Climate Change Data

Environmental Metrics

ESG Focus Areas

• Good Health and Well-being
• Gender Equality
• Sustainable Cities and Communities
• Responsible Consumption and Production
• Climate Action

Environmental Achievements

• Reduced paper invoices to customers by 3 percentage points compared to 2018.
• Uses only renewable electricity with the “Good environmental choice” label.
• Green loan portfolio contributes to an annual CO2 reduction of 2,700 tonnes.

Social Achievements

• Main sponsor of Number 10, a football scholarship promoting Swedish football.
• Partnership with Childhood Foundation.
• Implemented fitness programs and offers subsidized sport and fitness fees and massage for employees.

Governance Achievements

• Well-functioning whistleblower function.
• Continuous training in security, ethics, and money laundering.
• No whistleblower incidents reported in 2019.

Climate Goals & Targets

Environmental Challenges

• Risk of reduced lending volumes due to further regulations in the automotive sector (e.g., Bonus Malus).
• Risk of the bank becoming dependent on key employees.
• Risk of wrong recruitment.
• Risk that the bank does not comply with banking rules and regulations.
• Risk that the bank does not fully comply with money laundering regulations.
• Risk of internal irregularities.

Mitigation Strategies

• Working closely with Volvo Cars, Polestar, Renault, and AB Volvo to drive sales and financing of electric cars and buses.
• Developing new solutions with a sustainability focus in CarPay Fleet business area.
• Partnership with E.ON offering biogas option to Volvo card customers.
• Regular monitoring by Regulation Compliance Manager.
• Verifying the identity, purpose of business, and principal of business customers to prevent money laundering and terrorism financing.

Supply Chain Management

Climate-Related Risks & Opportunities

Transition Risks

• Reduced lending volumes due to regulations in the automotive sector.

Opportunities

• Increased financing of electric and hybrid vehicles.

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (UN SDGs), UN Global Compact, ISO 26000 (GAP analysis conducted)

Third-party Assurance: KPMG AB

UN Sustainable Development Goals

• 3
• 5
• 11
• 12
• 13

Sustainable Products & Innovation

• CarPay
• Green bonds

Environmental Metrics

ESG Focus Areas

• Economic sustainability
• Ecological sustainability
• Social sustainability
• Responsible corporate governance

Environmental Achievements

• Increased share of rechargeable vehicle orders to 84% (from 68% in 2021) in Fleet business.
• Issued four green bonds totaling SEK 1.5 billion, increasing the volume of green bonds to SEK 4.1 billion by year-end.
• Green loan portfolio contributes to an annual CO2 reduction of 5,742 tonnes.

Social Achievements

• Launched MOVE initiative, a health and well-being program for employees, resulting in 86% of employees reporting having the right conditions to be their best selves from a health perspective (target was 80%).
• Signed a cooperation agreement with Ljung & Sjöberg AB to address alcohol, drug, and gambling problems in the workplace.
• 93% of employees reported not being subjected to victimization at work, and 82% felt free to express their opinions.

Governance Achievements

• Updated green bond framework, maintaining a Medium Green rating and introducing stricter conditions for assets.
• Updated internal company vehicle policy to prioritize zero-emission vehicles.
• Updated purchasing policy to incorporate sustainability criteria for suppliers.

Climate Goals & Targets

Environmental Challenges

• Risk of becoming dependent on key employees.
• Risk of recruitment errors.
• Risk of insufficiently sustainable lending leading to downgraded rating and borrowing ability.
• Risk of reduced lending volumes and changes in residual values due to the transition to electrified vehicles.
• Risk of non-compliance with banking rules and regulations.
• Risk of non-compliance with money laundering regulations.
• Risk of internal irregularities.

Mitigation Strategies

• Providing good physical and psychosocial work environments, opportunities for personal development, and zero tolerance for victimization.
• Implementing regular monitoring by the compliance officer to minimize risks of non-compliance.
• Assessing and minimizing the risk of operations being exploited for money laundering or terrorist financing by checking transaction purpose, identity, and true principal of corporate customers.
• Focusing on sustainable lending practices and transitioning to a greener portfolio.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Updated purchasing policy with requirements for working conditions, environment, safety, and quality.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Rapid transition to climate neutrality increasing transition-related risks; risk of downgraded rating and borrowing ability if lending is insufficiently sustainable; risk of reduced lending volumes and major changes in residual values due to the transition to electrified vehicles.

Opportunities

• Opportunities in a market transitioning to one that is increasingly climate smart; contributing to greener mobility by enabling the financing of fossil-free vehicles.

Reporting Standards

Frameworks Used: TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Green car loans (including green borrowing, subscriptions for green car washes, and bonus charging rewards).

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Economic sustainability
• Ecological sustainability
• Social sustainability
• Responsible corporate governance

Environmental Achievements

• Increased proportion of green bonds in overall outstanding bonds volume to 43% (SEK 5.6 billion) as of 31 December 2023.
• 69% of all new vehicles in stock were rechargeable in 2023 (compared to 60% Swedish market share).
• Proportion of rechargeable vehicles in overall stock increased to 33% as of 31 December 2023 (from 24% the previous year).
• Annual CO2 reduction of 8,226 tonnes from loan portfolio financed by green bonds.

Social Achievements

• 95% of employees reported not being subjected to victimization (harassment, discrimination, or sexual harassment) in the past 12 months.
• 86% of employees reported feeling free to express their opinions in their team.
• Improved gender balance in the bank's board and management team.
• Introduced free feminine care at both offices and guidelines for an inclusive meeting culture.
• Annual employee survey to assess work climate, commitment, leadership, and employer attractiveness.

Governance Achievements

• Awarded a gold sustainability rating in the 2023 EcoVadis assessment.
• Signed first bank financing linked to sustainability goals (reducing CO2 emissions and promoting equal opportunities).
• Well-functioning whistleblower procedure and ongoing staff training in security, ethics, and money laundering.
• No whistleblower incidents reported in 2023.

Climate Goals & Targets

Environmental Challenges

• Risk of becoming dependent on key employees.
• Risk of recruitment errors.
• Risk of insufficiently sustainable lending leading to downgraded rating and borrowing ability.
• Risk of reduced lending volumes and major changes in residual values due to the transition to electrified vehicles.
• Slowing pace of electrification due to recession and government policy changes.

Mitigation Strategies

• Providing good physical and psychosocial work environments.
• Focusing on personal development and zero tolerance of victimization.
• Accelerating the transition to climate neutrality.
• Prioritizing initiatives that accelerate the transition to efficient, fossil-free mobility.
• Working closely with Volvo Cars, Polestar, and AB Volvo to boost sales and financing of EVs and electric and hybrid buses.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Internal guidelines for selecting partners
• Updated purchasing policy with requirements for working conditions, environment, safety, and quality.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Downgraded rating and borrowing ability if lending is insufficiently sustainable
• Reduced lending volumes
• Major changes in residual values due to the transition to electrified vehicles

Opportunities

• Accelerating the transition to climate neutrality

Reporting Standards

Frameworks Used: TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 5: Gender Equality
• Goal 11: Sustainable Cities and Communities
• Goal 13: Climate Action

Bank's business strategies are designed to contribute to these priority sustainability targets.

Sustainable Products & Innovation

• Green bonds
• CarPay (digital solution)

Awards & Recognition

• Gold sustainability rating in the 2023 EcoVadis assessment