We are reducing our carbon footprint
KBN has a target of cutting its own greenhouse gas emissions by at least 55% by 2030.
Despite being somewhat indirect, the most important contribution made by KBN to Norway achieving its climate goals is our discounted green loans for projects/investments undertaken by the local government sector. These reduce energy consumption, cut greenhouse gas emissions, or contribute to local climate change adaptation. KBN is of the view that this is an important and impactful part of how we fulfil our societal duty to the sector that we serve. In 2020 KBN also adopted a long-term climate target to reduce our own emissions by at least 50% compared with the 2019 level before 2030. As part of KBN’s target setting for 2022, the 2030 target was increased to at least 55%.
KBN’s emissions between 2017 and 2023 and an emissions trajectory (dotted line) that would enable KBN to achieve its target of reducing our emissions by at least 55% by 2030 compared with the 2019 level.
This climate target means that we will need to do things differently in the future. Prior to the coronavirus pandemic, flights were responsible for about two-thirds of KBN’s total calculated CO2 emissions. With nearly all of Norway’s municipalities as customers, KBN employees attend meetings across the country. In addition, we meet with investors in numerous different locations across the world in order to ensure we are able to offer the local government sector the best possible borrowing terms on loans from KBN.
There will continue to be some need for KBN employees to travel by plane in the future, but a number of these journeys can be replaced by other solutions. Although digital meetings cannot fully replace physical meetings, it has been natural for digital meetings to continue to account for a significant proportion of our meetings even after the pandemic came to an end, not least because experience suggested that the time saved by using digital meetings is a significant benefit.
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KBN’s emission from 2017 to 2022 by scope. In tonnes CO2 equivalent.
- Scope 1 covers direct emissions from controlled sources. For KBN’s part this consists of emissions when employees use their own petrol or diesel cars for business travel. The emissions factor for scope 1 is sourced from Eco-lighthouse.
- Scope 2 is indirect emissions from electricity purchased and used. For KBN this includes district heating, district cooling and electricity in our premises. The emissions factor for scope 2 is sourced from Eco-lighthouse.
- Scope 3 is all other indirect emissions. For KBN this covers residual waste and flight travel.
The emissions factor for residual waste is sourced from Eco-lighthouse. The emissions factor for flight travel is sourced from ICAO from 2019 onwards.
KBN’s greenhouse gas accounts are produced annually as part of the annual climate and environment report that we produce for the Eco-Lighthouse Foundation. KBN has been Eco-Lighthouse certified since 2009 and was re-certified in 2021 in accordance with the bank and finance criteria. KBN uses a location-based calculation for scope 2, but has included a market-based calculation in the table for the reader's information. KBN is of the view that our greenhouse gas accounts include the most material emissions within Scope 2 (indirect emissions related to the purchase of energy or cooling), including district heating, district cooling and electricity consumed in our premises. The Eco-Lighthouse Foundation has published its own emissions factors for location and market-based reporting methods, and we will report our Scope 2 emissions based on both methods starting with reporting for 2023, as emissions factors are not available for previous years. Based on the Greenhouse Gas Protocol, we have with effect starting from 2023 reclassified our emissions associated with reimbursing employees for business travel by car from Scope 1 to Scope 3 'Business travel', meaning that the bank’s calculated Scope 3 emissions for the time being includes Category 6 ‘Business Travel’ with emissions from flights and the driving of petrol, diesel and electric cars, and Category 5 ‘Waste’. The emissions factors for waste and business travel in diesel, petrol and electric cars are provided by the Eco-Lighthouse Foundation. Since 2019 KBN has used the ICAO emissions factors for emissions from flights.
Complete Scope 3 emissions cover all emissions from assets/activities that are affected by KBN’s activities but are emitted from sources that are not owned or controlled by KBN. This also includes KBN’s suppliers, as well as emissions financed by KBN’s lending and liquidity portfolio. Accordingly KBN’s greenhouse gas accounts are not currently fully comprehensive in respect of Scope 3, but do include material emissions that KBN is able to affect directly. In 2023 KBN started work on identifying material indirect emissions, with the objective of including as much as possible of the outstanding Scope 3 emissions in the greenhouse gas accounts. At the moment it is difficult to collect data of sufficient quality for KBN’s largest source of emissions in Scope 3, which comprises emissions financed through the lending portfolio. This is the case partly because the local government sector is not required to report emissions from the assets that have been financed, and partly because KBN’s loan portfolio only includes a limited proportion of project financing. Reference is made here to the statements in the white paper on state ownership policy that the state expects to see the use of science-based climate targets where these are available. It is not specified whether such targets can be judged to be available for lending in a situation where the assets financed cannot be clearly identified, and there is work in progress to investigate solutions to this question. Companies that are subject to the new reporting directive and sustainability requirements of CSRD will be required to report their entire climate gas emissions in respect of all three Scopes (as far as possible), as well as direct and indirect climate risk. In 2024 KBN will work further on gathering data and developing methods in order for it to be able to report all material Scope 3 emissions.
KBN seeks to contribute to transparency regarding greenhouse gas emissions and has for a number of years reported to CDP, the leading international organisation for environmental and climate disclosures. CDP’s assessment of the entities that report to it includes guidelines, greenhouse gas and energy accounting, and the measures and improvements that it has implemented. In 2023 KBN also became the first Norwegian financial institution to complete the CDP ‘Water Security’ questionnaire.
KBN’s external auditor, Deloitte, produces an annual certification statement for KBN’s greenhouse gas accounts.