Good morning and welcome everybody. We are so happy to see that you have joined this session on net zero in financial institutions. My name is Sebastian and I'm a management consultant here at Implement Consulting Group. And today we're going to talk about climate emissions, climate targets and climate actions. And we will do that with a specific focus on Danske Bank and their newly launched climate action plan. And for that reason, I'm very happy that we have invited Kristin into the studio. Kristin, could I ask you to put a few words on who you are and how you ended in the cross field of sustainability and financial services? Absolutely. Thank you for welcoming me, Sebastian. Great to be here this morning and great to virtually meet all the audience out there. I'm Kristin and head of group sustainability at Danske Bank. I have been working in the cross field indeed with financial services and sustainability for more than 15 years by now, both on the investment side and also with financing and export credits and through consulting. So yeah, by now quite a substantial background in that area before I joined Danske Bank last year. Thank you and really happy to have you here. We're going to hear a lot more about that in a second. But before we get to that, as you mentioned, you've been working quite a lot in this area. So I would maybe like to start out by asking you, what do you see is the biggest challenge for financial institutions when working with climate change today? Well, it's actually been a really, really interesting journey. I mean, just five, six years ago, climate was sort of on the on the sidetrack of ESG and sustainability focus areas where we're quite different and it's suddenly really, really overtook in a way many of the other issues. And I think the EU sustainable finance plan and green deal was really behind that. COP26, of course, also accelerated the issue and really put the financial sector at the center of driving the green agenda or the transition agenda. And I think that's one of the big challenges is really taking that task and directing that capital's towards transition. It also means that as a financial institutions, you do not have the full control over your assets in the same way that you have over your own operations, obviously. So it requires that you are involved with your clients and with your assets in a very engaged way. And that's an emerging trend. Of course, it's super interesting, but it's of course also filled with difficulties. Really interesting. And we're going to dive into that topic. In a second. But just for all of you to know, we have around 40, 45 minutes here. And in a second, we're going to talk about the climate action plan. And after that, we're going to move towards some sort of Q&A. I have prepared some questions. But if you out there have any questions that you would like Kristin to answer, then please just type them in the chat and then we'll take them in the end. But without much further ado, let's get started. Thank you for that very nice introduction and welcome to this little couch. Kristin, we are very curious about the climate action plan in Danske Bank. A lot of us are following the ESG journey in financial service sector. And one of the milestones was the launch of the climate action plan in January. What is a climate action plan and what does it contain? Well, the climate action plan actually emerged as a consequence of our commitment to net zero that was made a couple of years ago, actually not much more than a year ago. And with that commitment, we decided that we needed to draw the target of achieving net zero 2050 a bit closer and have a strategic outset for how we are going to get there. So based on that ambition, we calculated our baseline of our carbon footprint, both for our own operations, but obviously also for our business areas. So our asset management and our financing, where we have the largest emissions. And based on that baseline of our carbon footprint, we were able to set midterm targets for 2030 of how much we would be able to reduce our emissions. So that is the strategic outset that we've set. Now we've defined those targets, we've defined some of the actions, and we're in the midst of operationalizing that and implementing it throughout the entire organization. Could you share a little bit about the background on how did you land on the climate action plan? And the target setting you have done? Absolutely. So it was an ambition from the start to work with, of course, the best methodologies that are out there. Also with the interest of being transparent and comparable to other financial institutions. So we decided that we would work by the framework of the science-based targets and use their methodologies in defining and calculating our our midterm targets. And that's what we've done. And we've submitted our targets for validation with the science-based targets right before Christmas and are still awaiting the validation. I think what is really important is to mention that as of now, the science-based targets are considered sort of the gold standard framework out there for financial institutions. And the more financial institutions that use that framework and methodology, the better that will, at the end of the day, make sure that we're using the same calculations, the same methodologies, and can provide our stakeholders with data and information that is transparent, consistent, and comparable. If we double-click a bit on the target setting you have done. In a bank, you have the whole emission from the lending book and, of course, asset management. Could you share some of the challenges you have had within the target setting on specific sectors or areas? Well, they're very, very, very, very different areas and also somewhat different methodologies depending on whether you're calculating for your investment area or for your financial or financing assets. So in that way, we decided to, again, and help by the methodology, we decided to look at our different business areas individually at the first outset. And very specifically set sector targets for our financial, for our financing area. And very soon discovered that we have significant emissions, maybe not so surprisingly, in specific sectors that are hard to abate sectors, basically within the fossil fuel area, cement, steel, and real estate. So our focus was on these sectors. That's where we have to reduce emissions. If we don't succeed with that, we'll not succeed in a way. But they don't necessarily constitute the major part volume bias of our portfolio. That is basically a reflection of the entire Nordic economies. So within some of these sectors, we only have very few companies. And that is sort of a, I would say, one challenge that we are now looking further into. So how do we also address the major chunk of our portfolios that is not necessarily emitting high emissions, but also needs to transition. So that's the next step. As for our asset management or our investment area, we were using temperature targets. So quite a different methodology. And aligned the portfolio's footprint with temperature curve of 1.5. And again, so slightly different approaches to the different financial areas. And that also means that it's not super meaningful to put everything into the same pot and combine it and just crunch one number in absolute emissions, but rather to look at them individually. Could you share some of the scale here? Could you share some of the scale here? So you have the scope one, the scope two, and the scope three. Could you just share with the audience how large is the scope three component in a bank like Danske Bank? Well, it very, very quickly emerged that our own operations are, it's a very insignificant part of the total footprint. I believe we were down to 1.00. So negligible really. And the major part of our emissions constitute from our activities, financial activities, that's a 99 plus 9 or 0.9%. And it emerged up to, or summed up to a number of 41 million tons of CO2, which corresponds pretty much to the emissions of total emissions of Denmark annually. Yeah. It sounds like a lot. And it was also misunderstood by the press, for instance, as that being our own footprint. But in a more technical setting, I think it's fair to stress that those are our scope three emissions. If you look to the way it's defined in the greenhouse gas protocol. Meaning again, that footprint is a reflection really of the emissions in the Nordic economies that we are, with the corporates and companies that we are involved in and are financing. And that's also, I think, it was also important internally for us to discover that where we can have the biggest effect and have the biggest responsibility, opportunity and really also opportunity is in the conversation with our customers, with our financial assets and have that dialogue and help them through the transformation or through transitioning. So it sounds a bit like the finance emissions exercise is showing some hotspots for you and then you can decide to work with certain sectors or customers. Can you tell a little bit about maybe one of the sectors and how you're then doing that from understanding the finance emissions to actually then also achieving some sort of decarbonisation in a sector? Well, it's really very much, again, looking to the hard to abate sectors, for instance, going forward, there will be, it will be a question for them to look into acquiring new technologies, adapting to new technologies and also looking more rigidly at their own emissions. What will it take to reduce? That's a huge transformation that will also require financing. So that is really important that we are in a position to both engage with relevant green financial products. But we've also from the outset said that we are a financial institution for the entire economy. So we are not only going to revert to green bonds and sustainable linked bonds, but rather also in our mainstream products will be integrating these elements and reintegrating questions and requirements to transitioning and then help direct the capital or the financial flows toward transitioning activities. Any input or thoughts on the data quality also when estimating financed emissions and working with different sectors? Has it been equally easy to work with all sectors or what? Do you have any thoughts on that? I think in general, I think in general, it's fair to say that we are all just starting out on this journey. And there are so many institutions, corporates, companies that are doing an amazing job in collecting data and providing data. However, it's still a very difficult data exercise and not all data are mature. So we also have to revert to using proxies. And in a way, sometimes the proxies may turn out to be more accurate, actually, than the actual data. So that's a bit of a challenge. That's a bit of a challenge and a bit of a surprise, really. But it's important to say that we are on the outset of doing this and by getting everyone on board and again, also back to methodologies and frameworks using the same frameworks, being part of also perhaps developing the right methodologies and bringing in our experience and information to the further development of standards is super important because then in that way we can hopefully acquire better and more mature data. But I think everyone is on that journey and most institutions will improve data wise. The biggest challenge right now is definitely in getting scope three data. I think that's a bit of a struggle for almost everyone. So reliable scope three data is quite a challenge, but I'm quite confident that that's going to improve over the coming years. So that's also with the requirements of now upcoming CSRD regulation for reporting. There's a much bigger push for providing data and that will make it a priority also in corporates and companies going forward. I'm quite sure. And again, that's also where we as a financial institution have a responsibility of actually pushing in getting the data and hopefully helping organizations to become more transparent. You mentioned in the outset that you are applying for the SBTI certification. Could you share some thoughts on why did you choose to go with SBTI and what have been the challenges being on the forefront on some of these sector based methodologies? Well, absolutely. So the SBTI is constituted by four international organizations that have been working with climate data and climate calculation methodologies for decades and are really at the core of that development. The Carbon Disclosure Project and the UN World Resources Institute for some. And so from our point of view, those are the core competences in this field and they've come together and built this methodology. Their methodology for the financial sector is still very young. I believe it's one and a half years since they released the first draft and still being worked on to some extent. So of course, that is to some extent a challenge. However, we felt that it was substantially developed to be able to work with it. And again, I think it's the best that we see in the market, so to speak. The best that is out there and with the right organizations behind it, the right capacities. So that was important for us. And we thought that it was, yeah, that those organizations were good partner organizations. We've also had a dialogue with the SBTI and in how to set the targets and whenever we were in doubt. So also very forward coming. However, of course, also filled with challenges and lots of recalculations. I think I can reveal that, that it's not just plug and play. And, but yeah, it's a learning. It's a learning path. That's also a part of being on the forefront of the development here that, that things are not set in stone and, and, and elements are moving as we work with it. Yeah. There are only a few financial institutions to my knowledge that have actually been validated so far. Some have complex portfolios, some are minor financial institutions. Obviously, the less complex your portfolio is, the easier it will be to go through this exercise and the more complexity you have and, and the more of these hard to debate sectors that you are involved with, the more you'll be, be challenged. But also the gain will be some, will be much bigger because you will create that transparency, both for your, for your stakeholders, but also internally in your organization. So you will be in a position to, to, with, with much more confidence, make decisions in, in these sectors. Cool. Thank you for sharing your thoughts on the SBTI and the, climate action plan. What's the future of, what's the future of Net Zero One reporting in the bank? What will be the next big thing? Well, we have committed to, to being very transparent and, and will annually disclose, uh, the progress that we are, that we're making. Also the challenges that we, I'm sure that we're gonna, that we're gonna encounter and, and face. Um, so, so in terms of, of reporting, I mean, the CSRD is actually a big push, SFRD, also a big push for, for, for disclosures. Um, I believe we've, we've, we've following most of the, these, um, standards already. Um, also already disclosing in terms of the, um, TCFD and, um, and have been working with climate data for, for more than a decade actually in the bank, of course, starting out, uh, in, with, with own operations and then including more and more of our, of our assets. Um, so, so, so I believe in the future we will see not just Danske Bank but also other financial institutions and organizations in general be much more transparent, uh, about their data and also digitizing and automatizing much, much more to, to a bigger degree than they are doing today. And again, at the, the general reporting push will drive that. But, um, I think it goes without saying that for a financial institutions you want to be very, very sure about your data that's sort of at the core of our existence in a way. So that's gonna, that, that will of course also influence the ambition of, of having accurate data and disclosures in, uh, in this area. You, you are now disclosing a lot of the sustainability information. What kind of a conversation have that started within the bank? Because it, it, it's not a free lunch here. Well, when you set targets and you embark on a journey, that will influence your lending book and your, your asset management. What kind of, uh, dialogue has this fueled? Well, lots of dialogue, uh, and, and very interesting ones. Obviously there are, there are some hard choices to, to make going forward. However, our outset has been, again, to rather be, um, be the carrot than, than the stick with most sectors. Also because we see a lot of opportunities in actually transitioning hard to abate sectors. And so, so, so our outset has been to be there for the entire economy and, uh, and provide the financing if possible for, for transitioning activities. That's at the very core of our discussion. Um, and I think then again, the data or my observation is that the more data, the more analysis that we can provide, the more open-minded or more, uh, clearly we'll be able to, to make decisions in what kind of, uh, the more economic activities are, uh, economic activities are actually future proof and will be good assets, uh, reliable, reliable assets in a way, um, in the future. Uh, so this actually just means that we have a new prism or a new lens through which we can analyze and our, our future engagements, uh, and in a way that will, that will make us, uh, make us smarter in, in, in, in making those and more confident decisions. Thank you. Thank you for sharing. One final question before we move to the, uh, to the, to the, to the live questions that is after climate, what will be the next focus areas in, in, in, in Danske? So for my opinion, uh, climate will still, will definitely leave the way, lead the way it's, it's at the very core also because it's been, it's quantifiable. So, and, and data driven, and we have some very clear targets that the international societies have agreed upon. And, and also we have a, I would say a burning platform to really succeed, not just Danske Bank, but hopefully everyone. Um, but it's important to say that we cannot just transition and go green at the expense of, of other areas that is nature, uh, natural environment and ecosystems, resources, and, uh, and, um, social areas. So our focus is, is definitely on including biodiversity and nature related questions, pollution, uh, and, and social impact areas, but they're very much interlinked with the climate change agenda, uh, from my perspective. So, so that is our approach that these elements are connected. So one should not be at the expense of the other. You have to consider these, um, these different issues when you make decisions. and, and, and therefore we are focused on, on nature and, and human rights, social impacts at the same time. Okay. Good. Thank you. You're welcome. Thank you so much, Kristin, for, uh, enlightening us on, uh, the thoughts behind the climate action plan. Uh, we are now moving into the Q and A part of, uh, this session here. We have prepared some questions, but, uh, if you out there in the audience also have questions, then please type them in the chat and then we'll try to, uh, get through them. But maybe to begin, if there are anyone out there in the audience, uh, thinking about, uh, developing their own climate action plan, can you give a few words or advice on how much you can develop climate action plan? So, how would you go about that? Maybe also a little bit on the timeframe of it, how long would it take? Um, and you can maybe speak from the perspective of Danske Bank, of course, on that. Yeah, absolutely. Um, so, so as I said previously, I, I would definitely, uh, hopefully, uh, more financial institutions will, will, uh, go through this exercise and also commit to the science-based targets, um, initiative. Um, and if, if, if you're going to, you know, decide on that, I would say it's the, the whole baseline, uh, calculating and working on the baseline, that is, that is essential and that is the starting point, obviously. It's a substantial task, of course, depending on how much data you already have and what the data quality and what your processes are in your respective organization. Um, that was something that was developed one or two years prior to, um, to our development of the organization. of the actual climate, uh, action plan. So, so that exercise had already been underway. Uh, we set our baseline for 2020 and, and, and did first a manual calculation, then automized it and, and looked it over again and, uh, just to be, to, to be sure that is, that is a big undertaking and it involves. And many areas in your organization, uh, for our part that has involved our business units, obviously. Um, so it's important also to have the right organizational setup. It's not just a, a group activity, it's a, or a corporate activity. It, it has to be, um, in, in conclusion with, uh, and, and coordination with your, your business areas, uh, and, and other organizational areas. Obviously, data units are super important for, for, for, for this part. So that's the, that's the outset and then that journey continues once you start setting, setting targets. But I, I believe that's the, that's the, that's the outset. And then that journey continues once you start setting, setting targets. But I, I believe that everyone who's set a, or committed to a net zero target and, uh, and Paris alignment will, will need to both have policies in place and, and strategies and, and also midterm targets and even short-term targets. Okay. Thank you. What did surprise you? You're relatively new to, to Danske Bank. What did surprise you in, in the sustainability journey you have taken with Danske so far? Ooh, that is a good question. Every day a new surprise. Um, I have been working with, uh, with climate data also previously or prior to joining the, the bank. So I was not so surprised over the complexity and the task, to be honest. Um, I was positively surprised on the support and, um, and also on how much this agenda was, uh, uh, central, uh, to, to, to, to the bank and to the, to, to the activities. So there was a lot of, there is, was a lot of attention on, on this and, um, and, um, and held also, uh, a lot of support. And it's not just a walk in the park. I mean, these are complex issues and complex tasks. So there are a lot of revolving activities and recalculations and it's, uh, it's, uh, it's resource requiring, of course, for an organization to do this. And, and we are, uh, uh, uh, uh, a large corporate and, and have to some extent the resources to do that. But that it is a constraint on an organization. So you have to prioritize it. And, uh, and luckily that prioritization is prioritization is, was there. Um, and I believe that the, the, the biggest surprise in, in broad terms is that this was actually really central. It was something that the organization could also be really proud of having done. Um, and it's been, uh, received, uh, very, very well in both in the organization and also with our stakeholders. So, um, it's, it's a good outset and it's probably. Maybe just because I've worked in this field for such a long time was a surprise to me how much it actually mattered that we have one strategic outset now and direction for, for climate. And maybe a bit along the lines of that, we have a question here, um, stating, what are your experience with persuading skeptics, within your organization that this is the needed strategy? Could you put a few words on that? Yeah. And I'll, I'll, I'll, I'll go back to my 15 plus years in sustainability and finance. So I think it's, uh, there have been skeptics all along the way. It's sustainability in general, or even when it started out being CSR, ESG, sustainability, it's a change agenda. You're looking at your business through a new lens to some extent. So it, it's, um, you know, of course there are people who will be skeptical because you might be asking them to do things in a, in a different way. And again, look through a different perspective at the activities that they've been doing always. Um, so I think it's important to realize that you're, you're approaching your business with a change agenda and what that requires, uh, organization wise, uh, human resource wise and, and growth wise in, in a way. But, um, but it's equally important to, important also to, to be very analytical in your approach and be able to demonstrate and, and point to, to, well, factual consequences, risks. Um, I think a lot of institutions start out with this agenda from a risk perspective and maybe less from an opportunity perspective. And that is going to be the next big step, being smarter and more analytical around the, the opportunity driven elements of, of this agenda. But in my experience, if you, if you take a very analytical and factual approach, you, you'll be able also to have that conversation with skeptics. And I think it's, uh, it's, for me, it's a S a very great learning curve, actually to have a dialogue with, with those who are skeptical, because otherwise I would just be in my little sustainability eco chamber, which would not be very relevant in a way. So, uh, those are actually the conversations that I enjoy the most. Uh, it makes me smarter. And, and, and, and, and, then I know where are the pain points and what do we have to address. And talking about pain points, we have one more question here. Thanks, Kristin, for sharing the story of Danske Bank. Which business areas of the bank are most challenging for carbon baselining? Well, that depends if it's meant in terms of getting the data or in terms of transitioning. Data-wise, I would say we are, through our financing activities, much closer to the actual corporates. And therefore, we have a more direct dialogue in acquiring data. So I would definitely point to the investment area where data is coming from different data providers and there's more proxy involved. So that is definitely a challenge. But then again, in investments, we are also facing global activities that obviously also have more challenges than through financing. We are more oriented toward the Nordic economies that are also from a regulatory perspective set on one track, more or less. So I would say investments is probably the more challenging area. Yes. Yeah. Thank you. Another question here. How will the CSRD, Corporate Social Responsibility Directive, impact your climate action plan? Do you have any thoughts on that? Well, I think a lot of the asks from the CSRD and the requirements, the regulation, pointing to climate. So both on the both the generic elements of CSRD and the thematic areas that point to environment and specifically climate with the climate action plan and everything that is following. It's not just done with having made a plan, obviously. It's the work that now emerges from that plan that is really important in terms of also being able to report some or have something to report on. But I believe with the actions that we've taken and what we're looking into, we will be able to deliver and report in full alignment with CSRD. So it's also been a good investment internally for the organization to be well prepared in terms of what is to come and be in compliance with that disclosure regulation. And I think we have been able to do that as a big institution with resources. But I also foresee that CSRD will be quite a big challenge for many institutions and companies. And so I can only say, well, get started with the work because it's quite substantial. Do you have any other trigger events or milestones on the radar that will impact the climate action plan that you're looking towards? Well, we've committed to report on our progress annually through our communication channels and reports. So that's going to be our first milestone. So that's going to be our first milestone. And we're already working hard and trying to see how we can best disclose. I believe that the milestones that have been set for 2025 within Danica, for example, are also going to be quite significant. So they have drawn targets a little bit closer due to their pledge and commitment to the net zero asset owners alliance, which has set a different outset and different requirements. So that's also going to be a big next step for us. And then also for us internally, once we start getting the full overview of how we're progressing throughout the year, looking more at annual targets and drawing them even closer, I'm sure that will spur a lot of new insight and also conversation. Maybe some targets will be and realize, materialize earlier. Maybe some will have complexities that we haven't foreseen. I mean, that is sort of the risk when you start with this work. Yes. Maybe moving on a bit, I think it could be interesting to hear, where does an organization like Danske Bank find inspiration? So what are you looking to to get inspired when talking sustainability and climate action? Well, it's a, I would say with any kind of trend analysis or with mega trends there, it's not one particular place. I think what is super inspiring is, of course, to look to some of the, and that is part of the job or part of the core, of course, looking to some of the big international organizations. But it's also very inspiring to see toward what civil society organizations, NGOs are putting forward, youth organizations, for example. I believe that if you want to stay informed, you have to look to many different stakeholders and not just one stakeholder area. And then it's sort of the sum or you can subtract and add a little bit to to all these different voices. But if you want to stay focused on one place, you'll lose traction of what's actually going on. So, yeah. So inspiration in many, many places from the EIA to civil society organizations to my own kids, actually. Thank you very much for that. Maybe a question on biodiversity, because I know that's also, on your radar, could you put a few words on how you see that topic will impact Danske Bank and how you're working with that today? Or will work with it? Yeah. We, I mean, we have committed to PRB, the principles of responsible banking, biodiversity is also an element there and other pledges, PBAF, for example. And there, it's also a requirement that we start working with setting targets, a completely different complexity, and it's a completely different complexity than climate targets. So that's also a steep learning curve. But as I mentioned initially, I believe again, that the green agenda, climate agenda is deeply interlinked with natural resources and biodiversity. So I see that there are a lot of positive correlations and gains by addressing the two, and again, also including the social area. Specifically focus on biodiversity. It's obviously also very strong emerging agenda, NFRD. And also the EU taxonomy has actually really highlighted the triangularity of climate, nature and social impacts. So for me, that makes a lot of sense to work with it in this way. But we have started looking into setting targets for biodiversity as well. It's very early days, so I won't really be able to disclose anything further on that. But just saying that it's definitely a focus area. And I believe we'll be able to go more into depth with it once we've done our materiality assessments, which are underway right now, as a starting point to really see in what areas do we have most impact and and sort of again, what are the core areas, what are the high impact areas, what is most material. Really looking forward to follow that. And I think that's also a topic that we hear more and more about. Should we have a final question maybe here? If you could dream, where would you see Danske Bank be by 2030 on this agenda with climate? What would be the perception? Well, that is also a very interesting one. I think that if I could dream. If I could dream. I am determined that we are not just looking at climate from a regulatory perspective, but also really will be able to have demonstrated significant impact in transitioning and being a core financial partner in some of the relevant transitioning cases. So that's that's for one. I hope that it's yeah, that it will both be I think in order to really demonstrate the value that it will both be something that is super impactful on the climate side, but also has an impactful commercial angle to it, because I think that is necessary to drive the agenda. And I'm confident that that's going to be the case, actually. Great. Thank you so much for that. Thank you. Thank you very much, Christian. And thank you very much for tuning in. Let this occasion be the starting point for the dialogue instead of the end. Thank you very much. Thank you very much for the good questions. Thank you. Thank you. Thank you.