22-02-2024 08:00

Nordea sets sector target for cars and vans to lower emissions

Nordea is one of the first Nordic banks to set an emission reduction target for car and van financing that is science-based and aligned with the Paris Agreement. The aim is to reduce emission intensity by at least 40% by 2030 with 2022 as baseline.
happy girl sitting in car with window open and her hair blows in the wind

Road transport is critical on the path towards net zero which is why Nordea is focused on how we can contribute to the transition in our car financing activities. 

Head of Climate and Environment, Peter Sandahl.

Light duty vehicles, such as passenger cars and vans, are responsible for more than 25% of the global use of oil and around 10% of global energy-related CO2 emissions. In the Nordics it is between 10-20% of total CO2 emissions.

“We see an important role in making a positive environmental impact via our financing activities and accelerating the green transition in society,” says Head of Climate and Environment, Peter Sandahl. “We now have a strong coverage of sector targets, covering the vast majority of our financed emissions from our lending portfolio.”

Why does Nordea set sector targets?

Nordea sets sector emission targets as part of our transition planning for a low-carbon economy. With sector targets we manage climate-related risks and they are also part of our commitment to the Net-Zero Banking Alliance (NZBA). The aim is to reduce emissions and support the transition of the real economy and the sector targets are instruments in reaching Nordea’s portfolio-wide target to reduce financed emissions by 40-50% in the lending portfolio by 2030.

See all our targets here

The new target is a science-based emission reduction target, 1.5°C aligned, and covers lending to and leasing of cars and vans. The aim is to reduce emission intensity by at least 40% by 2030 with 2022 as baseline.

Christian Karas, Head of Nordea Finance.

“We now take a more active role in our car lending and leasing activities and are in a good position to meet the target,” says Christian Karas, Head of Nordea Finance. “We will focus our work and development to support and enable our customers in the transition.” 

Christian Karas explains that business decisions, product development and financing opportunities will be based on emission data to ensure a positive trend of reductions and that Nordea will follow up closely on the carbon footprint of its car financing portfolio. 

“Going forward ESG criteria will be embedded in our car financing strategy and will be used in our engagement with car dealers and customers. Moreover, we will initiate dialogues with local car dealer associations and car manufacturers with focus on low emission products. We’re already tracking our portfolio emissions and are seeing good progress with a downward trend in emission intensity.” 

About the target

Nordea wants to contribute to the green transition in society with its car and van financing activities and takes action to manage associated climate-related transition risks using the sector target as a transition planning tool.

Nordea’s target is to reduce emissions by at least 40% from 2022 to 2030 in line with the global net zero pathway from the International Energy Agency (IEA).  

  • The target covers customers’ scope 1 emissions (direct greenhouse gas emissions) and is focused on the use of the vehicle.
  • Physical emission intensity in gCO2e/km (grams of CO2 equivalent per kilometre driven) is used to measure emission reductions which is an industry-practice well known to customers.
  • The target set by Nordea is assessed to fulfil the 1.5°C requirement in line with the Paris Agreement and the global IEA net zero pathway which requires a 6% emission reduction per year.