Case study: How OP Financial Group identifies and works on strategic business opportunities to increase positive and reduce negative impacts
OP Financial Group consists of 93 OP cooperative banks and the central cooperative they own, along with its subsidiaries and affiliated entities. OP Financial Group employed 14,602 people in Finland and 144 in the Baltic countries in 2024. It is owned by 2.1 million owner-customers. OP Financial Group’s operations are organized into three business segments: Retail Banking (serving personal and SME customers), Corporate Banking (serving corporate and institutional clients), and Insurance (serving insurance customers). OP Financial Group is a signatory of the Principles for Responsible Banking (PRB) and is, accordingly, identifying and working on strategic business opportunities to increase positive and reduce negative impacts. Tweet This!
This case study is based on the 2024 PRB Responsible Banking Progress Statement by OP Financial Group 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
- Principle 4: Stakeholders
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- How OP Financial Group proceeded with stakeholder identification and consultation, and
- How OP Financial Group identified and worked on strategic business opportunities to increase positive and reduce negative impacts
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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.
As Finland’s largest financial services group, OP Financial Group maintains an open and ongoing dialogue with diverse stakeholders. Stakeholder engagement is a core element of the cooperative business model. Through this dialogue, one of the primary principles and objectives of stakeholder engagement is to identify areas for development within OP Financial Group’s corporate responsibility efforts. It is important for OP Financial Group to act as a partner that respects stakeholder values and is a dependable operator.
OP Financial Group determines the key ESG themes relevant to its operations by conducting numerous internal and external stakeholder surveys and questionnaires.
The ESG forum brings together key stakeholders identified by OP Financial Group, representing various fields and perspectives, including owner-customers, employees, environmental and social groups, as well as financial and business actors. In the ESG forum, OP Financial Group facilitates open discussions with different stakeholders, promotes important societal themes, and listens to those who may be affected by its activities. The forum unites representatives from stakeholder groups such as owner-customers, employees, environmental and social responsibility advocates, and different segments of the financial and corporate sectors.
Stakeholder opinions are considered in decision-making related to business, sustainability, and corporate responsibility initiatives. This includes updates and implementation of OP Financial Group’s sustainability programs across various business units and cooperative banks. Stakeholder feedback also influences product and service collaborations, as well as communication planning. The views of stakeholders are documented and shared with relevant governing bodies within OP Financial Group and communicated back to the stakeholders themselves.
Stakeholders have also been incorporated into OP Financial Group’s double materiality analysis. OP Financial Group’s due diligence process involves multiple functions, with customers, internal stakeholders, third-party experts, and other relevant parties participating as needed.
How did OP Financial Group identify and work on strategic business opportunities to increase positive and reduce negative impacts?
In its 2024 PRB Responsible Banking Progress Statement OP Financial Group reports that it identified and worked on strategic business opportunities to increase positive and reduce negative impacts as follows:
Responsible business is a key strategic focus for OP Financial Group. The group leverages the opportunities provided by climate and environmental perspectives in its product development efforts, seeking to provide sustainable financing and investment products to its customers. By the end of 2024, the total value of green and sustainability-linked loans issued by OP Group reached EUR 8.6 billion.
In 2024, OP Corporate Bank updated its Green Bond Framework for 2024 and issued a EUR 500 million senior green bond. Previously, OP Financial Group had issued four green bonds: the EUR 500 million Green Bond in 2024, the EUR 500 million green senior non-preferred bond in 2022, the EUR 750 million green covered bond by OP Mortgage Bank in 2021, and the EUR 1,000 million green covered bond in 2022.
Additionally, in 2024, OP Financial Group launched the OP-Sustainable Corporate Bond fund, which attracted initial investments of EUR 120 million. This is OP Financial Group’s first thematic fund dedicated solely to fixed income instruments. In 2023, OP Financial Group also launched a green loan to SMEs and housing companies to support green investments that help reduce environmental impact, along with an EIF guarantee granted on the basis of a green business model or for a green investment.
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.
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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 OP Financial Group, 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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