interpreting legislation related to the EU Taxonomy and developing accounting policies for calculating financed CO2e emissions.
• Business Partners: The Bank collaborates with partners like Totalkredit and BankInvest, which actively pursue sustainability and green solutions aimed at reducing financed CO2e emissions. These partners play a critical role in delivering many of the Bank’s financial products and services.
• Data Centre: The Group partners with BEC Financial Technologies to enhance and develop digital solutions and participates in working groups to gather data for CO2e calculations and implement EU sustainability legislation.
• Organizations/NGOs: Arbejdernes Landsbank is involved in strategic partnerships with various organizations in order to listen to their views, apply knowledge and tools, and coordinate efforts together The Bank has engaged in dialogue and participated in initiatives led by the United Nations Environment Programme Finance Initiative (UNEP FI) and Global Compact Network Denmark.

How did Arbejdernes Landsbank work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?

In its 2023 PRB Reporting and Self-Assessment Template Arbejdernes Landsbank reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

The Group’s strategy for customer engagement is outlined in the “Policy on Corporate Social Responsibility and Sustainability,” which defines the framework for how the Group operates an environmentally, socially and financially responsible business.

Lending

Loans and credits are provided based on thorough and professional credit assessments. Arbejdernes Landsbank’s policy prioritizes financially sound activities with positive environmental impacts. This is achieved by incorporating ESG factors into the overall credit risk assessment for business customers, further detailed in the credit policies of A/S Arbejdernes Landsbank, Vestjysk Bank A/S, and AL Finans A/S. A key focus in business customer relationships is understanding their business and business models, so as to act as informed partners.

In 2023, the Group introduced an energy loan to support energy-efficient renovations and participated in the government-supported “Retire your boiler” initiative. Additionally, a partnership was formed to facilitate customer transitions to heat pump solutions, and a special loan offer for electric and hybrid vehicles was introduced.

For business clients, the Group provides a digital tool for CO2e calculations and ESG reporting. In 2023, new green financing options were implemented through the Group’s partners, and a Renewable Energy Competence Centre was launched to better serve customer needs.

Investments

The Group actively ensures that customers can invest responsibly through its product portfolio and integrates ESG factors into the selection of companies and investment associations invested in. Sustainability objectives are embedded in the investment solutions, aligned with return goals, as described in the “Policies on Responsible Investment and Integration of Sustainability Risks” for A/S Arbejdernes Landsbank and Vestjysk Bank A/S.

In 2023, the Group assessed customers’ sustainable preferences, which are now part of the investment dialogue alongside risk and time horizon preferences. ESG metrics were incorporated into online and mobile investment solutions, and investment products were updated to meet the requirements of Article 8 of the SFDR. Additionally, a new concept was developed to allow retail clients to invest in local renewable energy projects.

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:

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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 Arbejdernes Landsbank, 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.al-bank.dk/media/pvcpho2d/arbejdernes_landsbank_-_un_prb_reporting_and_self_assessment_2023.pdf

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