Our approach to climate change
Global climate change is one of today’s most serious challenges. Scientific evidence points to substantial risks to the planet from climate change if we do not manage to limit global warming to 1.5 degrees compared to preindustrial levels. SEB has an important role to play in adjusting its strategy to further support its customers in the transition towards a low carbon economy in line with the Paris Agreement.
As a bank, SEB has both a responsibility and an ability to create financial solutions that accelerate and support the transition. We address climate aspects in financing and investments as well as in managing our direct impact. Environmental responsibility concerns the impact that we or our business partners have on living and non-living natural systems, including ecosystems, land, air and water. We incorporate environmental and climate considerations into strategic planning, business development, risk management, in credit assessments and customer selection processes.
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. 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.
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, we have set targets for our carbon emissions. Read more about our direct impact here.
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. This model is used as a tool to engage with customers in constructive dialogues about their decarbonisation strategies. Hereby we can support companies in transition with advisory services and financing for potential investment needs. The model also enables us to measure and report on the aggregate climate impact of our credit portfolio and to set strategic goals for shifting and aligning our activities with the climate objectives of the Paris Agreement. Read more about the Customer Sustainability Classification Model here.
Active part in the transition
SEB takes an active part in the global green transition. We have committed to several international initiatives targeting climate change. Among them is the UN-initiated Net-Zero Banking Alliance which SEB joined in 2021 and through which we commit to align our emissions from our lending and investment portfolios with pathways to net-zero by 2050 or sooner. Moreover, we participate in the ongoing development work in EU. Starting from 2018, SEB was a member of the Technical Expert Group that contributed to the development of the EU taxonomy, and we are today member of the expert group Platform on Sustainable Finance which advises on topics related to further developing the EU taxonomy.
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 (p.52–58) 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.
Our approach to fossil fuel
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 have a restricted approach to coal and 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.
Read SEB’s Policy on Fossil Fuel (pdf).