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.

By 2025 it's our target to:

Increase positive impact

Facilitate more than EUR


in sustainable financing.

Decrease negative impact

Ensure that


of our exposure to large corporate customers in climate-vulnerable sectors is covered by transition plans.

Decreasing our financed emissions

Nordea’s largest emissions, 99.9% for 2022, come from our indirect emissions of financed customers and the companies we invest in, classified as our scope 3 financed emissions. Nordea has one of the most ambitious overarching objectives among banks: to reduce carbon emissions across our lending and investment portfolios by 2030 by 40-50% compared with 2019.

So far, between 2019-2022, Nordea has decreased its financed emissions from its lending portfolio by 19%. A key driver for this has been from large corporates, where the emissions are down by 36%. There are many contributing factors, including a decrease in the financing of oil, gas and offshore by more than 70%.


This we do by ...

Active engagement is Nordea’s strategic approach, as opposed to exclusion or denying companies our services. Massive investments are needed throughout society if we are to reach the Paris Agreement and we want to support our customers in this transition.. We are here to help our customers to address key sustainability issues and provide guidance.

De-selection or exclusion of specific activities will however also need to occur. Nordea has set a clear phase out for offshore, coal and unconventional oil & gas in our fossil fuel sector guideline. Where customers are not able or willing to transition, we will mutually consider our engagement and exposure.

Sector targets

Having joined the Net Zero Banking Alliance in October 2021, Nordea committed to setting sector targets. The first round of these targets was communicated in December 2022, supplementing previously communicated targets. Nordea will continue to set sector targets in carbon-intensive sectors and this work is scheduled based on climate vulnerability and data availability.


Guiding principles in the credit process

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.

The Equator Principles

The Equator Principles is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects. Nordea adopted the Equator Principles (EP) in 2007. Our analysts and other relevant staff have been trained in Nordea’s internal EP process.

The ten principles contained in the EP are organised into five workflow steps:

  1. Initial project review
  2. Project appraisal
  3. Project negotiation, commitment
  4. Monitoring
  5. External reporting

Nordea evaluates the borrower’s capacity to adequately identify, prevent, mitigate and manage key environmental and social risks and impacts of the project based on documentation provided by the borrower, independent environmental and social consultants and in certain cases site visits.

Nordea includes ESG matters in the initial business selection process. The detailed project appraisal and internal EP reviews are carried out by ESG Analysts working close to Nordea’s credit process. These persons have relevant education and working experience to support performing the task. The EP reviewer, when necessary, also proposes conditions related to environmental and social issues for loan agreements, participates in drafting the scope of work for independent consultants, communicates with other relevant project parties and monitors project compliance with EP. In the above tasks the EP reviewer co-operates with the rest of Nordea's deal team responsible for the financing of the transaction in question.

The EP reviewer presents the EP transactions to Nordea's Equator Principles Sounding Board (EPSB), which either supports or does not support the transaction based on EP compliance. The EPSB has 4-6 members who are senior experts and managers from relevant business and risk management units. EPSB’s statements are included in the evaluation of the relevant credit committee deciding on the financing of the transaction.

Nordea monitors the performance of all active projects in its portfolio to ensure compliance with environmental, social and other conditions. In case of any non-compliance, Nordea will determine an appropriate course of action together with the other lenders.

Nordea reports annually on transactions that have reached financial close. See our EP reports here

For more information about the Equator Principles, read here.

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