Climate Change Data

Environmental Metrics

ESG Focus Areas

• Anti-Money Laundering (AML)
• Know Your Customer (KYC)
• Governance
• Risk Management

Governance Achievements

• Comprehensive remediation plan underway to address AML/KYC deficiencies (as of 2022)

Climate Goals & Targets

Environmental Challenges

• Extensive money laundering through Danske Estonia branch (2009-2016)
• Inadequate AML and KYC systems and procedures at Danske Estonia
• Incompatibility of Danske Estonia's IT platform with Danske's main platform, hindering effective monitoring
• Weak supervisory oversight of Danske Estonia's compliance and AML functions
• Misleading statements and omissions in public reports regarding AML compliance
• Deceptive acts to conceal AML and KYC deficiencies from regulators and correspondent banks

Mitigation Strategies

• Closure of NRP accounts (largely in January 2016, with some continuing until April 2016)
• Danske Estonia branch closure in 2019
• Comprehensive financial crime remediation plan under the supervision of the Danish FSA (as of 2022)

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Society
• Business
• Financial Literacy
• Employees
• Environment

Environmental Achievements

• 28% reduction in electricity consumption since 2009
• All business premises in Norway became Eco-Lighthouse certified
• 72% reduction in GHG emissions in Ireland from 2012 level
• CO2 emissions offset to achieve carbon neutrality for five consecutive years

Social Achievements

• Launched a new loyalty program for personal customers in Denmark with 1.2 million sign-ups
• Held more than 50 Step-by-step meetings for senior citizens
• Launched MobilePay app with 1 million downloads in Denmark
• Continued financial literacy programs reaching 5,000 children and 200 schools

Governance Achievements

• Implemented a new investment procedure excluding sovereign bonds from countries with high risk of systematic human rights violations
• Implemented a new system for reporting suspicions online (whistleblower system)
• Adopted a new diversity policy with targets for women in executive and board positions by 2017

Climate Goals & Targets

Environmental Challenges

• Negative perception of the Group in the Danish media
• Cost cutting and staff reductions
• High CO2 emissions from air travel
• Need to improve accessibility of digital solutions for some customer groups

Mitigation Strategies

• Initiated a DKK 1 billion cost-savings program
• Implemented measures to reduce electricity consumption from IT equipment
• Aiming to cut travel expenses by 25% in 2014
• Developing a simplified version of eBanking for senior citizens and other customers with special needs

Supply Chain Management

Responsible Procurement

• Screening of all suppliers based on UN Global Compact and other international standards

Climate-Related Risks & Opportunities

Opportunities

• Investments in climate-friendly solutions

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines (Core), UN Global Compact

Third-party Assurance: PwC

Sustainable Products & Innovation

• ClimateTrends mutual fund
• Sustainability bond fund
• Sustainability equity fund
• MobilePay app

Environmental Metrics

ESG Focus Areas

• Sustainable finance
• Entrepreneurship
• Financial confidence
• Governance & integrity
• Employee well-being & diversity
• Environmental footprint

Environmental Achievements

• Reduced CO2 emissions by 48% from 2019 to 7,871 tonnes in 2020 (primarily due to the pandemic)
• Achieved 86% CO2 emissions reduction since 2010
• Renewable energy share of 53% across scope 1 and 2
• Installed LED lights, reducing CO2 emissions from heating (e.g., 369 tonnes reduction in Helsinki)
• 68% lower CO2 emissions from air travel compared to 2019
• Introduced eco-friendly payment cards made from 86% recycled plastic

Social Achievements

• Helped 9 out of 10 customers who requested assistance during the COVID-19 crisis
• Supported 1,154,913 people with financial literacy tools and expertise
• Supported 5,065 start-ups and scale-ups with growth and impact tools
• 1,080 employees volunteered through the Time to Give program, contributing 6,588 hours and DKK 1,358,798 in value
• Launched a new online universe, PengeSkyen, providing financial literacy resources for parents

Governance Achievements

• Completed internal investigation into the non-resident portfolio at the Estonian branch
• Paid DKK 310 million in compensation to customers in the Flexinvest Fri case
• Established a new remediation office to oversee legacy issues
• Updated the Whistleblowing Policy and implemented a handling instruction
• Updated the Anti-Bribery and Corruption Policy
• 95% of employees completed risk and compliance training

Climate Goals & Targets

Environmental Challenges

• Coronavirus pandemic impacting customers, employees, and operations
• Legacy compliance issues requiring remediation
• Decreased employee engagement due to pandemic and restructuring
• Need to further reduce environmental footprint despite pandemic-related decrease in emissions
• Addressing gender imbalance in senior leadership positions

Mitigation Strategies

• Provided extensive support to customers affected by the pandemic (DKK 100 billion in credit)
• Established a remediation office to address legacy issues
• Implemented initiatives to improve employee engagement (new survey, Grow Universe tool)
• Continued efforts to reduce CO2 emissions (digital meetings, energy-efficient buildings, etc.)
• Implemented targeted recruitment and D&I initiatives to increase women in leadership

Supply Chain Management

Supplier Audits: Two suppliers audited in 2020

Responsible Procurement

• Supplier Code of Conduct based on international principles
• Responsible sourcing process integrated into supplier due diligence
• New Third Party Risk Management (TPRM) framework to be implemented in 2021

Climate-Related Risks & Opportunities

Physical Risks

• Increased average temperatures
• Increased frequency of heavy precipitation events
• Flooding

Transition Risks

• Changes in regulatory environment
• Shifting market dynamics
• Stranded assets

Opportunities

• Increased demand for sustainable finance products
• New business opportunities from supporting low-carbon transition

Reporting Standards

Frameworks Used: TCFD, GRI, UN Principles for Responsible Banking, UN Principles for Responsible Investment, UN Global Compact, SASB

Certifications: LEED Gold (Pasila building, Helsinki)

Third-party Assurance: Deloitte Statsautoriseret Revisionspartnerselskab

UN Sustainable Development Goals

• SDG 4 (Quality Education)
• SDG 5 (Gender Equality)
• SDG 8 (Decent Work and Economic Growth)
• SDG 13 (Climate Action)
• SDG 16 (Peace, Justice and Strong Institutions)

Initiatives aligned with SDGs across all six focus areas; sustainable finance potentially impacts all 17 SDGs

Sustainable Products & Innovation

• Green loans
• Green bonds
• Sustainable bonds
• Sustainability-linked loans
• Global Sustainable Future investment product
• Danica Balance Sustainable Choice pension solution
• Eco-friendly payment cards

Environmental Metrics

ESG Focus Areas

• Sustainable Finance
• Environmental Footprint
• Financial Confidence
• Governance & Integrity
• Employee Well-being & Diversity
• Entrepreneurship

Environmental Achievements

• 69% carbon emission reduction since 2019 (due in part to COVID-19 restrictions)
• Renewable energy share of 46%
• Reduced energy consumption by 6% from 2020 levels
• Saved over 37 tonnes of CO2 through LED lighting
• Reduced food waste by 8.6 tonnes, equivalent to 37.1 tonnes CO2e emissions saved

Social Achievements

• Increased employee engagement score from 71 to 74
• Supported almost 1.6 million people with financial literacy tools and expertise
• 32% women in senior leadership positions
• 1,464 employees donated 10,516 hours of volunteer work

Governance Achievements

• 96% of employees trained annually in risk and compliance
• Implemented a new Financial Crime Policy
• Updated Danse Bank’s Remuneration Policy by incorporating a reference to sustainability risk

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on operations and targets
• Legacy issues requiring remediation efforts
• Need for improved ESG data coverage and quality
• Maintaining customer satisfaction during remediation work
• Addressing structural and cultural barriers preventing gender equality

Mitigation Strategies

• Updated targets to reflect COVID-19 impact
• Established a dedicated remediation office
• Investing in data analytics and improved processes
• Implementing Better Ways of Working initiative
• Implementing D&I educational programs and tools

Supply Chain Management

Supplier Audits: A handful per year

Responsible Procurement

• Supplier Code of Conduct
• ESG assessment through Integrity Next platform

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Transition Risks

• Regulatory changes
• Market shifts
• Decarbonization challenges in high-emitting sectors

Opportunities

• Growth in sustainable finance
• Development of climate-friendly products and services

Reporting Standards

Frameworks Used: TCFD, EU Taxonomy, Principles for Responsible Banking (PRB), UN Global Compact

Third-party Assurance: Deloitte Statsautoriseret Revisionspartnerselskab

UN Sustainable Development Goals

• SDG 8
• SDG 13
• SDG 4
• SDG 5
• SDG 12
• SDG 16

Initiatives contribute to these goals through sustainable finance, climate action, financial literacy, gender equality, responsible supply chains, and anti-corruption efforts.

Sustainable Products & Innovation

• Green loans
• Green bonds
• ESG funds
• GreenFleet70 concept

Awards & Recognition

• Best Digital Customer Solutions
• Digital Financial Institution of the Year

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Financial Inclusion

Environmental Achievements

• Reduced financed GHG emissions by 2.9 million tCO2e in relation to the 2020 baseline (only including scope 1 and 2 from investments).
• In 2023, DKK 69 billion in green loans granted to customers (Danske Bank and Realkredit Danmark).

Social Achievements

• Continued efforts to integrate sustainability-related KPIs into our performance management framework. Members of the ELT and senior leaders all have a sustainability-related KPI in their short-term incentive programme.

Governance Achievements

• Embedding sustainability responsibilities and extending our competencies throughout the organisation in order to further advance the integration of sustainability across our business.
• The BoD is tasked with approving and overseeing execution of our Group Sustainability Strategy and related policies and targets, in which the PRB are an integrated element.

Climate Goals & Targets

Environmental Challenges

• Choosing the right performance measurement methodology/ies
• Data availability
• Data quality

Mitigation Strategies

• We expect that data quality and availability will increase with the implementation of the Corporate Sustainability Reporting Directive (CSRD) and other international reporting frameworks for ESG.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB, TCFD, CDP

Third-party Assurance: Deloitte Statsautoriseret Revisionspartnerselskab

UN Sustainable Development Goals

• SDG 13: Climate Action
• SDG 14: Life below water
• SDG 15: Life on land

Targets support these SDGs

Sustainable Products & Innovation

• Green loans
• Sustainability-linked financing
• Sustainable bonds
• Green fleet
• Global Future (alternative investment fund)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Nature Risk
• Animal Welfare
• Land Use
• Community Relations
• Biodiversity

Climate Goals & Targets

Environmental Challenges

• Climate change impacts on agriculture (extreme weather, unpredictable yields)
• High GHG emissions from agriculture (pig and cattle breeding, manure management, animal feeding)
• Social challenges related to animal welfare, land use, and working conditions (though largely mitigated by strict Nordic regulations)

Mitigation Strategies

• Supporting customers in transitioning to a low-carbon economy through advisory services and products
• Setting expectations for carbon footprint assessment and emission reduction
• Promoting the implementation of existing technologies for decarbonization (optimized feed mix, improved manure management, land management practices, etc.)
• Investing in companies aligned with international principles and conventions (UNESCO World Heritage List, Ramsar Convention, IUCN, ILO conventions, etc.)

Supply Chain Management

Responsible Procurement

• Work with relevant standards and initiatives regarding commodities and/or raw materials
• Certification according to relevant schemes regarding commodities and/or raw materials
• Inclusion of ESG criteria in contracts with subcontractors and suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Changes in weather patterns (droughts, heavy precipitation)

Transition Risks

• Societal and economic shifts toward a low-carbon and more sustainable future

Reporting Standards

Frameworks Used: GRI Standards