Our carbon footprint

We want to know and understand the environmental impact of our operation and have taken up much more detailed calculations of our carbon footprint.

We are now also especially focused on the environmental impact higher up in the value chain, such as GHG emissions from data transmission, the production and distribution of electricity, employee travel to and from work, air travel, taxi rides, production of computer equipment and construction of our new building in central Reykjavík.

The largest GHG emission factors in the Bank’s operation are air travel, employee travel to and from work, and indirect emissions from the production of computer equipment higher up in the value chain. Emissions from traditional banking operations decreased drastically in 2020, mostly because of the impact of Covid-19 on daily activities. Air travel became a thing of the past and employees worked from home to a much greater degree. Emissions from domestic flights dropped by 86% and emissions from international flights by 84%. Remote work a large part of the year reduced emissions from travel to and from work by about 50%. Total GHG emissions from traditional operation drops by around 50% between years.

The figure below shows the breakdown of GHG emissions from Landsbankinn’s operation by origin. Calculation of our carbon footprint is in accordance with the Greenhouse Gas (GHG) Protocol Corporate Standard. The GHG Protocol is an internationally approved methodology widely used to calculate the corporate carbon footprint.

Our emissions from lending and investment activity will eventually fall under Scope 3. We are currently analysing these emissions.

The figure shows that Scope 3 emissions are the lion’s share of emissions from the Bank’s operation. These emissions are indirect, meaning that we can only indirectly affect them. Only a small portion of the carbon footprint of the Bank’s traditional operation is direct, or from electricity or heat generation.

The GHG Protocol methodology

The GHG Protocol methodology defines scope of emission as follows:

Scope 1
Direct emissions from owned or controlled sources.
Scope 2
Indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed.
Scope 3
All other indirect emissions that occur in a company's value chain. This includes computer equipment, fuel production, concrete, air travel, travel to and from work, etc. Our emissions from lending and investment activity will fall under this scope in the future.

The figure shows the proportional breakdown of GHG emissions by origin in 2020. The Bank has a lot of ground to gain when it comes to travel to and from work. GHG emissions from the production of computer equipment is a large part of the Bank’s indirect carbon footprint. Such emissions include the production of computed equipment, transportation of the equipment to the Bank and disposal thereof after use. Emissions from use of computer equipment is not accounted for here; rather, it falls under Scope 2, electricity production.

GHG emissions from computer equipment remain fairly stable between years, increasing slightly. Data transmission in the Bank’s operation increased significantly in 2020. The carbon footprint of data transmission did not increase to the same degree. This is attributable to a lower year-over-year emission factor, which measures carbon emissions from data transmission by fibre optic cable from service providers.

Emissions from employee travel to and from work are estimated based on existing surveys of transport methods. Around 30% of employees were present at the Bank’s premises on a regular basis under Covid-19. Calculations assume that all employees were present at Bank premises in Q1.

Landsbankinn is a certified CarbonNeutral® company

We have offset the Bank’s 2020 activities and achieved CarbonNeutral® company certification in accordance with The CarbonNeutral Protocol – the leading global framework for carbon neutrality. Our company operations have been offset by purchasing high quality carbon credits from two emission reduction projects in Ghana and China – under the CDM and VCS carbon standards respectively. By working with Natural Capital Partners, experts in carbon neutrality and climate finance, we can guarantee that the emission reductions are permanent, enabling us to offset our unavoidable emissions. We will nevertheless continue our efforts to reduce emissions from our operations and help customers to do the same.

Landsbankinn’s new building in central Reykjavík

Landsbankinn is currently constructing a multi-purpose commercial and business building at Austurbakki in down-town Reykjavík. GHG emissions from the construction of new headquarters fall under indirect emissions from the Bank’s operation. Excavation began in the first half of 2019, with concrete work commencing in the second half of that year. Calculation of the carbon footprint of the project is based on the contractor’s fuel consumption, production of concrete and treatment of waste from the building site.

The building will be certified under the BREEAM standard having regard for environmental management during the construction and operating phases, energy and water husbandry, selection of environmentally-friendly construction materials and minimisation of various pollution during construction. We aim to achieve an “excellent” rating, most notably for the design and construction of the building, matching the highest ratings given in Iceland.

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