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Keep on reading for a brief introduction to our projects

Estonia has aimed to reach climate neutrality by 2050. To achieve this goal, cooperation between the state, the public sector and the private sector as well as precise plan are necessary. LHV has initiated undertakings to facilitate the transition with its activities.

The UN Principles for Responsible Banking

We will align LHV’s financing and investment activity with the Paris Climate Agreement with the goal to limit the global temperature increase.

The UN Principles for Responsible Banking give banks a framework for sustainable operation and sets out guidelines for promoting life in society. We joined with the initiative to show our commitment to the UN Sustainable Development Goals and align our activities with the goals of the Paris Climate Agreement. We take part in international cooperation in the financial sector and sharing best practices.

What have we already accomplished?

At the beginning of 2020, we became a member of the UN Environment Programme Funding Initiative (UNEP FI) and signed the Principles for Responsible Banking. We are complying with the UNEP FI programme: we have mapped the impact of our portfolio by business line and prepared a sustainability action plan. We helped develop UNEP FI impact analysis tools. We have also outlined and endorsed our own sustainability ambition in the LHV Group ESG policy. We have developed LHV’s sustainability principles.

In August 2021, we disclosed our first Principles for Responsible Banking report.
In September 2022, we disclosed our second Principles for Responsible Banking report.
In November 2023, we disclosed our third Principles for Responsible Banking report.

What are we planning for future?

The next important step is to develop an impact analysis to refine the positive and negative impacts of our investment and financing activities. We build operational processes to set clear targets, based on impact analysis, to move towards on the basis of the action plan developed. We regularly share the results of our activities with the public.

What is the ultimate goal of the project?

The final goal is to contribute to achieving the goals of the Paris Climate Agreement and to make a substantial contribution to accomplishing the UN Sustainable Development Goals. Also, to make a substantial contribution to supporting the UNSustainable Development Goals. We want to operate as role models for environmentally sound, responsible business activity at the strategic and operational level (in terms of products and services). We aim to be good stewards of the environment for Estonia’s future generations.

Green office

We aim to make our working environment more ergonomic and constantly monitor and reduce the environmental impact of our offices.

LHV has decided to operate and grow sustainably, and for the long haul. When dealing with pressing international issues, we want to keep our own home in order as well. That means we devote attention to LHV’s operating environment and our employees’ CO2 footprint.

To do this, we have developed LHV’s green office principles (including instructions, action plans, and objectives). Based on the principles, we work in a manner that is best for environmental conservation. We take into account the need for sustainability when making decisions about our offices, look for ways to improve the environmental impact of our offices and adopt reasonable new solutions to fulfil our sustainability goals.

In 2020, the Estonian Association for Environmental Management issued the LHV Tallinn office with the European Green Office certificate and named our Tallinn office the best Green Office of the year. In 2021, our Tallinn office was also awarded the international BREEAM green label.

In March 2023, European Green Office certificates were also issued to LHV’s Tartu and Pärnu offices. Both the Green Office and BREAAM certificates are valid for three years, after which it is necessary to undergo a new inspection to renew the certificates.

LHV has carried out an energy audit of large Estonian companies. The aim of the energy audit is to find out how we use energy, what the possible measures are to save energy, and how we can use energy more sustainably in our workplace. As a result, the Tallinn office building has updated its technical and spatial climate systems.

Work to improve the working environment continues. We try to implement as many environmentally friendly solutions as possible in all offices in order to achieve even better results when renewing certificates.

What is the ultimate goal of the project?

The goal of the energy audit, green office principles, and green labels is to constantly reduce the environmental impact of the physical spaces used by our organisation. This leads to cost and natural resource savings, reduced waste generation, and a more ergonomic working environment. In addition, the awareness of LHV’s employees is growing.

Measurement of CO2 footprint

We measure and reduce our company’s CO2 footprint. Our office operations are climate-neutral from 2022, and we will offset the footprint of our operations annually.

Greenhouse gas emissions must be reduced significantly to avoid the worst consequences of climate change. Our office operations also generate emissions, mainly from the use of heating and from the commuting of our employees.

What have we already accomplished?

We collect data and calculate the total carbon emissions of LHV every year. Year by year, we have expanded the activities included in our calculation. In 2022, the climate impact of LHV’s office operations amounted to 1,968 tonnes of CO2 equivalent, or 2.5 tonnes per employee. In 2022, emissions were distributed as follows:

  • 29% from the use of electricity and heating;
  • 22% from employees commuting;
  • 18% from indirect energy and fuel-related impacts;
  • 16% from impacts related to fixed assets (e.g., office equipment, furniture, etc.).

We have put together a climate neutrality achievement plan in order to operate more sustainably and reduce our negative environmental impact. We have already made the transition to electricity furnished with a green energy certificate, which has cut emissions by 30%.

We calculated our footprint based on the internationally recognized GHG Protocol Corporate Acconting and Reporting Standard.

As the majority of the impact financial companies have is related to financing activities, in 2022 we started to assess the emissions of our loan portfolio using the PCAF methodology. According to the preliminary estimate, the volume of emissions financed by LHV's corporate loans, vehicle leasing, commercial real estate loans and housing loans (about 96% of the credit portfolio) amounted to 562,506 tons of CO2 equivalent. 183.4 tons of CO2 equivalent for every million euros borrowed. In order to obtain the most accurate results possible, we will strive to improve data quality in the future. Also by obtaining more accurate information directly from customers.

Offsetting the negative carbon footprint - In 2021, we started cooperating with eAgronom to offset the negative impact of LHV’s office activities. With the help of eAgronom, we neutralised the impact of our office activities. Our office operations are climate neutral as of 2022. Through eAgronom, we support intercropping in agricultural fields. This makes it possible to capture greenhouse gases from air, improve soil quality, and reduce the need for fertilisation.

LHV’s principles for offsetting our negative carbon footprint:

  • Offsetting must be an additional activity
  • Clarity and transparency of emissions accounting
  • Permanence
  • Exclusive claim to GHG reductions
  • Avoiding of environmental or social harms
  • Locality

What are we planning for the future?

We will repeat and refine the calculation each year. Based on which additional categories we are able to gather reliable data in, we will strive toward a fuller picture. We reduce our climate impact and offset the part we cannot reduce.

Metrics for corporate sustainability performance

We are making efforts to support Estonia’s bid to become the first in the world to develop a sustainability performance measurement system for corporate lending where private and public interests can be linked for climate-related goals.

Estonia has set the goal of a climate-neutral economy by the year 2050. Achieving this objective will require cooperation between the state and the private sector. It would also need a detailed plan. The plan should, however, be based on a transparent system to measure sustainability performance. After all, if you cannot measure it, you cannot improve it.

We're aware that merely improving our activities isn't enough to achieve extensive changes. Everyone needs to make an effort and work together. To support this process, we've thought about motivating the private sector to measure climate impact and help the entire financial industry to direct capital into sustainable investments effectively. This is necessary to speed up the transition to low CO2 emissions and to an economy that is resilient to climate change.

What have we already accomplished?

We have put together our first concept note for a database of climate impacts. In the database, Estonian companies could enter the greenhouse gas emissions generated from their business activity (tonnes of CO2).

Banks could rely on the central database in making financial decisions, and it would also be the underpinning for state support and guarantee programmes. The final system should be automated, without undue burden on companies, and should be in line with the principle of data collection minimization and the once-only principle.

We have already promoted our idea (article in Estonian by the LHV Group CEO on a common climate target), brainstormed with partners (policy planners, other market participants etc.) and are working to shape the final system and test the idea.

What is the final goal of the project?

Our goal is to be the first in the world to develop a countrywide measurement system where private and public interests are joined together for climate-related purposes, and which encompasses almost the whole economy at the enterprise level.

Our goal is to be the first in the world to develop a countrywide measurement system where private and public interests are joined together for climate-related purposes, and which encompasses almost the whole economy at the enterprise level. The idea is ambitious but feasible, especially considering Estonia’s unique profile – i.e. relatively small size (the 1,000 largest companies, including the whole banking sector, make up about 90% of the economy) and the high calibre of electronic public services.


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