Arion Bank joins PCAF

Arion Bank has recently joined the Partnership for Carbon Accounting Financials (PCAF), a global partnership of financial institutions that work together to develop and implement a harmonized approach to assess and disclose the greenhouse gas (GHG) emissions associated with their loans and investments.

Financial institutions can have a major impact on their environment through loans and investments. The Bank’s loan portfolio currently amounts to ISK 900 billion, and in accordance with its climate and environment policy the Bank has set itself the target of assessing its GHG emissions. By joining PCAF, Arion Bank is partnering with more than 170 banks and investors throughout the world who have pledged to use PCAF methodology when assessing and disclosing the GHG emissions of their lending and investment portfolios.

By assessing the GHG emissions of its loan portfolio and investments, Arion Bank is seeking to facilitate target setting to reduce its GHG emissions. The Bank can thereby contribute to Iceland’s efforts to meet its obligations under the Paris Climate Agreement and other domestic and international environment and climate treaties.

Since 2015 Arion Bank has measured the carbon footprint from its operations in collaboration with Klappir Green Solutions. Since then, the Bank has managed to reduce own emissions by 35% from housing and vehicles. Over the last two years the Bank has also partnered the Iceland Carbon Fund on carbon fixation to mitigate the Bank’s GHG emissions.

Benedikt Gíslason, CEO of Arion Bank:

“Responding to the climate crisis is one of the greatest and most important tasks facing the global community and it is critical that we all make a concerted effort, not least banks and other financial institutions. In recent years we have measured and disclosed information on carbon emissions from the Bank’s operations, set targets and achieved good results. However, the greatest impact that banks have on the environment is through their lending activities and we now intend to assess this. Measuring the carbon footprint of a loan portfolio is a complex task and access to the necessary data is not always straightforward. However, the methodology developed by PCAF represents an effective approach which banks throughout the world are adopting. In order to improve the data behind the assessment, Arion Bank and other financial institutions have reached an agreement with Klappir Green Solutions to develop solutions whereby information on the carbon emissions of our customers is streamed directly to us. At Arion Bank we are increasingly directing capital towards projects which contribute to reducing greenhouse gas emissions in line with our green financing framework, green deposits and the recent green bond issue.”