We take an active part in the global green transformation, among others through international initiatives that are targeting this challenge. We follow closely the ongoing work in EU’s Action Plan on Sustainable Finance, and we endorse the UNEP FI’s Principles for Responsible Banking and the recommendations from the Task Force on Climate-related Financial Disclosures (see below), the initiative from G20’s Financial Stability Board. We want to make this important transformation together with our customers.
Our approach to climate change
Climate change is accelerating and has become the greatest and most urgent challenge of our generation. At SEB we recognise the importance of limiting the average global temperature rise to well below 2°C compared with pre-industrial levels and to strive towards limiting it to 1.5°C – in line with the Paris Agreement. To achieve this, a transition to a low carbon economy is vital. As a bank, we have both a responsibility and an ability to create financial solutions that accelerate and support the transition.
Managing climate change risks
We believe that one of the main drivers of the transition to a low-carbon economy will be the transformation of large corporates, especially in sectors with a material carbon footprint. SEB is a long-term major financial partner to Nordic large corporates and among the largest asset managers in the Nordic which makes us uniquely positioned to contribute to this transformation. Our ambition is to participate in the transformation by offering advisory leadership, innovative and sustainable financing, and investment solutions.
SEB's way of managing climate change risk is integrated in our overall business strategy and includes three areas:
- Support customers on their transition journeys towards a low-carbon economy. By signing the UNEP FI Principles of Responsible Banking, we have committed to align our strategy with the Paris Agreement. This includes supporting customers in meeting the objectives of the Paris Agreement through an orderly transition.
- Manage the bank’s climate impact. SEB’s impact on the climate is both direct through our own emissions and indirect through our customers’ emissions. In order to manage the bank’s direct impact, the bank sets targets for its carbon emissions. To manage the indirect impact, the bank has developed a customer sustainability classification model that is used for assessing corporate and real estate customers’ current and future climate impacts.
- Manage climate-related risks. We incorporate environmental, social and governance (ESG) risks in credit assessments and customer selection processes.
SEB has endorsed the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, a global initiative aiming to increase and harmonise companies’ climate-related financial disclosure to stakeholders. In the Annual and Sustainability Report 2020 we describe how we manage climate change risks, our direct and indirect climate impact and how we work to classify our corporate credit portfolio, based on information about our customers’ carbon emissions. We also present a climate scenario analysis for transition risks in the oil & gas sector. Read more in SEB’s TCFD report in SEB’s Annual and Sustainability Report 2020, p 52–58.
Our approach to fossil fuels
We firmly believe that there is a need for society to reduce its dependency on fossil fuel related products given their significant negative climate impact. In February 2021 SEB’s Board of Directors adopted a strengthened policy of fossil fuels. The policy includes a roadmap for how we will phase out our exposure to coal and to unconventional oil. It also strengthens SEB’s guidelines regarding environmentally sensitive areas such as the Arctic.
We will continue to gradually reduce our credit exposure to fossil fuels within the oil- and gas sector by applying a cap to exploration, production and oilfield services activities. This cap is lowered annually. In dialog with our customers, we will continue to engage for a transition where we see that it is possible, where customers have a clear plan for transformation, and where we as a bank can have a positive impact by for example financing renewable energy and new technology.
Our approach to coal
We have a restricted approach to coal which is stated in the strengthened sector policy on fossil fuel that was published in February 2021. We shall avoid entering into new business relationships with companies operating thermal coal mines or providing dedicated financing to thermal coal mines. For several years we have excluded financing of new coal-fired power plants.
For new projects and capacity expansion we also avoid providing financial services to, or invest in projects that are dedicated to thermal coal extraction, greenfield or brownfield thermal coal mining expansions as well a infrastructure projects that are dedicated to thermal coal. For existing operations we avoid providing financial services to, or invest in, companies engaging in the practice of mountain top removal. SEB will exit current business relationship where more than 5 per cent of the revenues by 2025 is derived from thermal coal mining. For Germany there is a time-limited exception. Learn more in SEB’s Policy on Fossil Fuel.