Climate Review 213 Group Environmental Management
Content 1. Emission development in the Swedbank Group 21 213 2 1.1 Results 213 2 1.2 Emissions per scope 3 1.3 KPI 4 1.4 Important changes 4 2. Detailed results for the Swedbank Group 213 6 2.1 Swedish operations 6 2.2 Estonian operations 6 2.3 Latvian operations 6 2.4 Lithuanian operations 6 2.5 Other countries 6 2.6 Autoplan (operational car leasing) 6 3. Focus areas for the Swedbank Group 7 3.1 Energy preference 7 3.2 Future areas to measure 7 3.3 Premises 7 3.4 Business travel 8 Swedbank Climate Review 213
1 Climate Review 213 Swedbank s sustainability strategy is based on its vision, values, and purpos Sustainability is integrated in the business model and consists of three main areas: financial sustainability, social sustainability and environmental sustainability. The environmental activities are based on the strategy for environmental sustainability that states: We help conserve social and natural resources. We work to reduce the use of the world s finite resources. We promote a stable climate and alternative energy sources. The goal is that the bank will lower greenhouse gas (GHG) emissions through all its businesses within the organisation and through lending and asset management. In keeping with the above scope and goal, climate targets on reducing the emissions were established in the Swedbank Group in 212. The targets state that the Group should reduce GHG emissions by: 15 per cent to 213 3 per cent to 215 4 per cent to 218 The base year of the targets is 21. The scope of the targets does not include Autoplan, which is a subsidiary of Swedbank AB, specialising in vehicle leasing. The reason for excluding Autoplan s emissions is that the company s business model aims to increase vehicle leasing thereby indirectly increasing emissions. Consequently, the model is not compatible with the climate targets for the Swedbank Group. Moreover, to enable emission comparisons with other financial institutions it is important to have similar measurement criteria. The purpose of the climate review is to annually present the results of the climate reporting process (described in the box below) by providing information on the achievement of Swedbank s climate targets and the environmental impact of its banking operations. The review findings support Swedbank in its work to develop activities in the identified focus areas in order to implement the most effective measures to reduce the environmental impact. The review examines and summarises data on GHG emissions caused by Swedbank s banking operations and enables Swedbank to monitor, evaluate and take action to reduce the emissions. The focus is to monitor the most common GHGs emitted by the operations carbon dioxide (CO 2 ), methane (CH 4 ) and nitrogen dioxide (N 2 O). Thus, the emissions are quantified annually and evaluated in the climate review conducted by the internal Environmental Management Group. Climate reporting a three step process 1. Data is collected on business travel, premises, company owned vehicles, long term leased vehicles, food, office supplies, paper and security transports. 2. The data is entered into the system Our Impact, administrated by U&We, using the Ecometrica software to calculate the emissions based on the carbon dioxide equivalent (CO 2 e) received from the GHG Protocol developed by the World Resources Institut The term CO 2 e is used to describe different GHGs in a common unit. For any quantity and type of GHG, CO 2 e signifies the amount of CO 2 which would have the equivalent global warming impact. This is relevant since not all GHGs have the same global warming potential (GWP). For the monitored emissions of the Swedbank Group the GWP differs, for CO 2 the GWP=1, for CH 4 GWP=25 and for N 2 O GWP=298. When the emissions are calculated they are third party verified by Deloitt 3. The results are presented in various channels internally and externally g. in the Sustainability Report, Climate Review and Investor questionnaires such as CDP. Swedbank Climate Review 213
2 1. Emission development in the Swedbank Group 21 213 The total emissions of the Swedbank Group gradually declined in 21 213, the development is displayed in the graph below. Looking closer at the downward trend, the emissions decreased by 4.2 per cent equal to 29 68 e since the base year emission level in 21 (excl. emissions from Autoplan). This means that the 218 target on 4 per cent reductions has been achieved 5 years in advanc The emission development ( e) of the Swedbank Group 8, 6, 4, 2, 21 211 212 e 3 per cent target 4 per cent target 213 Emissions ( e), divided per control unit 2, 15, 1, 5, 4 % Sweden target Autoplan Estonia Lithuania Latvia 3 % target Other countries An overview of the highest emitting areas in 213 is presented below. The most emitting area was premises, accounting for 45 per cent of the total emissions. Next-highest were long-term leased vehicles, accounting for 28 per cent of the total emissions, primarily through the Autoplan vehicles. Business travel was the third most emitting area accounting for 22 per cent of the emissions, mainly due to air travel. There are two main reasons for the emission reduction. First of all, large office areas (m 2 ) have been reduced in Ukraine and Russia as the operations and premises were phased out during 213. In previous years, Swedbank in Sweden, Estonia, Latvia and Lithuania also reduced its office spac The second reason is the increased share of renewable electricity. The use of renewable electricity was at first concentrated to Swedish operations but in 213 the share of renewable electricity increased in the Baltic countries, primarily in Lithuania. 1.1 Results 213 In 213, CO 2 e emissions spanning all company units totaled 58 983 tonnes, see below. Swedish operations accounted for the highest emissions and Autoplan for the second-highest emissions. Autoplan is reported separately from the Swedish operations as it accounts for significant emission levels generated by operationally leased vehicles. According to the GHG protocol the responsible unit for emissions generated by operational leasing is the lessor. Accordingly, Autoplan are monitored and evaluated individually. It is important to note that in 213 Autoplan became the second-largest emitter in the Group for the first tim Swedbank in Estonia accounts for the third-highest emission levels. Although the Estonian operations are much smaller than the Swedish ones, the total emissions are not that different. This is due to high energy emission factors in Estonia 1. Emissions ( e), divided per control unit 3, 25, 2, 15, 1, 5, Security transports Premises Long term leased vehicles (Autoplan 15 772 ton) Business travel Company owned vehicles Office supplies Paper Emissions generated by the Swedbank Group originated from four main activities 88 per cent of total emissions were generated by cars, electricity, air travel and district heating. Out of this 88%, cars accounted for 3%, including emissions generated through Autoplan; air travel emissions accounted for 18 per cent of the total volume; and district heating together with electricity for 4 per cent. Food 1) Emissions factors for electricity use (g/kwh): Estonia: 114g Latvia: 119g and Lithuania: 337g. Source: IEA Swedbank Climate Review 213
3 Detailed distribution of the emissions ( e) in 213 2, 15, 1, 5, Cars Electricity Air travel District heating Additional emission sources in the Group are presented in the graph below. Together these 17 activities add up to 12 per cent of the total emissions in 213. Detailed distribution of the emissions ( e) in 213 2, 1,5 1, 5 Electricity (nordic mix) Security transports Estimated emissions Natural gas Employee owned cars Hotel night stays Office supplies Paper Rail District cooling Hired cars Taxi Landfilled waste Food Bus Water supply Electricity green tariff 1.2 Emissions per scope The GHG emissions generated by the banking operation both directly and indirectly can be classified into scopes, based on the source of the emissions. Scope 1 emissions are direct GHG emissions from sources that are owned or controlled by Swedbank. Scope 1 can include emissions from fossil fuels burned on site, emissions from owned or leased vehicles, and other direct sources. In 213, 2 per cent of the total emissions in the Swedbank Group were Scope 1 emissions. Scope 2 emissions are indirect GHG emissions resulting from electricity, heating and cooling generated off-site but purchased by Swedbank which accounted for 44 per cent of the total emissions in 213. Scope 3 emissions include indirect GHG emissions from sources not owned or directly controlled by Swedbank but related to Swedbank activities such as travel, office supplies, food and security transports (ibid). The Scope 3 emissions accounted for 54 per cent of the total emissions in 213. Swedbank Climate Review 213
4 1.3 KPI Key performance indicators (KPI) are used to evaluate the results of emission management and to benchmark the performance of the Swedbank Group to other businesses. The 213 KPI for the Group are presented in the table below. The KPIs for Estonia are generally higher than average which is due to high energy emission factors since the energy production in Estonia is more CO 2 -intensive compared to Sweden, Latvia and Lithuania. Likewise, the KPIs for Other countries are relatively high which is due to the lack of emission data from these operations. The calculation of the emissions generated by Other Countries are primarily based on the KPI emission/employee of the Group in 212 and updated numbers have been extrapolated from the number of employees in Other countries in 213. Emission development ( e) of business travel, 21 213 2, 15, 1, 5, 21 211 212 213 Business area e/ square meter e/ FTE e/ msek Swedbank Group.115 3.68 1.56 Swedish Operations*.53 2.6.628 Estonian Operations.232 5.96.568 Latvian Operations.7 1.65.146 Lithuanian Operations.79 1.77.285 Other Countries.183 5.76.847 * Excl. Autoplan 1.4 Important changes During 213, the emissions generated by business travel increased in the Group. The increase was mainly due to an increased number of flights within the Swedish operations. The opposite happened in real estate with emissions from premises declining by 35 per cent in 212 213 mainly due to an increased share of renewable electricity. In 213, cost savings generated through environmental initiatives were estimated. The total estimated cost savings achieved was almost EUR 2.2 million. In addition, the initiatives were estimated to generate a saving of 237 1.4.1 Business travel Business travel includes trips made by air, bus/coach, employee-owned cars, hired cars, hotel night stays, rail and taxi. The emissions from business travel in the Group peaked in 21. However, since then emissions underwent a downward trend until 213 when they started to increase again. The reason behind this was increased emissions from air travel in Swedish operations by 156 Total emissions generated by business travel in the Group in 213 were 12 684 The emission trend in 21 213 can be seen in the graph below. In 213, Group employees on business trips travelled more by air as these increased by 18 per cent. In 213, the Group accounted for almost 4 flights. Findings show that there are a few units responsible for a large part of the air travel. The emissions from air travel increased in 212 213 by 2258 e or 27 per cent in the Group as displayed below. Emission development ( e) from air travel, 21 213 15, 12, 9, 6, 3, 21 211 212 213 In 213 Group employees on business trips stayed almost 15 nights in hotels. In 21 213, the emissions generated by hotel night stays decreased from 1347 tonnes in 21 to 593 tonnes in 213 which is a reduction of 56 per cent. Taxi trips account for the opposite trend, reporting increased emissions in 21 213, from 144 tonnes to 193 tonnes which is an increase of 34 per cent. Since the base year, taxi trip emissions have consistently increased and the increase was intensified in 213. Swedbank Climate Review 213
5 1.4.2 Premises Premises include emissions generated by district cooling, district heating, electricity, incinerated waste, recycled waste, landfill waste and water supplies. The emissions generated by premises in the Group significantly declined by 35 per cent in 212 213, as seen further down. The main reason for this is the increased share of renewable electricity in the Baltic countries as well as a decrease in office space during 213. Emission development ( e) by premises, 21 213 5, 4, 3, 2, 1, 21 211 212 213 Details of electricity emissions are shown in the graph below. The downward trend has been constant but intensified in 212 213. However, 212 showed an increase due to revised emission factors for electricity use launched by the IEA (International Energy Agency). 1.4.3 Cost savings During 213 there were several environmental initiatives resulting in cost savings for the Group and a reduced environmental impact. The initiative generating the highest savings was the cash handling project in Sweden. The savings were due to the decreased number of employees, transports, banknotes/coin etc. Other initiatives resulting in savings were: amended agreement conditions with SJ, the train operator in Sweden, which reduced the number of flights taken between Stockholm and Gothenburg; a reduction of office space in all home markets; and energy efficiency initiatives in Latvia. The table below presents an overview of the cost savings in 213. Environmental initiative Estimated Annual monetary saving CO 2 e saving (ton) (EUR)* Payback period (year) Business travel 534 556 2 >2 Reduction of office 984 1 165 776 >1 space Energy efficiency 29 19 941 >3 Cash handling 227 3 9 >1 Total 1 774 5 641 917 * Currency calculation: numbers in SEK have been translated to EUR using the rate of SEK 8.7 = EUR 1 Emission development ( e) by electricity use, 21 213 25, 2, 15, 1, 5, 21 211 212 213 Swedbank Climate Review 213
6 2. Detailed results for the Swedbank Group 213 2. 1 Swedish operations The results for the Swedish operations in 213 show a 35 per cent decrease in emissions against 21 (the base year). The main results of the Swedish operations are presented below. Total emissions generated by Swedish operations in 213 were 17 541 The largest emitting area in 213 was business travel, accounting for 8872 e or 5 per cent of total emissions. Emissions from air travel increased by 226 e or by almost 3 per cent in 212 213. Emissions from security transports decreased from 524 e to 297 e or by 43 per cent in 212 213. During 213 additional fractions for waste was added in the Swedish operations increasing the waste from 363 e to 838 e in 212 213. Cost savings in 213 mainly generated by environmental initiatives resulted in savings of EUR 2 63 793. 2.2 Estonian operations The results for the Estonian operations in 213 show a 3 per cent decrease in emissions against 21 (the base year). The main results of the Estonian operations are presented below. Total emissions generated by Estonian operations in 213 were 15 466 The largest emitting area in 213 was premises, accounting for 13 779 e or almost 9 per cent of total emissions. Electricity emissions were reduced as the proportion of renewable electricity increased in 213. The reduction was 3432 e or 23 per cent compared to the emission level in 212. However the amount of MWh used in 212 and 213 was almost the same it only decreased by 6 per cent probably due to decreased office spac Emissions from air travel decreased by 129 e or by 59 per cent in 212 213. Paper consumption decreased consistently in 21 213 declining by 28 per cent or 21 e since 21. Cost savings in 213 were mainly generated by environmental initiatives which resulted in savings of EUR 22 982. 2.4 Lithuanian operations The results for the Lithuanian operations in 213 show a 3 per cent decrease in emissions against 21 (the base year). The main results of the Lithuanian operations are presented below. Total emissions generated from the Lithuanian operations in 213 were 4574 The largest emitting area in 213 was premises accounting for 2741 e or 6 per cent of total emissions. Electricity emissions decreased by 35 e or by 3 per cent compared to 21. The emissions from air travel increased by 188 e or by 3 per cent compared to 21. Cost savings in 213 were mainly generated by environmental initiatives which resulted in savings of EUR 17 212. 2.5 Other countries Other countries include Ukraine, Russia, Norway, China, Denmark, Luxembourg, US and Finland. The results show a 81 per cent decrease in emissions in 21 213. The main results are presented below. Total emissions generated from Other countries in 213 were 1273 In 212 213, emissions generated by Other Countries decreased by 64 per cent or 4429 e, 2.6 Autoplan (operational car leasing) The results for Autoplan in 213 show a 14 per cent increase in emissions against 21 (the base year). The main results are presented below. Total emissions generated from Autoplan in 213 were 15 772 The most common fuel used in the leased vehicles in 213 was diesel accounting for 87 per cent of the total fuel consumption. 2.3 Latvian operations The results for the Latvian operations in 213 show a 41 per cent decrease in emissions against 21 (the base year). The main results of the Latvian operations are presented below. Total emissions generated by Latvian operations in 213 were 3162 The largest emitting area in 213 was premises accounting for 1915 e or almost 6 per cent of total emissions. Paper consumption decreased consistently in 21 213 declining by 44 per cent or 31 e since 21. Cost savings in 213 were mainly generated by environmental initiatives which resulted in savings of EUR 28 734. Swedbank Climate Review 213
7 3. Focus areas for the Swedbank Group The results of the review identify two main areas to address in the upcoming years: premises and business travel. Autoplan is the second largest emitter in the Group. However, Autoplan s emissions are not included in the environmental target for 215 and 218 because the business objective of Autoplan is to increase its market shar Thus it is evident that emissions will keep on rising. Nevertheless, separate environmental targets for Autoplan will be set up in line with its financial targets. Autoplan promotes fuel saving in terms of g. eco-driving and instructions on correct tyre pressures etc. Looking at each individual control unit and analysing each emission data respectively in relation to the climate targets, one can see that Latvia has reached the 218 target and needs to continue its work to stay at the same level. Other countries have reached the 218 year target by a wide margin. Lithuania achieved a 3 per cent decrease in emissions whilst Sweden and Estonia posted a decrease of around 3 per cent, see the following tabl Control unit 21 baseline year 213 results 215 target 3 per cent less emissions 218 target 4 per cent less emissions Swedbank AB 72 279 43 211 5 595 43 367 Sweden* 27 123 17 541 18 986 16 273 Estonia 22 183 15 463 15 528 13 39 Latvia 5 352 3 161 3 746 3 211 Lithuania 4 72 4 574 3 291 2 821 Other Countries 12 914 2 472 9 39 7 748 * Excl. Autoplan 3.1 Energy preference Swedbank s sustainability policy states: Our definition of sustainable development is a development that meets present needs without compromising the ability of future generations to meet their own needs and the environmental policy states that: We are convinced that environmental awareness and responsibility makes business sense. In 213 the Swedbank Group s total energy use was 153 MWh of which 46 MWh was produced from renewable energy sources (wind and hydro power). The focus on moving away from coal-based energy sources has been present for many years and will continue in the Swedbank Group; since 21 electricity produced by renewable energy sources has been purchased by the Swedish operations. Nuclear power is not included in Swedbank s definition of a renewable energy source and has therefore not been chosen as an environmental friendly alternativ Listed below are examples of actions according to our policies regarding energy preferences: Swedbank actively tries to steer from energy-intensive ways of travelling such as air travel and should choose travel by train when possibl In the Baltic countries, natural gas is used as an energy source, however, when possible, biogas should be chosen instead. Swedbank has started to install heat recovery equipment from ventilation to generate hot water at its Latvian headquarters in order to increase the use of renewable energy. 3.2 Future areas to measure Areas of current importance, when monitoring and evaluating carbon footprints, are likely to be changed in line with new laws and regulations, political decisions and scientific research. For the Swedbank Group there are two main areas to concentrate on in next few years: The carbon footprint of Swedbank s investments, funds and credit. The emissions generated daily by employees commuting to and from work i. to examine the emission-saving potential of a different mode of travel. 3.3 Premises Rental agreements differ in Sweden and in the Baltic countries. In Sweden, a rental agreement often includes heating, cooling, water and sometimes even electricity. This is most often invoiced separately in the Baltic countries, thus providing financial incentives to lower consumption. From an environmental perspective it is beneficial when rental agreements exclude utilities since financial incentives weigh heavily in decision-making processes. However, the rental agreement for the new headquarters in Sweden is designed to provide both financial incentives and increased value for the brand to maintain low consumption aiming for a Green Building classification. This is therefore an important step in the development of existing and future rental agreements for the Swedish operations. In general Swedbank actively tries to use office space as effectively as possible i. open plan, and is positive to alternative ways of working. In the new Swedish headquarters, new ways of working will be launched in June 214 effectively minimising the size of the office space (m 2 ). This new way of working means that fixed workstations will not be allocated to any specific person. Moreover, in the Swedish operations, cash management projects, from transactions to relations, resulted in a change in demand making it possible to reduce Retail Banking s office spac Swedbank Climate Review 213
8 3.4 Business travel Swedbank is geographically widespread with 4 separate headquarters in each of its home markets. Beyond the home markets there are operations in other countries g. the financial centre is located in Oslo, Norway. Travel between the headquarters and LC&I s financial centre in Oslo is extensive, mainly by air. The numbers of flights in the Group in 213 are presented in the following tabl Route Number of flights in 213 Stockholm Tallinn 6 82 Oslo Stockholm 4 9 Stockholm Vilnius 3 976 Riga Stockholm 3 57 Total for these 4 destinations 17 862 (total number of flights in 213 was 29 262) The target for 214 is to reduce air travel by 5 per cent. To achieve this target it is important to put emphasis on the units having the most number of flights. By motivating the use of alternative meeting solutions such as digital conference meetings the number of flights can be reduced. Alternative meeting solutions will also have a positive impact on emissions from taxis, hired cars and hotel night stays. Swedbank Climate Review 213