Case study: How KLP Banken works with its clients and customers to encourage sustainable practices

KLP Banken AS, entirely owned by Kommunal Landspensjonskasse mutual insurance company (KLP), operates with two subsidiaries: KLP Kommunekreditt AS and KLP Boligkreditt AS. The bank provides straightforward, competitively priced banking products and services, supported by effective digital solutions for easy setup and management. Through these offerings, KLP Banken also aims to enhance the appeal of companies that have selected KLP as their pension provider, positioning them as attractive employers. KLP Banken 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 2024 PRB Reporting and Self-Assessment Template by KLP Banken, 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:

• • • Principle 3: Clients and Customers
      • 3.1 Client engagement
    • Principle 4: Stakeholders
      • 4.1 Stakeholder identification and consultation

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.

KLP Banken shares a similar set of stakeholders as KLP (please refer to the stakeholder overview for details).

The primary stakeholders of KLP Banken include customers from both the retail and public sectors as well as its owners, which consist of municipalities.

Customers in the public sector can be categorized into two groups: general customers and those who also serve as owners. The bank’s advisors maintain regular contact with customers, and in 2023, KLP Banken conducted 190 meetings with them. These interactions provide KLP Banken with valuable insights into the key issues and challenges its customers face.

In addition to these meetings, KLP Banken participates in seminars, expert panels, and events that benefit both the institution and its customers. In 2023, KLP Banken contributed to various conferences addressing topics like “Scope 3 emissions in municipalities,” “transition financing for ports,” and “local sustainable transition.”

For KLP Banken, consulting and collaborating with relevant stakeholders, including interest organizations, is vital. This engagement provides KLP Banken with important insights and expertise that inform its sustainability initiatives. KLP Banken also values the opportunity for dialogue and knowledge sharing with other banks. Maintaining open communication with its customers and various stakeholders is essential as KLP Banken strives to achieve its goals moving forward.

Collaboration is also crucial when tackling complex challenges. In 2023, KLP Banken initiated a pre-project in partnership with several other organizations to explore ways to map financed emissions within the public sector. This effort will continue into 2024.

KLP Banken is committed to being a leader in the transition toward a more sustainable society and has served as the pilot owner for the project “transition financing for ports.” Through this initiative, KLP Banken and its project partners have established a framework with specific criteria that must be met to qualify for transition financing for ports. This framework was launched in the spring of 2023, and KLP Banken is currently working with several ports to encourage adoption of these standards.

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

In its 2024 PRB Reporting and Self-Assessment Template Groupe KLP Banken reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

KLP Banken has established practices to promote sustainability in its interactions with customers.

PUBLIC MARKET
In the public sector, the bank maintains close and often long-term relationships with its customers, the majority of whom are also owners of KLP. This fosters dialogue on sustainability, corporate responsibility, and climate-related issues. KLP Banken strives to be a catalyst for sustainable decision-making among municipalities in public administration. A key focus of KLP Banken’s discussions and support for customers during their transition is the building sector, where KLP Banken advocates for the renovation of existing structures rather than new construction.

To enhance awareness of the Principles for Responsible Banking (PRB) and sustainability, KLP Banken has created standardized slide decks outlining the bank’s commitment to PRB, along with guidance on best practices for sustainability. These materials are utilized in meetings with public sector clients.

KLP Banken has established goals that incentivize employees to promote sustainable practices and provide information to clients. Sustainability is a core topic in KLP Banken’s discussions with public customers, and KLP Banken aims to empower municipalities and their associated businesses to make informed and sustainable choices regarding municipal finances and investments.

In 2022, KLP Banken introduced a new framework for integrating sustainability into the credit processes for public sector lending. For municipalities and county authorities, KLP Banken has developed a model for conducting annual sustainability assessments, evaluating customers on environmental impact, social responsibility, and corporate governance. For publicly owned companies, sustainability considerations will be incorporated into individual credit assessments. Through this process, KLP Banken aims to raise awareness and motivate its clients to improve their own impact.

KLP Banken also seeks to share insights from municipalities by disseminating information, highlighting successful projects, and showcasing customer stories.

RETAIL MARKET
In the retail market, KLP Banken engages with customers primarily through digital channels, as KLP Banken operates as an online bank. KLP Banken’s communications team regularly publishes articles and tips on its website related to sustainable consumer behaviour and general savings advice. KLP Banken is dedicated to enhancing its relevance and customer focus in its communications, especially on topics related to sustainability and finance. KLP Banken’s customer base includes a significant number of employees in Norway’s municipal and healthcare sectors, many of whom have relatively low to moderate income levels. KLP Banken recognizes the importance of tailoring sustainable financial advice to this group. To further its commitment in this area, KLP Banken has set a goal to achieve 25,000 unique page views on sustainability topics in 2024.

Norwegians invest considerable time and resources in home improvement and renovations. KLP Banken encourages its customers to be mindful of their environmental impact, prioritizing sustainable and energy-efficient solutions during home renovations. This initiative is linked to KLP Banken’s “green mortgage” product, which offers discounted interest rates for environmentally friendly renovations and energy-efficient homes. Additionally, KLP Banken advocates for a long-term approach to personal finance, advising customers to consider their individual CO2 footprints. Practical suggestions include creating a sustainable budget, minimizing unnecessary consumption, and enhancing savings for navigating global inflation. KLP Banken also emphasizes the importance of maintaining accessible funds for anticipated expenses as part of a more sustainable and resilient lifestyle.

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

• • • FBRH is a GRI Certified Training Partner (Global), IEMA Training Centre and a member of CPD.
    • FBRH builds trust. Over 200 reviews from top professionals from around the world demonstrate our ability to build strong, trusting business relationships.
    • FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.

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 KLP Banken, 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.klp.no/om-klp/samfunnsansvar/rapporter-og-resultater/PRB-Reporting-and-Self-Assessment-Template – KLP Banken 2024 endelig versjon inkl attest.pdf

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