The impact and risk factors related to climate change are increasingly in focus for Nordea and we take environmental factors into account when we lend money to companies, in particular in higher-risk sectors. All industry-specific policies and internal guidance have a sustainability section. We believe that transparent communication and good governance are the basis for good corporate behavior. In sectors where climate change is likely to have a major impact, we expect companies to demonstrate their ability to adapt to current and future regulatory changes.
We encourage companies’ transformation towards low carbon and more resilient business models. One way to support this is to provide relevant products such as green bonds and loans that companies and investors can use to demonstrate their climate change mitigating actions and sustainability.
Tools to help us integrate ESG into lending decisions
We have created – and continue to develop – in-house Environmental, Social, Governance and political risk assessment tools, which are aimed at ensuring a more holistic approach to considering ESG matters in our financing decisions.
For household and small and medium-sized enterprise customers, we now incorporate ESG analysis in the Know Your Customer process, focusing our efforts on potentially higher-risk cases. In Wholesale Banking, we continue the customer ESG evaluation with an upgraded tool, which fine-tunes the analysis with industry specific questions with regards to human and labour rights and environmental, health and safety management processes and targets.