Climate change strategy

At SEB we are committed to supporting our customers in the transition to a more sustainable world. Addressing climate change therefore means that our lending, investments, and business development decisions must take climate impact into account. 

Taking part in the transformation

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, and therefore have extra focus on qualitative advice in our business relations.

Our strategy

In recent years, we have strengthened our focus even further on sustainability which is now part of the selected strategic initiatives in our updated corporate strategy and a key component of the business plan. Sustainability and climate related issues are also included in the business divisions’ respective business plans. We aim to respond to the needs of our customers, shareholders, employees and other stakeholders when providing financial services, operating our facilities and supporting our communities.

A number of strategic decisions have been taken as a result of the development linked to climate change. Examples include our decision to stop financing and investing in new coal producers and coal fired power generation, to grow the green loan portfolio consisting of assets contributing to lower carbon emissions, as well as to launch new products contributing to a greener society.

During 2019 we are building a framework to classify our lending portfolio and set targets, in relation to climate change impact. The purpose is to gradually transform our credit and investment portfolios to support a low carbon economy.

Read more at Sustainable Financing and in our Sustainability Report 2018.

Managing climate-related risk

Climate change and its impacts, such as extreme weather conditions, are becoming increasingly apparent risk factors. The physical risk of damage caused by climate change and risks arising from a transition to a low-carbon economy may have a negative impact on SEB’s credit portfolio, and on customers’ investments in SEB’s funds.

In 2018, SEB 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. Since then, the bank has initiated work to implement the recommendations.

 

Analysing sectors

SEB is developing a methodology to capture material sustainability impact as well as disruption risks in the credit analysis. Qualitative sector analyses are being performed on high climate change impact sectors, including energy, transport and the manufacturing industries. These are also expected to be the most affected industries in the transition to a low-carbon economy. With regards to physical risk, industries such as real estate, forestry and insurance are deemed to be more impacted.

By implementing the TCFD recommendations, our goal is to better understand, manage and communicate how transition- and physical risks will affect our financing and investment activities in different climate scenarios. This will be important for future strategic decisions and risk management.

Our approach to financing of coal

SEB is gradually shifting away from coal as coal is a high greenhouse gas emitting fuel per unit energy produced. SEB does not provide finance for greenfield coal power generation plants. However, we can support greenfield coal-fired power plants with committed usage of carbon capture technology, or equivalent technologies which substantially reduce greenhouse gas emissions. As regards legacy coal-based power plants, we support our clients with regular banking services as well as in making environmentally beneficial improvements, such as the transition to lower carbon intensity through investments in conversion to renewable energy sources.

SEB will not enter into new business relations with companies with major business in coal mining but will support clients in their transformations away from coal, including the provision of regular banking services.

Position statement on Climate Change.

Please note: Our position on climate change, which includes our approach to coal, is currently under revision.