Unveiling efficient organizational models for CSR and sustainability: SpareBank 1 SR-Bank
Guro Elgheim Sivertsen, Sustainability Director at SpareBank 1 SR-Bank, provides insights into their comprehensive approach to sustainability, ESG integration and climate related matters in the following interview.
Guro Elgheim Sivertsen, Sustainability Director at SpareBank 1 SR-Bank, provides insights into their comprehensive approach to sustainability, ESG integration and climate related matters in the following interview.
How would you best describe your bank’s organizational structure for addressing sustainability, ESG and climate related matters? How many people are dedicated to sustainability matters in your organization?
There is a central group sustainability team of five persons, and there is a commercial advisory team on sustainability consisting of five persons. There are also a couple of dedicated ESG-roles across the organizations.
The central sustainability team reports to the Group executive vice president of People, Sustainability and Communication, who reports to the CEO and sits in the top management team.
There is also a Group strategic sustainability committee which consists of representatives from all staff units and business units. This group is led by the sustainability director.
It might be easier to understand the organizational structure by looking at this model:
Are there any lessons learned that you could share from the journey of formalizing and establishing your sustainability organizational structure?
Only that it is a work in progress and there are shifting and new needs that need to be addressed, and thus the governance structure must be updated as we go along. But the exercise of mapping out the governance structure was very useful with regards to assigning and making visible the responsibilities of each unit.
How do you measure sustainability performance in your organization? What kind of indicators do you have? Who is measuring these indicators?
We use a strategic benchmark consisting of four different external ratings: ESG100, MSCI ESG, CDP and Fair Finance Guide – Norway.
For the business units we measure sustainable financing and progress towards our target of financing NOK 50bn in sustainable activities by 2050. This is tracked on a quarterly basis based on our framework for sustainable finance, which in turn is based on the EU taxonomy for sustainable activities.
We also have internal targets for gender equality, both when it comes to pay and leadership positions and opportunities.
How do you align sustainability performance with your strategy and targets?
Sustainability is an integrated part of our overall company strategy and we aim to have measurable sustainability targets for every staff- and business unit. We report on our sustainable financing both internally and externally on a quarterly basis along with the financial reporting. We have an ESG screening of our corporate clients which is performed by applying an ESG due diligence questionnaire which we have developed alongside the other SpareBank 1-banks.
We also have portfolio climate risk assessments as an integrated part of our internal risk evaluation models, specifically as part of the annual ICAAP process.
Through these measures we are steadily evolving our ESG data collection, but I will be honest and say that lack of data is a real obstacle to our progress in this area. We have a portfolio of mainly SME clients which have very limited reporting requirements when it comes to ESG, so we have to work out other ways to find the data we need. This is a challenge for the entire Norwegian banking sector, not for SpareBank 1 SR-Bank specifically.
We do also have green lending products such as green mortgages, EV-loans and loans aimed at energy efficiency measures for retail clients, as well as including sustainable funds in our savings products offering.
Finally, I would like to mention the ESG advisory team in our subsidiary SR-Bank Forretningspartner who work as consultants helping clients with their sustainability work.
Do you use any specific market solutions for ESG needs? If so, can you give a few examples of using those solutions?
We use the PCAF model for estimating financed emissions, we use Eiendomsverdi to evaluate physical climate risk in our real estate portfolio, and we use Cemasys to keep track of our climate accounts. We also have a couple of inhouse solutions relating to customer ESG due diligence and sustainable finance reporting.
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