GRI index

Management approach

GRI: 103-1

Explanation of the material topic and its boundary

At the beginning of 2021 Arion Bank conducted a survey among stakeholders on sustainability in cooperation with the consultancy CIRCULAR Solutions which processes the results. The survey was sent to all employees and management as well as a sample of customers, suppliers, partners and shareholders. CIRCULAR also performed a materiality assessment for the Bank on the Bank’s impact in terms of lending and investment.

When selecting the material topic and its boundary under the GRI Standards we took into account the results of the stakeholder survey and the materiality assessment. See discussion here.

As in previous years we also look to the ESG reporting guide which Nasdaq Iceland and Nasdaq Nordic have published since 2017. These guidelines, updated in 2019, are designed to help stock market listed companies inform their stakeholders of the main issues relating to sustainability and to allow comparisons to be made.

Although the direct environmental impact of banking on the environment is not great compared with other sectors, we nevertheless believe it important to disclose information on this issue. Arion Bank wants to set an example in environmental and climate issues and every contribution, large or small, makes a difference. The Bank has set itself the goal of reducing emissions from its own activities by 55% by 2040 and it has been a signatory to City of Reykjavík and Festa’s Declaration on Climate Change since 2015 and has pledged to publish the results. When selecting material topics in connection with GRI Standards we choose those factors relating to emissions of greenhouse gases from the Bank’s activities we consider appropriate for publication.

We are nevertheless well aware that the Bank’s impact on environmental and climate issues is greatest when it comes to the services we provide to our customers, not least lending and asset management. We are committed to helping our customers and society as a whole reduce greenhouse gas emissions, guided by the targets of the Paris Climate Agreement and the UN Sustainable Development Goals. As we get a better understanding of the impact of our loan portfolio and investments we will publish information on this impact. This year we are publishing and Impact and Allocation Report parallel to the Annual and Sustainability Report which covers the allocation of funds which have been raised through green bond issues and green deposits in 2021. Deloitte has provided limited assurance that Arion Bank’s allocation of net proceeds from Green Financing Instruments are used to finance loans that meet the criteria of the Bank’s Green financing framework for the year 2021.

Responsible buying and how our suppliers perform in terms of environmental and climate issues are of central importance to us, and during the year we introduced a new ESG suppliers assessment. A code of conduct for suppliers, which focuses on sustainability and social responsibility, was introduced in 2021.

Human resources, equal opportunities, education and training, health and safety of employees are all critical components of the Bank’s operations and this is reflected in the Bank’s policies such as the human resources policy, education and training policy, equal opportunities policy and health and safety policy.

At the beginning of 2020 the executive committee of Arion Bank approved six Sustainable Development Goals which the Bank intends to focus on. These goals are number 5 on gender equality; number 7 on affordable and clean energy; number 8 on decent work and economic growth; number 9 on industry, innovation and infrastructure; number 12 on responsible consumption and production; and number 13 on climate action. These six Sustainable Development Goals are also used as a guide when selecting material topics and their boundaries.

All material topics and their boundaries concern Arion Bank. The Bank’s subsidiaries are not included in this report unless otherwise stated.

GRI: 103-2

The management approach and its components

The management of individual material topics in the GRI report undergoes the same process as other projects at the Bank, i.e. through the board of directors or senior manager and the appropriate divisions and control units.

In 2021 a sustainability committee was set up and the management of sustainability risk in connection with ESG factors was defined as part of the Bank’s risk management system. For further information see here.

Various strategies, policies and rules which address the topic of the report have been approved by the board of directors and executive committee of the Bank, including:

Strategy and vision
Sustainability Policy
Environment and Climate Policy
Human Resources Policy
Equal Opportunities Policy
Health and Safety Policy
Code of Conduct
Code of Conduct for Suppliers
Rules on the Handling of Complaints
Data Protection Statement
Rules on Measures against Money Laundering and Terrorist Financing
Conflicts of Interest

Arion Bank is also signatory to various domestic and international treaties and commitments on responsible banking.

Please refer to the GRI index for information on our measures concerning individual material topics.  

GRI: 103-3

Evaluation of the management approach

Deloitte has provided an opinion with limited assurance on non-financial reporting by Arion Bank in 2021 which is presented in accordance with the Global Reporting Initiative (GRI) and the Nasdaq ESG Reporting Guide.

Arion Bank achieved outstanding results Reitun’s ESG rating, scoring 90 out of 100 possible points and placing it in category A3. The assessment is based on the Bank’s performance in environmental, social and governance issues in its operations. Approximately 30 Icelandic issuers have been rated by Reitun and the average score is 67 points. See here.