GRI Standards Index

GRI 3-1, GRI 3-2 og GRI 3-3

Material topics – Process for selection and management

GRI 3 2021 has yet to be fully implemented but Arion Bank’s reporting takes into account GRI 1 2021, GRI 2 2021 and GRI 3 2021 for the first time. Previously, reporting had been based on GRI Core but it is now in accordance with GRI Standards.

The work and reporting conducted in past years was used as a basis for selecting material topics in the 2022 Annual and Sustainability Report. This work included a survey carried out by the Bank at the beginning of 2021 of stakeholders concerning sustainability and social responsibility. The survey was conducted in collaboration with CIRCULAR Solutions, which also processed the results. The survey was sent to all employees and management as well as a sample of customers, suppliers, partners and shareholders. CIRCULAR also performed a materiality assessment for the Bank on the Bank’s impact in terms of lending and investment. No fundamental changes have occurred to the Bank’s activities since commencing this work.

It also looks at a materiality assessment carried out in 2021, and analyses of the Bank carried out by domestic and international bodies in connection with the Bank’s ESG performance. As in previous years reporting utilized most of the contents of the Nasdaq ESG Reporting Guide.

Direct and indirect impact of operations

Although the direct environmental impact of banking on the environment is not great compared with other sectors, we nevertheless believe it important to disclose information on this factor. Arion Bank wants to set an example in environmental and climate issues. It has set itself the goal of reducing emissions from its own activities by 55% by 2030 and it has been a signatory to City of Reykjavík and Festa’s Declaration on Climate Change since 2015 and has pledged to publish the results. When selecting material topics in connection with GRI Standards we choose those factors relating to emissions of greenhouse gases from the Bank’s activities which we consider appropriate for publication.

We are aware that the Bank’s impact on environmental and climate issues is mainly indirect and greatest when it comes to the services we provide to our customers, not least via lending and investment. We are committed to helping our customers and society reduce greenhouse gas emissions, guided by the targets of the Paris Climate Agreement and the UN Sustainable Development Goals. At the beginning of 2022 we published our first Impact and Allocation Report which covers the allocation of funds which were raised through green bond issues and green deposits in 2021. Deloitte has audited with limited assurance the use of funds which have been raised through green bond issues and green deposits.

Arion Bank is a signatory to the Partnership for Carbon Accounting Financials (PCAF). This is a global partnership of financial institutions that work together to develop and implement a harmonized approach to assess and disclose the greenhouse gas emissions associated with their loans and investments. At the end of 2022 the Bank published its first report on financed emissions which is based on PCAF methodology. Assessing and disclosing the greenhouse gas emissions which are financed through lending and investments is a prerequisite for the Bank’s ability to set targets on reducing emissions, and this is the next step.

Responsible buying and interaction with suppliers with respect to their performance on environmental and climate issues is important to us, and in 2020 we introduced a new ESG supplier assessment. A code of conduct for suppliers was introduced in 2021.

Human resources, equal opportunities, human rights, learning and development, the health and safety of employees are all critical to the Bank’s operations and this is reflected in the Bank’s policies such as the human resources policy, learning and development policy, equality and human rights policy and health and safety policy.

The Bank’s management has approved six UN Sustainable Development Goals which the Bank intends to focus on. These goals are number 5 on gender equality; number 7 on affordable and clean energy; number 8 on decent work and economic growth; number 9 on industry, innovation and infrastructure; number 12 on responsible consumption and production; and number 13 on climate action. These six Sustainable Development Goals are also used as a guide when selecting material topics and their boundaries.

All material topics and their boundaries concern Arion Bank. The Bank’s subsidiaries are not included in this report unless otherwise stated.

The following material topics were considered appropriate in 2022:

• GRI 201 Economic performance 2016
• GRI 203 Indirect economic impacts 2016
• GRI 204 Procurement practices 2016
• GRI 205 Anti-corruption 2016
• GRI 206 Anti-competitive behaviour 2016
• GRI 302 Energy 2016
• GRI 303 Water and effluents 2018
• GRI 304 Biodiversity 2016
• GRI 305 Emissions 2016
• GRI 306 Waste 2020
• GRI 308 Supplier environmental assessment 2016
• GRI 401 Employment 2016
• GRI 402 Labor/management relations 2016
• GRI 403 Occupational health and safety 2018
• GRI 404 Training and education 2016
• GRI 405 Diversity and equal opportunity 2016
• GRI 406 Non-discrimination 2016
• GRI 413 Local communities 2016
• GRI 414 Supplier social assessment 2016
• GRI 415 Public policy 2016
• GRI 417 Marketing and labeling 2016
• GRI 418 Customer privacy 2016

Managing material topics

The management of individual material topics in Arion Bank’s 2022 Annual and Sustainability Report according to GRI Standards undergoes the same process as other projects at Arion Bank, via the Board of Directors, Executive Committee, the appropriate divisions and control units.

In 2021 a sustainability committee was formed and the management of sustainability risk in connection with ESG factors was defined as part of the Bank’s risk management system. See here for further information.

Various strategies, policies and rules which address the topic of the report have been approved by the Board of Directors and Executive Committee of the Bank, including:

Strategy and vision
Sustainability Policy
Environment and Climate Policy
Human Resources Policy
Equal Opportunities Policy
Health and Safety Policy
Code of Conduct
Code of Conduct for Suppliers
Rules on the Handling of Complaints
Data Protection Statement
Rules on Measures against Money Laundering and Terrorist Financing
Conflicts of Interest
Product management policy
Arion Bank's policy on donations to political activities
Sponsorship policy

Arion Bank is also a signatory to various domestic and international treaties and commitments on responsible banking and is working to meet these obligations. See here for more information.

Please refer to the GRI Index for more information on our measures concerning individual material topics. The Bank will work on further compliance with GRI 3 in 2023.