Sustainability and social responsibility

ESG report 2023 for Ringkjøbing Landbobank

Ringkjøbing Landbobank is a customer-focused relationship bank which endeavours to comply with our values of acting competently, responsively and properly towards our four principal stakeholders:

  • Customers
  • Employees
  • Society
  • Shareholders

Goals
Ringkjøbing Landbobank supports the intentions of the Paris Agreement and has in 2023 set specific targets for reducing carbon emissions from our loans and investments.

The bank’s goal is to be carbon neutral by the end of 2050 and, with 2020 as the base year, to reduce carbon emissions by 45% per DKK million lent and by 50% per DKK million invested by the end of 2030.

It has been essential for Ringkjøbing Landbobank to formulate the targets so that the bank can continue to grow. The bank pursues an organic growth strategy and wants to win additional market share. The bank also wants to help finance businesses which enable more sustainable ways of producing and consuming and/or to help finance investments that can bring a business forward in the green transition of the business’ industry. These businesses do not necessarily have low carbon emissions, but they need financing for their transition to reduce their direct and indirect carbon emissions.

2023
2023 was an ever-changing year with many challenges. The war between Russia and Ukraine continued with undiminished violence and the conflict in the Middle East flared up after the horrific terrorist attack in Israel on 7 October 2023. The rate of inflation has remained high but was coming down toward the end of the year. Both the European Central Bank and the US Federal Reserve therefore raised interest rates further during the year and Danmarks Nationalbank, the central bank of Denmark, followed suit.

However Ringkjøbing Landbobank is a solid bank and also supports its customers during more challenging times:

  • Ringkjøbing Landbobank’s Long Term Issuer Rating at Moody's remains Aa3 with stable outlook. This reflects that the bank is judged to have an earning capacity and credit profile which indicate that the bank will continue to meet current macroeconomic challenges. The bank’s Long Term Bank Deposit Rating is also Aa3 with stable outlook. No other Danish bank has a better rating at Moody’s
  • In June 2023 Ringkjøbing Landbobank was awarded the accolade ‘Bank of the Year’ among big and medium-sized banks for the eighth consecutive year. The prize is awarded by FinansWatch and EY
  • In the area of ESG, MSCI upgraded the bank’s rating from A to AA, the second-highest on MSCI’s 7-point rating scale
  • For the fourth consecutive year, Ringkjøbing Landbobank had the best image of banks in Denmark in the Voxmeter survey in September 2023. The Nordjyske Bank brand was fifth

In this report, Ringkjøbing Landbobank publishes carbon emissions from its loan and investment portfolios. Both statements were made at 31 December 2023.

Ringkjøbing Landbobank was quick to see the business opportunities in helping to finance the transition to renewable energy production. The first wind turbines we financed were installed in 1995, and wind power financing has been an important business area ever since. We have also subsequently cultivated financing of solar energy and biogas plants as niches. The distinctive feature of a niche in Ringkjøbing Landbobank is that we have studied the area in detail enabling us to be responsive and to support our customers with proper and competent advice.

The bank continues to see a big future need for financing the green transition of society to renewable energy types, but farms and other production entities will also need financing of their transition to more sustainable ways of producing – and Ringkjøbing Landbobank is looking forward to doing its share to achieve this.

Sustainability is also increasingly becoming a part of our advice to personal customers, where we place emphasis on improvement of energy efficiency. Although energy prices fell in 2023, we are aware in our home ownership advice and other contact with our customers that the continuing high energy prices have improved the profitability of a number of renovation projects, which might therefore be worth considering. We are also happy to provide loans for personal customers’ energy efficiency improvements of homes and purchases of sustainable vehicles.

In the area of investments, Ringkjøbing Landbobank works primarily with BankInvest, of which we own 22.4% and which has a total of DKK 149 billion under management. BankInvest has joined the Net Zero Asset Managers initiative, under which asset managers commit to working towards neutralising greenhouse gas emissions from the invested companies by 2050. 62% percent of BankInvest’s total assets under management are covered by the agreement. This is an increase from 43% in 2022, the primary reason being that mortgage credit bonds are now covered.

In the area of pensions, the bank works with Letpension, which mediates pension and insurance solutions for PFA Pension through Ringkjøbing Landbobank and others. This collaboration with Letpension enables the bank’s pension customers to choose to place all or parts of their pension savings in investments with extra emphasis on the climate.

Once again, the bank is pleased with a very satisfactory employee survey. The employees are asked to rate their attitude to a range of statements on a scale from 1 to 10, where 1 is “I fully disagree” and 10 is “I fully agree”. For example, we ask our employees every year to consider the statement “I thrive at the bank”. Here, the average answer increased from 8.7 in 2022 to 8.8 in 2023, the best result ever measured.

Ringkjøbing Landbobank is an advisory bank and we want our advisers to provide competent advice on home ownership, pension, investment and – when relevant – business. This places high demands on our employees’ education and training, which is therefore a high priority to us. The bank offers education and training in our own academy and in collaboration with Aarhus and Aalborg Universities, Finanssektorens Uddannelsescenter (the Financial Sector’s Training Centre) and local business academies. In 2023, we placed extra emphasis on training our business customer advisers in ESG-related dialogues.

The bank has a need for filling a range of academic specialist jobs and this will continue in the coming years. In 2023, the bank therefore launched a graduate programme aimed at new bachelor and master-level graduates. At the end of 2023, we employed three academics participating in the graduate programme. We are also training 29 apprentices and trainees, which is a record number.

Ringkjøbing Landbobank’s goal is to be scope 1 and 2 carbon-neutral. We achieve this in practice through our ownership of the forest Sæbygård Skov, in which the growth in 2023 captured more carbon dioxide than the bank emitted. The bank also focuses on continually reducing carbon emissions per FTE.

The bank’s indirect carbon emissions (scope 3) – in addition to emissions from loans and investments – are also at a low level and primarily result from the outsourcing of IT development and operation to Bankdata. Bankdata has in turn outsourced the energydemanding IT operations to JN Data and has entered into an agreement with JN Data on buying green electricity from solar cells with effect from the beginning of 2023. As part of the agreement, the supplier has established a new solar energy park. The agreement has significantly reduced the bank’s indirect carbon emissions.

Ringkjøbing Landbobank spends substantial resources on combating money-laundering and financing of terrorism, on data security and on preventing cyber crime. We are also one of Denmark’s top 50 taxpayers (2021 income year) and contribute free of charge to society by handling a range of other imposed tasks, e.g. in tax reporting and digitalisation.

From 2023, financial sector companies have paid more tax on their earnings than other companies do on theirs. An extra tax has thus been imposed on us. This extra tax amounted to DKK 86 million in 2023. Ordinary corporate tax was DKK 590 million and the payroll tax DKK 65 million, meaning that the bank’s total tax payments for 2023 were DKK 741 million.

Ringkjøbing Landbobank’s business model must be robust and sustainable for all stakeholders. This is a precondition for generating a competitive and satisfactory return on our shareholders’ investments.

Reporting

As a result of the Corporate Sustainability Reporting Directive (CSRD), new rules regarding ESG reporting enter into force from 2024. Ringkjøbing Landbobank is in the process of preparing for this.

The bank continues to support the 15 ESG key figures defined by Nasdaq Copenhagen, the CFA Society Denmark and FSR – Danish Auditors to make data comparable across industries and sectors. 

CEO John Fisker

"The bank runs its business based on the values: Competent, Active, Proper"

Ringkjøbing Landbobanks business model

SUSTAINABILITY AND SOCIAL RESPONSIBILITY

ESG Fact Book

A supplement to the bank's annual ESG report

The bank’s annual Environmental, Social and Governance (ESG) report focuses on selected subjects in more
detail and presents ESG key figures. This Fact Book should therefore be seen as a supplement to the ESG
report.

It presents data in a more compact and clear form and beyond the scope of the ESG report.

ESG Fact Book

SUSTAINABILITY AND SOCIAL RESPONSIBILITY

ESG rating

Ringkjøbing Landbobank's ESG rating has been upgraded to grade AA from grade A by the ESG rating agency MSCI.

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Among other things, the bank is rated by MSCI, which is one of the world's largest and most widely used ESG rating agencies.

In July 2023, MSCI upgraded the bank's ESG rating from grade A to grade AA, which is the second highest rating grade on MSCI's 7-point rating scale.

The rating includes an assessment of environmental, social and governance conditions.

DISCLAIMER STATEMENT
THE USE BY RINGKJØBING LANDBOBANK OF ANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”) DATA, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT, RECOMMENDATION, OR PROMOTION OF RINGKJØBING LANDBOBANK BY MSCI. MSCI SERVICES AND DATA ARETHEPROPERTY OF MSCI OR ITS INFORMATION PROVIDERS, AND ARE PROVIDED ‘AS-IS’ AND WITHOUT WARRANTY. MSCI NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI.

SUSTAINABILITY AND SOCIAL RESPONSIBILITY

Nasdaq ESG Transparency Partner

Ringkjøbing Landbobank is recognized as a certified “Nasdaq ESG Transparency Partner” for our contribution to the Nasdaq’s ESG Data Portal.

The certification signals engagement in market transparency and in raising environmental standards.

The recognition is provided to companies that display transparent and objective data to its investors when it comes to Environmental, Social, and Governance issues.

ESG Transparency Partner

SUSTAINABILITY AND SOCIAL RESPONSIBILITY

UN Global Compact

In 2021, Ringkjøbing Landbobank endorsed the Ten Principles of the UN Global Compact regarding responsible business operation in the areas of human rights, labour, environment and anti-corruption.

UN Global Compact

UN Global Compact

SUSTAINABILITY AND SOCIAL RESPONSIBILITY

More information

Here is the full overview if you want to read about sustainability and social responsibility for the bank and our partners.

On the banks website

 

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