Lending is the core business of a bank. For the bank to be well-functioning and sustainable, it is critical that the lending is made responsible. A key objective for Swedbank is to provide credit and lending facilities, as well as advisory services or access to capital markets, to enable the transition to a low-carbon economy and to help clients manage transition risk. To enable this, we continuously integrate environmental, social and governance (ESG) criteria into our lending process.
Integrating ESG criteria in our business processes
For Swedbank, lending to individuals and businesses is a long-term responsibility. In corporate lending, Swedbank’s credit policy requires the borrower to be sound and sustainable and the loan to be based on familiarity with the company, its business, future prospects and an assessment of its social impact. It is important that Swedbank’s customers are financially sustainable and prepared for unforeseen events with the right amortisation and debt levels.
Swedbank encourages sustainable business models and plans to continue to develop financing products and services that contribute to the transition to a more sustainable society. Swedbank is offering low-interest consumer and business loans for installation of solar panels, which is positive for the sustainability of their finances and for society’s energy transformation. Green mortgages and car loans are also available as well. Swedbank sees this as the right way to address the opportunities and risks of sustainable finance. Swedbank also evaluates its loan portfolio according to the TCFD recommendations based on related climate risks and opportunities.
We engage with our clients on ESG-related risks and opportunities
It is important for Swedbank to engage with our clients on ESG-related risks and opportunities. We have developed extensive internal guidelines for thirteen sectors that we consider to be high-risk from a sustainability standpoint. The guidelines are a tool to provide better insight into the sustainability problems facing various industries, as well as suggestions and advice on which aspects should be addressed by the customer. In addition, Swedbank has created a checklist for real estate-related sustainability risks. The checklist serves as a tool to dialogue with customers on property-related risks. Because real estate accounts for nearly half of Swedbank’s lending, this is a strategic sector to maximise the impact of the bank’s sustainability risk management.
To support a sustainable economy, Swedbank has developed wide and diversified offers of sustainable financing products and services as follows.