19-10-2023 10:00

Nordea sets sector targets for power production and agriculture

The new sector targets are important tools in reducing carbon emissions across Nordea’s lending portfolio and in supporting our customers in two sectors that are crucial for a net-zero future.
Windmills

Sector targets are important tools as they break down our sustainability objective in relation to our financing activities within sectors and industries. and thus guide our work to support our customers’ journeys to reduce emissions. At Nordea, our aim is to become a net-zero emissions bank by 2050 at the latest. We were the first Nordic bank to publish a mid-term objective for 2030 to reduce emissions by 40-50% across our lending and investment portfolios in line with the Paris Agreement. 

The first round of sector targets was launched in December 2022 and covered shipping, residential real estate, oil and gas and thermal peat mining. To further support our 2030 objective, we have now set additional targets for power production and agriculture. 

Peter Sandahl, Head of Climate and Environment.

“We believe that by engaging with our customers and supporting their transition through financing and advising we can reduce emissions and accelerate the transition to a low-carbon and sustainable economy,” says Peter Sandahl, Head of Climate & Environment at Nordea. 

“Agriculture and power production are sectors that play an important part in reaching global climate goals and in enabling other sectors to decarbonise. These two sectors represent around 30% of Nordea’s financed emissions in our lending portfolio, so it's very positive that we have now detailed how to make further progress.”

With the new targets we have covered a majority of our financed emissions in the lending portfolio, but Nordea will continue to assess the need for further sector targets in carbon-intensive sectors. Peter Sandahl explains:

“We will assess the need to set additional targets based on thorough analysis. We’ve set an ambitious portfolio-wide 2030 target to reduce carbon emissions across the lending and investment portfolios, and sectors targets are essential for how we realise our ambitions and track our progress.” 

The targets

Power production

Our economies are going to require significant amounts of affordable, low-carbon electricity, and the decarbonisation of the energy system and our power generation is crucial for reaching net zero. 

Nordea’s target is to reduce the physical emission intensity of the power production lending portfolio by >70% from 2021 to 2030.

  • The scope covers lending to companies whose primary activity is power production (electricity generation) and covers the customer’s scope 1 and 2 emissions
     
  • Physical emission intensity, gCO2e/kWh, is used as the metric to measure real economy impact and aligned with industry standards 
     
  • The target is aligned with the Science Based Targets initiative recommendations, is assessed to fulfil 1.5C requirements and is well below International Energy Agency net-zero benchmark scenarios
     
  • Nordea will closely follow our customers executing their transition plans to phase out fossil-based production towards 2030

Agriculture

The agriculture sector is a key sector providing access to safe, affordable and nutritious food. At the same time, it’s necessary for the food production system to be sustainable. 

Nordea’s target is to reduce the economic emission intensity of the agriculture lending portfolio by 40-50% from 2021 to 2030.

  • The scope covers lending to companies whose primary activity is animal husbandry, crops, plantation and hunting and covers the customer’s scope 1 and 2 emissions
     
  • Economic emission intensity, tCO2e/EURm, is used as the metric to measure emission reductions 
     
  • The target is aligned to national agriculture targets in Denmark and Finland and to the SBTi Forest, Land and Agriculture (FLAG) target-setting tool and is assessed to fulfil 1.5C requirements
     
  • Actions by Nordea include climate screening, portfolio composition and supporting farmers in their green investments. 

Our commitment and how we report

Having joined the Net Zero Banking Alliance in October 2021, Nordea committed to setting sector targets. Nordea will continue to assess the need to set additional sector targets in carbon-intensive sectors based on climate vulnerability and data availability.  The progress and more details of the sector targets can be found in our Annual Report.