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4 Nov 2022 – Articles

Danske Bank best bank at reducing carbon footprint of its loan book

A new survey from research unit Bloomberg Intelligence hails Danske Bank as the global leader when it comes to reducing the carbon footprint of its loan book.




Last week, Bloomberg News wrote that Danske Bank stands out as the best bank at reducing its financed carbon emissions – in other words, the carbon footprint resulting from our lending to customers.

“Climate change is one of the greatest challenges we face as a society. We have customers in sectors that leave a significant carbon footprint, and as a bank, we are part of the solution, and we are helping our customers with their green transition. A key prerequisite to being part of the solution is that we know our financed carbon footprint, so we can set clear and ambitious goals, report them and follow up with concrete actions,” says Samu Slotte, Global Head of Sustainable Finance at Danske Bank.

Bloomberg Intelligence’s assessment is based on carbon footprint estimates for both completed and future transactions. Estimates for future transactions are extrapolated from the specific reduction targets set by the bank.


We have customers in sectors that leave a significant carbon footprint, and as a bank, we are part of the solution, and we are helping our customers with their green transition.

Samu Slotte

Global Head of Sustainable Financ, Danske Bank 



CO2 targets for the most polluting sectors
On Wednesday, the European Central Bank (ECB) set a deadline of three years for when the 186 large banks subject to ECB supervision had to implement the ECB’s climate requirements. One of the requirements is calculating the carbon footprint of a bank’s portfolio.

Earlier this year, Danske Bank was the first Nordic bank to set specific CO2 reduction targets going forward to 2030 for lending to its most polluting sectors, with the aim of making its customer portfolio carbon neutral by 2050, in line with the Paris agreement. The targets cover CO2 emissions from customers Danske Bank has a stake in via its lending to corporate customers in the shipping, energy supply and oil & gas production sectors.

Read more about sustainable finance.


Facts about Danske Bank's 2030 interim targets

Shipping

By 2030, customers must have reduced their emissions per unit transported by 20-30% for the loan portfolio as a whole against a 2020 baseline. Emissions are measured according to the Poseidon Principles standard, which also ensures ongoing monitoring of the customers’ progress. We provide transition finance to shipping customers to ensure that they make efficiency improvements and to enable old vessels to be replaced with new and more efficient vessels that will often run on alternative fuel technologies.

Energy utilities

By 2030, customers must have reduced carbon emissions per kWh of power and heat generation by 30% for the loan portfolio as a whole against a 2020 baseline. Danske Bank customers operating in the utilities sector are already well advanced in relation to decarbonising because of their early and sustained investments in hydropower, wind energy and biomass.

Oil and gas exploration and production (upstream)

By 2030, Danske Bank’s lending exposure to oil and gas production businesses must be reduced by 50% for the loan portfolio as a whole against a 2020 baseline. There is currently no clear standard for measuring the transition of oil-producing companies. Instead of setting an activity-based target, we therefore target a reduction in lending exposure. The level set reflects the decline in investment needs of Nordic oil and gas production companies as defined in key net-zero scenarios, while also making it possible for support to be provided to the most efficient producers – also after 2030.