Landsbankinn achieves excellent rating in Reitun’s EGS risk rating
Landsbankinn achieved an excellent rating in an EGS risk rating carried out by Reitun. The assessment is based on the Bank’s approach to environmental, social and governance issues in its operation. The Bank received 86 out of 100 points.
In its review, Reitun notes that Landsbankinn has in recent years achieved good results in environmental matters, employee welfare, customer satisfaction, service and governance practices. Landsbankinn has also been an active driver of ESG agendas in Iceland. Landsbankinn is focused on and active in the field of cyber security, one of the largest risk factors in banking.
Landsbankinn continues the integration of ESG in its investment and lending activities and has set itself an ambitious responsible investment strategy. The Bank is committed to abide by the UN’s Principles on Responsible Investment (PRI) and Principles for Responsible Banking (PRB). The Bank is currently working towards its goals for a green credit framework and participates in the development of the PCAF carbon accounting method, which aims to enable banks to measure the carbon footprint of their credit and asset portfolios.
Ólafur Ásgeirsson, Managing Director of Reitun: “Landsbankinn achieves an excellent score in our risk assessment, emerging as a role model in the domestic market. The Bank’s scores are well above average in all categories, compared to other domestic issuers. Reitun has assessed 30 listed companies. It is enjoyable to see Landsbankinn score highly. The Bank has been an active supporter of the ESG agenda in Iceland and is applying the principles in its domestic asset portfolio. We consider the Bank well prepared to take an important step towards implementing ESG in its investment and lending decisions. Should the process be successful, the Bank is likely to maintain its A category rating in coming years.”
Lilja Björk Einarsdóttir, CEO of Landsbankinn: “It is exciting to have an Icelandic company perform ESG risk ratings. Reitun’s work has been ambitious. For Landsbankinn, the rating means that investors, owners and customers gain a better understanding of our operation and our attention to these factors in our activities. Companies face growing demand to show their commitment and progress in this field and it is very enjoyable for Landsbankinn to achieve such positive results.”
Reitun’s ESG risk rating
Reitun’s ESG risk rating evaluates a company’s performance in environmental, social and governance factors and assigns a rating grade. Reitun is the first domestic company to offer an ESG rating service to investors; an ESG risk rating is useful in the investment decision process. Several parties were involved in shaping the methodology Reitun basis its risk assessment on. The underlying methodology must be clear and based on domestic conditions but equally importantly also on guidelines followed by international ESG rating agencies.
Internationally, the growth in ESG risk assessments has been rapid. A good ESG risk rating is a mark of strength that factors in lending and investment decisions and can positively influence suppliers, shareholders and other stakeholders.
Domestic investors are adapting quickly to these new standards and many have set ESG and sustainability goals and strategies. As a result, companies must increasingly take these factors into consideration, take advantage of the opportunities they bring and embrace the positive impact on the natural environment and society.
Reitun’s ESG risk rating