Responsible banking

We place great importance on environmental and social issues and good corporate governance in our operations. Arion Bank’s role is to help people who want to achieve success in Iceland and the Arctic through smart and reliable financial solutions which enhance financial health and create sustainable value.

Arion Bank’s sustainability policy bears the title Together we make good things happen and signifies that the Bank wants to act as a role model in responsible and profitable business practices, taking into account the environment, the economy and society. At Arion Bank we aim to ensure that social responsibility and sustainability are part of the Bank’s day-to-day activities, its decision-making and processes. The Bank’s code of ethics serves as a key to responsible decision-making at Arion Bank. 

Sustainability policy

We want to act as a role model by promoting responsible and profitable business practices, which take into account the environment, the economy and the society in which we live and work. We try to see things from our customers’ viewpoint and strive to do better today than we did yesterday.

We work in an attractive workplace where knowledge creates future value for the benefit of our customers, investors and society as a whole.

The diagram below shows our main focuses in sustainability.

 

UN Sustainable Development Goals

Arion Bank has selected six UN Sustainable Development Goals which it 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.

The Bank’s operations, including action on gender equality, our policy and actions on environment and climate issues, support for innovation and the business sector as a whole, state-of-the-art digital services and active participation on the development of the economy closely align with these sustainable development goals.

Sustainability reporting

Arion Bank’s activities are governed by the provisions of the Annual Accounts Act on non-financial reporting, Article 66 d. Information in the 2023 Annual and Sustainability Report has been prepared and published in accordance with the Global Reporting Initiative standard, GRI Standards, which helps companies and institutions share information on sustainability in a transparent and comparable way.

When sharing information on sustainability in operations the ESG reporting guide for the Nasdaq Nordic exchange and the 10 Principles of the UN Global Compact are also used as a reference. The Bank also looks to the UN Sustainable Development Goals. For the fourth time we are reporting on the progress made in implementing the UN Principles for Responsible Banking to which Arion Bank became a signatory in September 2019.

At the same time as releasing the 2023 Annual and Sustainability Report, the Bank is publishing a report on financed emissions using Partnership for Carbon Accounting Financials (PCAF) methodology and targets up until 2030. The Partnership for Carbon Accounting Financials (PCAF) 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 which they finance through their loans and investments.

In 2023 Arion Bank took its first steps towards implementing the European Sustainability Reporting Standard (ESRS). The standard forms part of the requirements for the expected transposing of the Corporate Sustainability Reporting Directive (CSRD) into Icelandic law. For the first time a double materiality assessment has been published in respect of the standard. The results of the assessment were obtained through discussions with stakeholders, surveys of employees and workshops. Reference is made to the ESRS in the Bank’s environmental accounts but the implementation of the standard is far from complete.

In 2023 new legislation was introduced in Iceland which obliges the Bank to disclose information in respect of EU Taxonomy. For the first time the Bank is disclosing information in accordance with EU Taxonomy in an annex to the consolidated annual financial statements. The annex contains general information on the taxonomy directive, its implementation in Iceland and the activities covered by the taxonomy.

Deloitte has provided an opinion with limited assurance on sustainability in the 2023 Annual and Sustainability Report in accordance with GRI Standards and Nasdaq Guidelines. Deloitte also provides an opinion with limited assurance on the Bank’s progress report to UNEP FI in connection with PRB.

Deloitte’s opinion

PRB Progress Report

Pillar 3 Risk Disclosures 2023

Financed emissions and emissions reduction targets of Arion Bank

Sustainability Accounts

GRI Standards Index

ESG ratings in 2023

Arion Bank has agreements with two ratings agencies which rate the Bank’s performance in ESG issues every year. The ratings of other rating agencies are not based on feedback or communication with the Bank.
 

Arion Bank maintains outstanding ESG rating from Reitun

Arion Bank achieved the score “outstanding” in Reitun’s ESG rating in December 2023, placing it in category A3. The rating is based on the Bank’s performance in ESG issues in its operations. The Bank again scored 90 out of a possible 100 points, thus meeting the stricter requirements made this year. 90 points is the highest score given by Reitun, and the Bank is one of three issuers placed in category A3. Approximately 40 Icelandic issuers have been assessed.

In explaining its decision, Reitun concluded that Arion Bank was determined to perform well in terms of sustainability and had achieved excellent results. It also noted that the Bank was well aware of the positive impact it can have on society and the environment and therefore set a good example for the Icelandic market.

Further information on the results of the ESG rating can be found here.

 
  

Morningstar Sustainalytics rates Arion Bank in top 3% globally in terms of sustainability

At the end of 2023 Arion Bank received an updated ESG risk rating from the international ratings agency Morningstar Sustainalytics, which specializes in rating ESG risk. The rating was positive and Morningstar Sustainalytics continues to rate the Bank as one of the best performing banks globally in this area.

The Bank scored 10.5 points on a scale from 0-100, with a lower score signifying lower risk. Morningstar Sustainalytics therefore believes there is minimal risk of significant financial damage due to ESG issues at the Bank. Arion Bank is in the top 5% of more than 1,000 banks worldwide which have been rated by Morningstar Sustainalytics and in the top 3% of almost 500 regional banks. Arion Bank also ranks in the top 3% of the approximately 16,000 companies rated by Morningstar Sustainalytics.

Governance, sustainability and risk management

Arion Bank has a sustainability committee and the management of risk in connection with ESG factors was defined as part of the Bank’s risk management system. The CEO is the chairman of the committee, whose role is to monitor the Bank’s performance in connection with its policy and commitment on sustainability and to ensure that ESG factors are considered in decisions and plans made by the Bank. A green financing committee and equality committee are sub-committees of this committee.

In addition to the CEO, the sustainability committee comprises the managing director of Retail Banking, Corporate & Investment Banking, Markets, Customer Experience, Finance and a representative from Legal. The Chief Risk Officer, the Head of Corporate Communications and Sustainability, and Sustainability Officer attend meetings but do not have voting rights. Meetings are also attended by representatives of Stefnir and Vörður if required.

The Bank has adopted a risk policy on sustainability which is approved by the Board of Directors and reviewed annually. This policy states that the Bank seeks to ensure that its operations and services do not have a negative impact on people or the environment. It also states that the Bank supports Iceland’s climate action plan whose goal is to meet the obligations of the Paris Climate Agreement and to achieve the ambitious goal of carbon neutrality in Iceland by 2040. Key performance indicators relating to ESG factors are part of the monthly risk report to the Board, and the Bank’s risk appetite with respect to these factors has been defined.

At the end of 2023 the Bank commenced its annual risk assessment. The assessment was incorporated into the Bank’s risk framework and was carried out parallel to the annual risk assessment process. Inherent risk relating to human resources and social factors is generally rated as low. The main risks concern the ability and development of employees, as well as equality and diversity. The key environmental risks were considered to be greenwashing and the environmental and climate impact of lending and investment. The assessment also revealed that the main governance risks were anti-money laundering measures and violations relating to know-your-customer and data protection. The management of these risk at the Bank was generally rated as adequate or strong.

In 2023 the Central Bank of Iceland’s Regulations No. 772/2023 on the Disclosure Obligations of Financial Institutions came into effect, which constitutes the implementation of Commission Implementing Regulation (EU) 2022/2453 on technical standards as regards the disclosure of environmental, social and governance risks. The European Banking Authority (EBA) issued the aforementioned technical standards and the template which the Bank is now publishing for the first time in the 2023 Pillar 3 Risk Disclosures. The Technical Standards are partly based on the recommendations of the Task Force on Climate-related Financial Disclosures (TFCD) which the Bank has used in recent years to gain a better overview of climate-related risk and in its treatment of sustainability risk.

The Bank has introduced a policy on actions against financial crime, such as money laundering, terrorist financing, bribery and corruption or market abuse. During the year the Bank approved a special policy on measures against bribery and corruption with the aim being to establish general indicators on this topic. According to the policy, there is zero tolerance at the Bank of any form of bribery and corruption, and procedures should be in place which ensure that employees report all incidents which may be linked to bribery and corruption. The Bank is aware that risk linked to bribery and corruption is generally present in all areas of financial activities and the main risks have been identified at the Bank, which re-evaluates its measures regularly in response to the risk at any given time. This focus supports the UN Sustainable Development Goal number 16 whose aims include reducing illegal capital flows, bribery and corruption. Further information on measures against bribery and corruption is contained in the Bank’s 2023 Pillar 3 Risk Disclosures.

At the end of 2022 the Board of Directors approved an updated bonus scheme for permanent employees which is based on clear targets and subject to strict requirements from the FSA. In 2023 both financial and non-financial indicators were incorporated into the scheme. Non-financial indicators are linked to results in factors such as customer satisfaction, know-your-customer, learning and development and equality.

 

Key ESG indicators

Environmental factors

Targets for 2030:
  • Percentage of sustainable lending will be at least 20% of the Bank’s total loan book.
  • Reduction of greenhouse gas emissions from own activities (Scopes 1 and 2) by 80% calculated from 2015 and remaining emissions will be carbon offset.
  • Continuous efforts to obtain a more accurate picture of emissions from acquired goods and services (Scope 3) in the Bank’s activities.
  • Aim for reductions in financed emissions in the sectors which have the most impact (Scope 3) in line with the net zero target by 2040. The latest targets are published annually in the Bank’s report on financed emissions.
  • Targets on financed emissions should be validated by SBTi.
Sub-targets for the Bank's operations in 2024:
  • Work towards ensuring percentage of sorted waste in the Bank’s operations is at least 90%.
  • The Bank continues to only buy vehicles which run on 100% renewables.

Social factors

Targets for 2024:
  • Work in accordance with the Bank’s action plan on equality and human rights which applies for three years at a time.
  • Increase percentage of investment by women.
The current targets for 2021-2024 include:
  • Maintaining equal pay certification.
  • Equal pay analysis indicates gender pay gap of less than 1%.
  • The ratio of the median value of total wages to men and total wages to women is less than 1.3.
  • The survey on people’s perception of their work-life balance scores at least 4.2.
  • Employees will generally receive 80% of their salaries during parental leave for 6 months regardless of gender.
  • Employees know the policy and prevention and action plan concerning bullying, gender-based and sexual harassment and violence.
  • The Bank seeks to ensure that international human rights are respected and that equality is observed throughout the Bank’s value chain, including purchasing and corporate lending.

Governance factors

Targets for 2024:
  • At least 90% of new suppliers under agreement with the Bank undergo the supplier’s assessment where their performance in terms of ESG is assessed and the same percentage agree to the Bank’s code of ethics for suppliers.
  • All employees complete mandatory learning and development courses, such as on the code of ethics, information security, anti-money laundering and data protection.
  • The Bank’s internal targets on KYC/AML are achieved.
  • A harmonized risk assessment for different sectors and regions is set up with respect to ESG risk and the financial impact on the Bank.

Responsible lending and investment

Arion Bank is a signatory to the United Nations Principles for Responsible Banking (PRB). The goal of these principles is to align banking with international goals and commitments including the UN Sustainable Development Goals and the Paris Climate Agreement. In order to adapt our strategy and actions to PRB and the goals of the Paris Climate Agreement, we have amongst other things adopted an environment and climate policy and goals which are reviewed and updated annually. More information on the Bank’s environment and climate policy, financed emissions and targets can be seen here. In 2023 we continued to implement the principles into our business. We set the first climate targets and became signatories to Science Based Targets initiative and Net-Zero Banking Alliance. We then published our second report on financed emissions.

The Bank’s credit policy places an emphasis on sustainability and the credit rules stipulate that ESG factors should be assessed when a credit rating is required, or a company meets the conditions of Article 66d of the Annual Accounts Act. The Bank issued its first comprehensive green financing framework in 2021 and has since issued four green bonds on the basis of the framework. Revisions of the green financing framework also commenced during the year. Loans which have a positive impact on society will now also be incorporated into the framework. This work will be completed in 2024.

In 2023 sustainability policies were published for seafood and industry, energy and manufacturing. In addition a sustainability policy for the Arctic was published, as the Bank is placing increasing focus on the region. When devising the Bank’s sustainability policies, we seek to obtain opinions from stakeholders and refer to plans and actions concerning ESG issues in the different economic sectors.

Preparations for the long-term project Women invest were carried out during the year and it was launched at the beginning of 2024. While good progress has been made in recent years and decades in terms of equality in Iceland, the position on the financial market is not equal. Arion Bank wants to contribute to this effort and ensure equal participation of women and girls in the financial market. One of the UN Sustainable Development Goals adopted by the Bank is goal number 5 which is gender equality. The aim of the project is to get women to take a more active role in the financial market through motivation, education and social initiatives. The project has received excellent feedback and similar projects in the Nordic countries have proven most successful. More information on Women invest can be found here.

In asset management, Arion Bank has introduced rules of procedure on responsible investment which incorporate the three basic criteria of sustainability: environmental, social and governance. The Bank is a signatory to the United Nations Principles for Responsible Investment (PRI) and has published progress reports since 2019. This means that not only financial criteria, but also other significant criteria, are taken into account when analyzing investments and developing clients’ asset portfolios. Markets began to implement the new sustainability legislation during the year. See here for further information.

Responsible buying

The Bank’s strategy is to create future value for the benefit of its customers, shareholders and society as a whole, and in keeping with this the Bank seeks to source its supplies from local providers as far as possible, provided they meet the requirements on quality and price.

Nearly all of the Bank’s key suppliers operate in Iceland. Although the supply chain does extend overseas, the first link is usually here on the domestic market. In fact, there are only two international suppliers in the top 10 main suppliers and only 14 in the top 50. The majority of the Bank’s international suppliers are connected to the buying of software, advisory services and IT services. Hardware is almost entirely acquired from Icelandic suppliers.

Buying is divided between the 50 main suppliers as follows: domestic 83% and international 17%.

Buying is divided between the 50 main suppliers as follows
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The updated targets relating to the Bank’s environment and climate policy state that at least 90% of new suppliers under agreement with the Bank should have undergone the supplier’s assessment where their performance in terms of ESG is assessed and the same percentage should have agreed to the Bank’s code of ethics for suppliers. The Bank’s buying rules take this into account.

The Bank’s supplier assessment, which is completed digitally, appraises suppliers on their performance in terms of environmental and climate issues, as well as equality and labour laws. The supplier assessment is available in Icelandic and English and is carried out on suppliers over a certain size. During the year, 90% of new suppliers which come under this definition and have an agreement with the Bank underwent the assessment. We regularly assess the performance of suppliers with which we have long-term business relationships, and all the largest suppliers with which we have made outsourcing agreements underwent the assessment in 2023.

The code of ethics for suppliers, which focuses on sustainability and social responsibility, is available on the Bank’s website. The code of ethics is incorporated in the digital supplier assessment and forms part of the agreement with the Bank.

Contractors

In 2022, new procedures for contractors were introduced. They are divided into three categories depending on type of access permissions and scope of work. Contractors are people who work on a specific project, in the short term or long term, for the Bank but who are not permanent employees of the Bank. The total number of active contractors at the end of 2023 was 287. Examples of contractors are people who work in real estate services and property management, maintenance and cleaning, auditors and advisors. Most contractors at the Bank are programmers, people providing monitoring services such as security and other specialists.

Responsible product management, product range and one-to-one marketing

Arion Bank adheres to a policy on responsible product management, product range and marketing, and compliance with the policy is the responsibility of the managing directors of Retail Banking and Customer Experience. The policy states that the Bank endeavours to offer products and services which are beneficial to our customers, shareholders and society as a whole. The procedure for responsible product management in the retail market is defined at Arion Bank and takes into account the European Banking Authority’s Guidelines on product oversight and governance arrangements for retail banking products.

The Bank protects its customers’ interests when developing the Bank’s products and seeks to ensure as far as possible that they receive products and services suitable for them. The emphasis is on risk-based product management to identify and manage risk associated with products and services and the impact on consumers. Identified risks associated with the Bank’s products are checked every year and a risk assessment is performed when new products are launched and important changes are made.

It is important that employees are very familiar with the rules that apply to the products and services provided by the Bank. Employees undergo continuous and focused training and some L&D courses on the key issues and products at Bank are mandatory.

The Bank records and categorizes recommendations and complaints by product and nature of service and shares this information with the Central Bank of Iceland. Recommendations and complaints are responded to where applicable and used in the product development process and to improve customer experience.

Policy on responsible product management, product range and one-to-one marketing

Our commitment to sustainability

UNEP FI and Principles for Responsible Banking - PRB

In July 2019 Arion Bank became a signatory to UNEP FI, United Nations Environment Programme Finance Initiative, which is a partnership between United Nations Environment and financial institutions across the world working to understand today’s environmental, social and governance challenges.

In September 2019, Arion Bank became a signatory to the Principles for Responsible Banking (PRI) which were devised by UNEP FI and 30 international banks. For further information on Arion Bank’s involvement with the principles see here.

An overview of the progress made by the Bank in implementing the principles at Arion Bank can be seen here.

 

United Nations Principles for Responsible Investment – UN PRI

In 2017 the Bank became a signatory to the United Nations Principles for Responsible Investment (UN PRI). The principles are designed to help investors understand the effect of environmental, social and governance issues on investment and thereby encourage signatories to the principles to take non-financial factors into account when making investment decisions. A progress report on responsible investment is published annually by the Bank’s Asset Management division. For more information on responsible investments see the Markets section.

UN Global Compact – the UN’s initiative on sustainability

Arion Bank has been a signatory to the UN Global Compact, the UN’s initiative to encourage businesses to adopt sustainable and socially responsible practices, since the end of 2016. The compact sets out 10 principles on human rights, the labour market, the environment and anti-corruption. Every year the Bank submits a progress report to Global Compact. In 2023 the CEO of Arion Bank, Benedikt Gíslason, signed a CEO statement with the CEOs of almost 80 Nordic signatories to the Global Compact expressing their support for the UN’s Global Compact’s Ten Principles and Sustainable Development Goals, while upholding the targets of the Paris Agreement and urging further action to reach these targets. The statement was released to coincide with COP28. Further information can be found here.

PCAF – Partnership for Carbon Accounting Financials

In 2021 Arion Bank became 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 same time as the 2023 Annual and Sustainability Report, Arion Bank is publishing its second report on financed emissions using PCAF methodology in which indirect emissions are assessed and emissions targets are set out. 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.

Science Based Targets initiative

At the end of 2023 Arion Bank committed itself to getting its climate targets validated by the Science Based Targets initiative (SBTi) within two years. The targets aim to keep global warming below 1.5 C° and for Arion Bank to become net zero. Validation by SBTi confirms that the Bank’s targets are science-based and align with the commitments of the Paris Agreement. More than 7,000 companies are signatories to SBTi and more than 4,000 have already been validated. More information on the science-based climate targets can be seen here. 

Net-Zero Banking Alliance

The Bank has also joined the UN-convened Net-Zero Banking Alliance (NZBA), a global group of banks committed to financing ambitious climate action. NZBA was formed in 2021 as a platform for banks to meet the climate requirements of PRB. By joining, the Bank is committed to setting targets on reducing financed emissions up until 2030 and becoming net zero by 2050.  

Festa – Center for Sustainability

Arion Bank has been an active partner of Festa – Center for Sustainability, for several years. Arion Bank also provides additional financial contributions to Festa and is as a core company. Festa’s role is to add to the expertise on social responsibility and sustainability at companies, institutions and organizations.   

City of Reykjavík and Festa’s Declaration on Climate Change

2015 Arion Bank became one of more than 100 signatories to the City of Reykjavík and Festa’s Declaration on Climate Change. One of the main tasks concerning climate change is to map the environmental impact of operations and to systematically reduce the negative effects. We have published the Bank’s environmental accounts annually since 2016. More information on Arion Bank’s environmental accounts can be seen here and in the sustainability accounts for 2023.

IcelandSIF - Iceland Sustainable Investment Forum

Arion Bank has long been an active participant in the shaping and development of responsible investment in Iceland and was one of the founding members of IcelandSIF, the Iceland Sustainable Investment Forum, in 2017. The purpose of the forum is to increase knowledge and promote debate on the methodology for sustainable and responsible investment. Over the years the Bank has had representatives in the board and working groups for the organization.

Forum for climate issues and green solutions – Green by Iceland

Arion Bank is one the founding members of Green by Iceland, a joint business and government forum on advancing climate issues and green solutions. Green by Iceland brings together Icelandic companies and the authorities to cooperate on shared goals on a carbon neutral Iceland by 2040. It also promotes Icelandic green solutions internationally under the name Green by Iceland in partnership with Business Iceland.

VAXA Technologies

Arion Bank has entered into an agreement with VAXA Technologies and bought verified and active carbon credits from the company. The credits are integral to Arion Bank’s mitigation measures for emissions from own activities in 2022, such as from business premises, vehicles, flights, waste and employee journeys to and from work. VAXA Technologies, which is based at the Hellisheiði ON Geothermal Plant, sells carbon credits created during the production of microalgae, spirulina.

CDP

Since 2019 Arion Bank has disclosed its climate impact via CDP, a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. More than 17,800 companies published their environmental data via CDP in 2023. See here for more information on CDP.

Excellence in corporate governance

In August Arion Bank, Vörður and Stefnir were recognised for their excellent corporate governance and were therefore named as Model companies in corporate governance. The awards are presented by Stjórnvísi, the Icelandic Chamber of Commerce, SA Confederation of Icelandic Enterprise, Nasdaq Iceland. Arion Bank was first recognized for excellence in corporate governance in 2016 and it is given following a comprehensive audit by an independent party of corporate governance at the Bank, such as governance by the Board of Directors, sub-committees and management. It applies for three years. For more information on corporate governance at Arion Bank see here and the sustainability accounts for 2023.

Ministry of Welfare’s equal pay symbol

In the autumn of 2018 Arion Bank was awarded the Ministry of Welfare’s equal pay symbol after having been certified by the standards agency BSI, the first Icelandic bank to gain this recognition. The Bank first gained equal pay certification in 2015 and has since undergone a pay assessment annually. For more information on equality at Arion Bank see the section on Human Resources and the sustainability accounts for 2023.

 

UN Women and UN Global Compact

The Bank has supported the UN Women/UN Global Compact Empowerment Principles since 2014. These are international declarations and treaties under the auspices of the United Nations which companies and institutions can use as guidelines when implementing responsible working practices, irrespective of geographic location or sector and which primarily concern advancing gender equality. For further information see the sections on equality at Arion Bank and the sustainability accounts for 2023.

FKA Equality Scale

In 2020 CEO Benedikt Gíslason signed a declaration of intent on the Equality Scale, stating that Arion Bank intends make a focused effort to balance out the gender ratio at senior management level. The Equality Scale is an initiative created by the Association of Icelandic Businesswomen (FKA) and progress can be followed on an interactive dashboard.

Supporting the community

Arion Bank organizes a wide range of informative lectures, conferences and events and is an active member of the community. The Bank received a large number of visitors over the year and we also participated in numerous conferences and exhibitions.  

Events held in 2023 included
  • University students visited the headquarters and learned about investments. We took the opportunity to launch Arion’s investment competition. The objective of the competition was to promote education on investment and fund management and to enable students to get to grips with real tasks from the business sector.
     
  • In partnership with the Association of Icelandic Businesswomen, the Bank held an event which brought together more than 300 women from the business sector.
     
  • The Bank’s economists presented economic forecasts for customers.
     
  • The Arion Invitational chess tournament was held in October, with Hjörvar Steinn Grétarsson emerging as the winner.
     
  • We organized a Women’s Evening to commemorate Pink October which brought together many of the Bank’s customers. Works of art and other products were sold, and the profits went to the Icelandic Cancer Society.
     
  • As in previous years customers were invited to various educational events, such as lectures on private pensions. Many customers attended, both in person and online.
     
  • Various other events and visits were arranged, involving a wide range of organizations, including Junior Achievement Iceland, the Dean’s List at Reykjavík University and the Icelandic Forestry Association. We also hosted several groups from university students, companies and NGOs.

Sponsorship policy

Arion Bank collaborates with numerous organizations and companies and supports a wide range of good causes in the community. The Bank has adopted a sponsorship policy where the emphasis is on sponsoring projects connected to the Bank’s core activities or which support the UN Sustainable Development Goals, with a particular focus on the goals highlighted by the Bank.

ESG factors are also taken into account when selecting recipients of sponsorship and partners. The sponsorship process is well defined and transparent.

Donations to political activities

Arion Bank has adopted a policy concerning donations to political activities. The policy states that the Bank provides grants to political organizations which put up candidates nationally in general elections and submit an application for financial support from the Bank. To be eligible for a grant the organization must have a member of parliament.

No donations to political activities were made in 2023.

Policy on donations to political activites

 
Sponsorship in 2023
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Sponsorship and partnerships in 2023

  • Arion Bank was one of the main sponsors of the Arctic Circle conference held at Harpa Concert Hall in October. The aim of the conference was to support the dialogue and collaboration on the future and development of the Arctic, a region whose importance will increase in the coming decades, not least because of climate change.
     
  • Arion Bank was also a sponsor of Reykjavik Global Forum - Women Leaders, held in collaboration with the Icelandic parliament and government, and WPL, Women Political Leaders. The event plays a vital role in raising awareness and supporting gender equality globally, and it was attended by 500 women leaders from 80 countries. Reykjavik Global Forum - Women Leaders was held at Harpa Concert Hall in November.
     
  • In the spring semester Arion Bank sponsored the Dean’s List at Reykjavík University, which is reserved for students who achieve the best results in each semester. The aim of the list is to inspire students who gain outstanding academic results and to highlight their achievements. Students on the RU Dean’s List have their tuition fees for the next semester waived.
     
  • Arion Bank is one of the main sponsors of the Icelandic Handball Association and has been providing backing for the sport in Iceland for many years. The Bank is also one of the main sponsors of the Icelandic Sports Association for the Disabled and is helping athletes prepare for competitions during the year.
     
  • The Bank supports the Icelandic Forestry Association, helping to fund an initiative to further advance public knowledge of forests, provide information and improve access to forests for recreational purposes. The Bank also provides funding to plant trees.
     
  • The Bank also supports a range of charitable causes such as the Icelandic Cancer Society and many more which help vulnerable people in society. In addition, the branches supported a wide range of worthy causes in their local areas.

Innovation and support for entrepreneurs

Innovation is integral to our business and improves the Bank’s ability to compete in the long term. Continuous and focused scrutiny of whether the current methodology applied to goods, services and processes is optimal for success is one of the keys to our operations.

In recent years the Bank has collaborated on a wide range of exciting investment projects with our customers with the aim of strengthening the business sector in this country. This is particularly true of the intellectual property industry, a flourishing sector in Iceland and a vital source of future value creation. We are committed to supporting innovators and we nurture innovation and growth through partnerships with selected partners.

Arion Bank’s commitment to innovation and active participation in the development of a creative economy supports two of the UN’s sustainable development goals: goal number 8, decent work and economic growth, and goal number 9, industry, innovation and infrastructure.

Arion Bank has invested directly and indirectly in numerous start-ups and participated in events related to innovation.

  

Strategic partners

Enhanced service to people on the rental market through Leiguskjól

Leiguskjól is an excellent example of a partner selected by the Bank to support the services offered by the Bank. Leiguskjól participated in Startup Reykjavík in 2018, and the Bank invested in the company, acquiring a 6% interest. In 2019 the Bank entered into a partnership agreement with the company and increased its investment to 51%. The investment and partnership agreement with Leiguskjól clearly demonstrates the Bank’s commitment to stepping up its collaboration with fintech companies, where the aim is to utilize the Bank’s core strengths and to combine it with the focus and dynamism inherent in innovation.

Eyrir Sprotar – investing in startups

Arion Bank, in cooperation with Eyrir Invest, runs the venture capital fund Eyrir Sprotar slhf. Eyrir Invest and Arion Bank are the fund’s largest shareholders. The fund is worth ISK 6 billion and has invested in 11 companies.

Advancing innovation on the financial market with the Fintech Cluster

Arion Bank has become a member of the Fintech Cluster to cement its relationships with fintech companies. The Fintech Cluster is designed to advance innovation in the financial sector. The Fintech Cluster also runs an innovation centre and organizes a range of events, including with Arion Bank.

Supporting young entrepreneurs

Arion Bank is one of the main sponsors of Junior Achievement Iceland. The role of this organization is to prepare young people for the future and to improve their skills for the job market and by promoting education in innovation, entrepreneurship and business at secondary school level. In 2021 it organized a competition for secondary school students which gave students the chance to experience innovation firsthand in the classroom. A total of 162 companies were set up by more than 700 students in the competition and 30 companies went through to the final. The company Nomína, owned by six students from the Commercial College of Iceland, was named company of the year and represented Iceland at the JA Europe Company of the Year Competition held in Istanbul.

Leitar Capital Partners – investing in entrepreneurs

Arion Bank invests in Leitar Capital Partners ehf. Leitar Capital Partners is a new company which focuses on investing in young and dynamic people and helps them find companies to acquire and manage. The company is a registered alternative investment fund manager and has completed the ISK 1.5 billion funding of the company’s first investment fund. The investment fund will invest in search funds, a search fund being an investment vehicle through which an entrepreneur, the searcher, raises funds from investors. The searcher gets funds to search for a suitable company to buy, takes over as managing director, gets a share in the company and then manages it as it transforms and grows until it is sold again. The aim of the project is to combine the energy of young and ambitious entrepreneurs with the experience and expertise of dynamic investors buy acquiring promising companies full of growth potential.

Frágangur – exciting startups

Arion Bank invests in and owns a 33% stake in Bílafrágangur ehf. It is an innovation company which was founded in 2020 and its aim is to use digital solutions to enhance security and consumer protection when buying cars. The solutions offered by Frágangur enable people buying a vehicle to have secure, simple and quick transactions. The solution covers all the paperwork involved in the transaction, including purchase agreements, change of ownership documents and financing.

 

The closing ceremony of Junior Achievement Iceland (JA) which was held at the Bank’s headquarters in April. The company Nomína, owned by six students from the Commercial College of Iceland was named company of the year for 2023.