Nordea provides financing to customers’ businesses, mortgages and other activities. We want to use that opportunity to increase the positive impact by financing sustainable activities and, at the same time, decrease the negative impact by financing the transition away from high carbon emitting activities.
Our focus is to support and strengthen our customers through periods of change and enable them to reach new goals. We have a long term perspective and we firmly believe that companies with sustainable business models carry lower financial and reputational risk. It is about increasing our customers’ resilience and to future-proof our business and the businesses of our customers.
Most of our emissions (99.9% in 2024) are indirect and stem from the customers we lend to and the companies we invest in. These are classified as scope 3 financed emissions. We have one of the most ambitious overarching objectives among banks: to reduce carbon emissions across our lending and investment portfolios by 40–50% by 2030 compared with 2019.
Between 2019 and 2024, we decreased our financed emissions in the lending portfolio by 36%. A key driver for this was the large corporate segment, where our financed emissions from oil and gas decreased by 74% and our financed emissions from offshore decreased by 96%.
As a long-standing member of the Net-Zero Banking Alliance (NZBA), we are committed to setting sector targets. The first round of these targets was communicated in December 2022, supplementing previously communicated sector targets.
We set sector-specific targets as one of our transition planning tools. The sectors in scope for target setting are selected based on their contribution to the total financed emissions profile of our lending portfolio, their climate vulnerability, the list of prioritised carbon-intensive sectors defined by the NZBA and the availability of sector-specific science- or policy-based transition pathways. Since 2021, we have set eight sector targets, based on Paris Agreement-aligned benchmark scenarios. Each year, we assess whether further sectors should be in scope for target setting.
Nordea’s Code of Conduct describes the high-level ethical principles that guide our business and includes aspects such the environment, labour rights, commitment to human rights, the right to privacy, and anti-bribery and corruption. The Code of Conduct is a central steering document for our financing operations together with our sector guidelines and our sustainability policy. These documents guide Nordea’s ESG assessments in our risk management and due diligence processes.
ESG assessments are performed for both lending and investment portfolios of Nordea’s balance sheet to identify, evaluate and monitor material ESG-related risks. These processes are being enhanced through a multi-year implementation programme and we provide detailed descriptions of these processes in the Capital and Risk Management report.
For corporate borrowers, in summary, ESG assessments are performed according to the size and type of the transaction and the customer’s internal segmentation. ESG-related risks identified qualitatively as material at customer level provide input to the credit risk assessment to reach conclusions on the customer group’s risk level included in the credit memorandum. Approvals are made according to the established credit decision-making process. For customers associated with a high level of ESG-related risks, decisions are escalated to higher-level credit committees where relevant.
Climate-related transition risks have since 2021 been assessed with an enhanced focus through the Climate Risk Assessment Tool (CRAT), for the largest exposures in climate-vulnerable industries for Business Banking (BB) and Large Corporates and Institutions (LC&I) business areas. The key components of the assessment include counterparties’ greenhouse gas (GHG) emissions intensity developments, corresponding quality of their transition planning and the resulting impact of climate-related transition risks on customer repayment capacity. This analysis is aligned with the Group targets on financed GHG emissions reductions and transition plan coverage.
For mortgage borrowers, the main ESG-related risks relate to collateral energy efficiency and physical hazard exposures. In 2022 Nordea has focused on assessing the available energy efficiency information for our mortgage portfolio and long-term exposure to physical hazards in a changing climate.
Nordea exited the risk management framework the Equator Principles in May 2026, for further information on the implementation of the Equator Principles in 2025 contact sustainability [at] nordea.com (sustainability[at]nordea[dot]com).
