The Carbon Exposure Index is a goal to reduce the fossil credit exposure within our energy portfolio by 45-60 percent by 2030. The Sustainability Activity Index tracks the development within sustainability-related lending, sustainable finance advisory, sustainable investment products and venture capital investments within Greentech, with an ambition to increase average activity 6-8 times by 2030. The Transition Ratio reflects how our customers transition in line with the Paris Agreement.
"As a bank, we have the power, opportunity and responsibility to impact the world we operate in," says Johan Torgeby, SEB's President and CEO. "SEB wants to be a leading catalyst in the sustainability transition. We have an ambition to accelerate the pace towards a sustainable future for people, businesses and society, and we believe we can make the greatest positive impact for the climate by partnering with our customers and supporting them on their transition journeys. As the next step in our sustainability strategy, we have set growth ambitions for our sustainable products, advisory services and investments while at the same time laying out a clear and concrete path for the reduction of our fossil credit exposure."
The updated sustainability strategy is part of SEB's business plan for 2022-2024 and a cornerstone of SEB's 2030 strategy. With an initial focus on climate-related issues, the sustainability strategy broadens the scope of SEB's sustainability work, clarifies SEB's role in the transition, and further integrates sustainability in products, processes and decisions. It also includes new ambitions and goals, on which we will provide regular updates.
Carbon Exposure Index - "The Brown": The Carbon Exposure Index is a volume-based metric capturing our fossil fuel credit exposure. SEB's goal is to reduce the fossil credit exposure within the bank's energy portfolio, which includes power generation and distribution as well as oil and gas, by 45-60 per cent by 2030 compared with a 2019 baseline. The Carbon Exposure Index means that we will be in line with or outperforming the strictest 1,5 degree-aligned climate scenario assumptions provided by The Network of Central Banks and Supervisors for Greening the Financial System (NGFS).
Sustainability Activity Index - "The Green": The Sustainability Activity Index is a volume-based metric capturing our sustainability activity, measuring volumes for sustainability-related lending, sustainable finance advisory, venture capital investments within Greentech and Article 9 financial investment products' share of assets under management. The ambition is to increase average activity 6-8 times by 2030 compared with a 2021 baseline.
Transition Ratio - "The Future": We will transition together with our customers as reflected in a Transition Ratio, which is a volume-based ratio based on our internal Customer Sustainability Classification Model. This means that we are assessing our own and our customers' climate impact and alignment towards the goals set out in the Paris Agreement, by classifying our credit portfolio. By using this tool, we get a better understanding of our customers' transition journeys and can support them in reducing their carbon footprints. We aim to have completed the classification of our credit portfolio during 2022.
SEB, which developed its first specific sustainability strategy in 2009, has in recent years continued to strengthen the guidelines within the climate area. In 2019, SEB signed the UN initiative Principles for Responsible Banking, which means that we have committed to continuously adapt our business strategy to align and contribute to the UN Sustainable Development Goals and the Paris Agreement. We have also committed to a number of other important international undertakings that support the sustainability transition, such as the Net Zero Banking Alliance, the Net Zero Asset Managers Initiative and the Poseidon Principles.
In February 2021, SEB adopted an updated sector policy (https://sebgroup.com/press/press-releases/2021/seb-strengthens-its-sector-policy-on-fossil-fuels#:~:text=SEB%20continues%20to%20strengthen%20its,more%20areas%20and%20clearer%20standpoints) on fossil fuels that sharpened the bank's guidelines to include more areas and clearer standpoints, including a roadmap for how SEB will phase out its exposure to coal and to unconventional oil. The same month, SEB's fund company SEB Investment Management strengthened its sustainability policy (https://sebgroup.com/press/news/2021/seb-strengthens-sustainability-policy-for-all-funds), which included implementing uniform exclusion criteria for all funds managed by SEB and that all funds exclude fossil fuels.
"We now raise our ambition level further and take the next step in doing what we can to accelerate the transition," says Hans Beyer, SEB's Chief Sustainability Officer. "As a bank, we have an important role to play in supporting our corporate customers in their contribution to a more sustainable society, as well as providing savings and investment opportunities to channel the vast investments required to make the transition happen."
To learn more about SEB's sustainability strategy and the new goals and ambitions, please tune in to the digital event Accelerating change - partnering for a sustainable transition. It will be broadcast today, 17 November, at 14:00-17:00 CET at sebgroup.com/accelerating (http://www.sebgroup.com/accelerating), where a replay will also be available afterwards. After the event, at 17:15 CET, Johan Torgeby, Hans Beyer and members of SEB's management team will be available for a Q&A session. To participate, call +44 (0)2071 928 000 and use conference ID 5678797. For media who wish to request an interview, please contact