Non-financial information

Information published in the section on non-financial information is valid for 2020 and relates to the main operations of Arion Bank. The subsidiaries are not included. Data from 2015-2019 is included for comparison. Deloitte has provided an opinion with limited assurance on non-financial reporting by Arion Bank in 2020 which is presented in accordance with the Global Reporting Initiative (GRI) and the Nasdaq ESG Reporting Guide.

Operational Parameters PDF
Environment PDF
Social PDF
Governance PDF

Operational Parameters

Operational Parameters	Unit	2015	2016	2017	2018	2019	2020
Total Assets	ISK bn.	1.011	1.036	1.148	1.164	1.082	1.173
Number of employees at the end of year	no.	-	-	-	866	735	698
Number of employees	no.	930	936	882	-	-	-

Environmental

Direct and Indirect GHG Emissions (E1 \| UNGC-P7 \| GRI: 305-1, GRI: 305-2, GRI: 305-3)	Unit	2015	2016	2017	2018	2019	2020
Scope 1	tCO2e	86,3	87,5	85,1	78,3	65	38,5
Scope 2 (location-based)	tCO2e	94,6	103,9	86,3	91,7	86,5	79,7
Scope 2 (market-based)	tCO2e	-	-	-	-	-	-
Scope 3	tCO2e	263,38	186,97	173,22	303,87	320,54	349,15
Total emissions Scope 1, 2 (location-based) and 3	tCO2e	444,3	378,4	344,6	473,9	472	467,3
Total emissions offset	tCO2e	0	0	19	0	476	470
Total emissions Scope 1, 2 (location-based) & 3	tCO2e	444,3	378,4	325,6	473,9	-4	-2,7
Scope 1 and 2 (location-based) Emissions
Total emissions Scope 1 & 2 (location-based)	tCO2e	181	191,5	171,3	170	151,5	118,2
Total emissions neutralised by carbon offset projects	tCO2e	-	-	19	-	476	470
Net operational carbon emissions Scope 1 and 2	tCO2e	181	191,5	152,3	170	-324,5	-351,8

Emissions intensity Scope 1 and 2 (location-based) (U2 \| UNGC-P7, P8 \| GRI: 305-4 \| SDG 13)	Unit	2016	2017	2018	2019	2020
Emission intensity	kgCO2e/MWh	16,13	16,97	16,19	15,71	13,38
Emission intensity per total assets	tCO2e/ISK bn.	0,18	0,15	0,15	0,14	0,1
Emission intensity per employee	tCO2e/no.	-	-	0,2	0,21	0,17

Losunarkræfni umfang 1, 2 (landsnetið) og 3 (U2 \| UNGC-P7, P8 \| GRI: 305-4 \| SDG 13)	Unit	2016	2017	2018	2019	2020
Emission intensity	kgCO2e/MWh	31,9	34,1	45,1	49	52,9
Emission intensity per total assets	tCO2e/ISK bn.	0,37	0,3	0,41	0,44	0,4
Emission intensity per employee	tCO2e/no.	-	-	0,55	0,64	0,67
Emission intensity per employee	tCO2e/no.	-	-	0,55	0,64	0,67
Emission intensity per total assets	tCO2e/ISK bn.	0,37	0,3	0,41	0,44	0,4
Emission intensity	kgCO2e/MWh	31,9	34,1	45,1	49	52,9

Direct & Indirect Energy Consumption (E3 \| UNGC-P7 \| GRI: 302-1 \| SDG 12 )	Unit	2015	2016	2017	2018	2019	2020
Total energy consumption	kWh	10.458.849	11.867.715	10.098.854	10.500.943	9.641.604	8.833.949
Of which energy from fossil fuel	kWh	335.087	339.013	329.458	303.504	251.333	150.995
Of which energy from electricity	kWh	4.032.727	4.206.952	3.736.673	4.255.984	3.575.403	2.956.243
Of which energy from hot water	kWh	6.091.035	7.321.750	6.032.723	5.941.455	5.814.868	5.726.711

Energy Intensity (E4 \| UNGC-P7, P8 \| GRI: 302-3 \| SDG 12)	Unit	2015	2016	2017	2018	2019	2020
Energy per full-time equivalent (FTEe) employee	kWh/FTEs	-	-	-	12.126	13.118	12.656
Energy intensity per total asset	kWh/ISK bn.	10.345	11.455	8.797	9.019	8.911	7.531

Energy Mix (E5 \| UNGC-P7 \| GRI: 302-1 \| SDG 7)	Unit	2015	2016	2017	2018	2019	2020
Fossil Fuel	%	8,2%	17,6%	3,5%	2,9%	2,6%	1,7%
Renewable energy	%	85,4%	73,6%	94,2%	97%	97,4%	98,3%
Nuclear energy	%	3,5%	5%	0,1%	-	-	-

Water Management (E6 \| UNGC-P7 \| GRI: 303-5.a \| SDG 6)	Unit	2015	2016	2017	2018	2019	2020
Total water consumption	m³	168.687	197.826	179.956	168.411	165.794	142.125
Cold water	m³	63.670	71.589	75.943	65.972	65.538	43.388
Hot water	m³	105.018	126.237	104.012	102.439	100.256	98.736

Environmental Operations (E7 \| GRI: 103-2)	Unit	2015	2016	2017	2018	2019	2020
Environmental Policy approved by the board	Yes/no	-	-	-	-	Yes	Yes
Company follows specific waste, water, energy, and/or recycling policies	Yes/no	-	-	-	-	Yes	Yes
Company uses a recognised energy management system	Yes/no	-	-	-	-	No	No

Climate Oversight / Board (E8 \| GRI: 102-19)	Unit	2015	2016	2017	2018	2019	2020
Does your Board of Directors oversee and/or manage climate-related risk?	Yes/no	-	-	-	-	-	No

Climate Oversight / Management (E9 \| GRI: 102-20)	Unit	2015	2016	2017	2018	2019	2020
Does your Senior Management Team oversee and/or manage climate-related risks?	Yes/no	-	-	-	-	Yes	Yes

Climate Risk Mitigation (E10)	Unit	2015	2016	2017	2018	2019	2020
Total annual investment in climate-related infrastructure, resilience, and product development	ISK bn.	-	-	-	-	-	-

Paper Management	Unit	2015	2016	2017	2018	2019	2020
Total amount of printed paper	pages	2.394.280	2.354.928	2.133.768	1.584.072	1.036.835	637.858
of which color print	pages	913.333	830.148	708.720	719.856	460.949	390.730
of which black/white print	pages	2.315.060	2.343.432	2.209.692	1.522.908	992.722	487.088
Duplex	pages	1.668.220	1.637.316	1.569.300	1.317.384	833.672	479.920

Waste Management (GRI: 306-2)	Unit	2015	2016	2017	2018	2019	2020
Total waste generated	kg	119.992	120.728	125.519	164.803	135.235,5	223.982,6
Of which sorted waste	kg	51.588	60.958	59.342	102.119	93.318,5	103.675,6
Of which unsorted waste	kg	68.404	59.770	66.177	62.684	41.917	120.307
Recycled/recovery	kg	-	-	-	97.419	64.664,5	99.632,6
Landfill/disposal	kg	1.440	3.790	27.130	67.384	70.571	124.350
Percentage of sorted waste	%	43%	50,5%	47,3%	62%	69%	46,3%
Percentage of recycled waste	%	0%	0%	0%	59,1%	47,8%	44,5%

Emission in Scope 3 (GRI: 305-3)	Unit	2015	2016	2017	2018	2019	2020
Emissions from business trips	tCO2e	238,6	162,8	151,2	269,7	293,5	90,1
Flights	tCO2e	238,6	162,8	151,2	258,5	284,6	87,2
Taxi	tCO2e	-	-	-	11,3	8,9	2,9
Emissions from waste	tCO2e	28	25	23	34	26	55,3
Emissions from employee commuting	tCO2e	-	-	-	-	-	198

Carbon Offset (GRI: 305-5)	Unit	2015	2016	2017	2018	2019	2020
Total emissions offset	tCO2e	0	0	19	0	476	470
Emissions offset by forestry	tCO2e	0	0	19	0	476	470
Does a third party verify carbon offset projects?	Yes/no	-	-	No	-	No	No

Carbon Taxes	Unit	2015	2016	2017	2018	2019	2020
Carbon tax, gas- and diesel oil	ISK/litre	5,84	6	6,3	9,45	10,4	11,45
Carbon tax, gasoline	ISK/litre	5,1	5,25	5,5	8,25	9,1	10
Carbon tax, fuel oil	ISK/kg	7,23	7,4	7,75	11,65	12,8	14,1
Carbon tax, crude oil, etc	ISK/kg	6,44	6,6	6,9	10,35	11,4	12,55
Total Carbon Tax (ESR)	ISK	193.231	201.186	205.262	283.491	258.671	169.657

Total Fuel Consumption (UNGC-P7 \| GRI: 302-1)	Unit	2015	2016	2017	2018	2019	2020
Total fuel consumption in litres	liters	33.457	33.694	32.754	30.216	24.939	15.339
Petrol	liters	2.916	1.304	1.360	1.708	534	4.120
Diesel oil	liters	30.541	32.390	31.394	28.508	24.405	11.219

Environmental PDF version

Social

CEO Pay Ratio (S1 \| GRI: 102-38 \| UNGC-P6)	Unit	2015	2016	2017	2018	2019	2020
CEO Salary & Bonus (X) to median FTE Salary	X:1	-	-	-	-	6,2	5,61
Does your company report this metric in regulatory filings?	Yes/no	-	-	-	-	-	No

Gender Pay Ratio (S2 \| UNGC-P6 \| GRI: 405-2)	Unit	2015	2016	2017	2018	2019	2020
Median total compensation for men (X) to median total compensation for women	X:1	-	-	-	-	-	1,51
Outcome of equal pay certification	%	4,8%	3,7%	2,9%	2,4%	2,1%	1,02%

Employee Turnover (S3.1, S3.2 \| GRI: 401-1.b \| UNGC-P6)	Unit	2015	2016	2017	2018	2019	2020
Employee Turnover	%	10,8	13,8	11,8	13,9	23	10,5
Left voluntarily	%	7,7	5,4	7,7	8,3	6,8	6,5
Left due to dismissal	%	2,2	7,8	2,2	4,4	13,9	3,9
Retired	%	0,9	0,7	0,9	1,2	2,2	0,1
Employee Turnover by gender
Women	%	-	-	-	71	59	68
Men	%	-	-	-	29	41	32
Employee Turnover by age
Aged 20-29	%	-	-	-	23,4	14,1	28
Aged 30-39	%	-	-	-	17,7	21,6	32,5
Aged 40-49	%	-	-	-	22,6	31,9	21
Aged 50-59	%	-	-	-	22,6	19,5	13
Aged 60-69	%	-	-	-	13,7	13	5,5
Employee Turnover by region
Greater Reykjavík Area	%	-	-	-	82,3	86	61,3
Outside Greater Reykjavík Area	%	-	-	-	17,7	14,1	39,7

Gender Diversity (S4.1 \| UNGC-P6 \| GRI: 102-8.a)	Unit	2015	2016	2017	2018	2019	2020
Total number of employees	no.	882	936	930	866	735	698
Women	%	66	65	65	64,9	65	63,8
Full-time	%	-	-	-	52	55,2	56,3
Part-time	%	-	-	-	12,9	10,2	7,5
Men	%	34	35	35	35,1	35	36,3
Full-time	%	-	-	-	33,1	33,1	34,5
Part-time	%	-	-	-	2	1,5	1,7

Equality (S4.2, S4.3 \| UNGC-P6 \| GRI: 401-3.a,b, GRI: 405-1)	Unit	2015	2016	2017	2018	2019	2020
Board of Directors
Women	%	55	50	50	42,9	42,9	42,9
Men	%	45	50	50	57,1	57,1	57,1
Age of Board of Directors
Aged 20-29	%	-	-	-	0	0	0
Aged 30-39	%	-	-	-	0	0	0
Aged 40-49	%	-	-	-	66,7	28,6	28,6
Aged 50-59	%	-	-	-	0	57,1	57,1
Aged 60-69	%	-	-	-	22,2	0	0
Aged 70-79	%	-	-	-	11,1	14,3	14,3
All Management
Women	%	41	47	48	47	48	43
Men	%	53	53	52	53	52	57
Managing directors
Women	%	33	44	50	50	33,3	42,9
Men	%	67	56	50	50	66,7	57,1
Heads of Departments
Women	%	39	34	28	30	39,4	35,3
Men	%	61	66	72	70	60,6	64,7
Regional and Branch Managers
Women	%	39	50	43	38,5	33,3	37,5
Men	%	61	50	57	61,5	66,7	62,5
Service Managers
Women	%	-	93	73	82	85,7	-
Men	%	-	7	27	18	14,3	-
Supervisors and Team Leaders
Women	%	50	44	67	60	50	42,9
Men	%	50	56	33	40	50	57,1
Account managers and service managers
Women	%	-	-	-	-	-	61,1
Men	%	-	-	-	-	-	38,9
Managers
Women	%	-	-	-	50	66,7	66,7
Men	%	-	-	-	50	33,3	33,3
Heads of Corporate Business / Account Managers
Women	%	-	-	-	33	33	-
Men	%	-	-	-	67	67	-
Other Managers
Women	%	-	-	-	25	50	-
Men	%	-	-	-	75	50	-
Age of Management
Aged 20-29	%	-	-	-	0	0	0
Aged 30-39	%	-	-	-	14,6	18,1	16,7
Aged 40-49	%	-	-	-	55,2	59	60,3
Aged 50-59	%	-	-	-	28,1	20,5	16,7
Aged 60-69	%	-	-	-	2,1	2,4	6,4
Age of Employees
Aged 20-29	%	-	-	-	17	16,9	14
Aged 30-39	%	-	-	-	25	25	24,1
Aged 40-49	%	-	-	-	31	31,3	33,4
Aged 50-59	%	-	-	-	21	21,2	22,1
Aged 60-69	%	-	-	-	6	5,6	6,3
Parental Leave
Number of women entitled to maternity leave	no.	-	-	-	26	21	28
Number of women who took maternity leave	no.	-	-	-	26	21	28
Number of women that returned to work after maternity leave	no.	-	-	-	20	-	-
Number of men entitled to paternity leave	no.	-	-	-	25	19	31
Number of men who took paternity leave	no.	-	-	-	19	14	31
Number of men that returned to work after paternity leave	no.	-	-	-	19	-	-

Employment type (S5.1 \| UNGC-P6 \| GRI: 102-8.b,c, GRI: 401-1)	Unit	2015	2016	2017	2018	2019	2020
Percentage of People Employed on Permanent Basis		-	93	92	94,6	95,4	95
Women	%	-	-	-	61,2	62,4	60,7
Men	%	-	-	-	33,4	32,9	34,2
Percentage of People Employed on Temporary Basis	%	-	7	8	5,4	4,6	5
Women	%	-	-	-	3,7	3	3
Men	%	-	-	-	1,7	1,6	2
Employees by Residence
Greater Reykjavík Area	%	-	-	-	83,7	82,4	84,8
Employees on a Permanent Basis	%	-	-	-	80	79,3	81,1
Employed on Temporary Basis	%	-	-	-	3,7	3,1	3,7
Outside Greater Reykjavík Area	%	-	-	-	16,3	17,6	15,2
Employees on a Permanent Basis	%	-	-	-	14,5	16,1	13,9
Employed on Temporary Basis	%	-	-	-	1,7	1,5	1,3
Number of New Employees	no.	-	-	-	73	51	31
Percentage of new employees	%	-	-	-	8,2	6,9	4,4
Gender of new employees
Women	%	-	-	-	56	47	42
Men	%	-	-	-	44	53	58
Age of new employees
Aged 20-29	%	-	-	-	38	45,1	29
Aged 30-39	%	-	-	-	26	31,4	38,7
Aged 40-49	%	-	-	-	30	21,6	32,3
Aged 50-59	%	-	-	-	4	2	0
Aged 60-69	%	-	-	-	1	0	0
New employees by residence
Greater Reykjavík Area	%	-	-	-	87,7	90,2	80,6
Outside Greater Reykjavík Area	%	-	-	-	12,3	9,8	19,4

Training for Employees (GRI: 404-1)	Unit	2015	2016	2017	2018	2019	2020
Avg. hours of training in total	hours	-	-	-	7	20	6,4
Women	hours	-	-	-	8	22	8
Men	hours	-	-	-	6	17	3,7
Management	hours	-	-	-	12	36	13,6
Employees	hours	-	-	-	6	16	5,5

Non-Discrimination Policy (S6 \| UNGC-P6 \| GRI: 406-1.a)	Unit	2015	2016	2017	2018	2019	2020
Policy to ensure equal opportunities and terms for all genders	Yes/no	-	Yes	Yes	Yes	Yes	Yes
Policy against bullying, sexual harassment, gender based harassment and violence	Yes/no	-	-	-	Yes	Yes	Yes
Bullying, sexual harassment, gender-based harassment and violence	no.	-	-	-	3	2	2

Health and safety of employees (S7, S8 \| SDG 3 \| GRI: 403-1)	Unit	2015	2016	2017	2018	2019	2020
Accidents in workplace and to and from work	no.	5	5	0	2	7	6
Health indicators	%	-	95,8%	96,3%	96,3%	96%	96,8%

Child & Forced Labor (F9 \| GRI: 103-2 \| SDG: 8 \| UNGC: P7)	Unit	2015	2016	2017	2018	2019	2020
Child and/or forced labor policy?	Yes/no	-	-	-	-	-	No

Human Rights (S10 \| UNGC-P1, P2\| SDG 4, 10, 16)	Unit	2015	2016	2017	2018	2019	2020
Human rights as part of equal-rights policy	Yes/no	-	-	-	Yes	Yes	Yes

Social PDF version

Governance

Board - Separation of Powers (G1 \| GRI: 102-22.v \| SDG 10)	Unit	2015	2016	2017	2018	2019	2020
Total number of board members	no.	7	8	8	7	7	7
Women	no.	4	4	4	3	3	3
Men	no.	3	4	4	4	4	4
Gender ratio in the committees chaired by the board
Women	%	-	-	-	-	50	20
Men	%	-	-	-	-	50	80

Board Independence (G2 \| GRI: 102-22.ii)	Unit	2015	2016	2017	2018	2019	2020
Does the company prohibit CEO from serving as board chair?	Yes/no	-	-	-	-	-	Yes
The CEO is a board member	Yes/no	No	No	No	No	No	No
The CEO manages committees on behalf of the Board	Yes/no	No	No	No	No	No	No
The CEO is the Chairman of the Board	Yes/no	No	No	No	No	No	No
Total board seats occupied by independents?	%	85,7	87,5	87,5	85,7	100	100

Incentivized Pay (G3 \| GRI: 102-35.b)	Unit	2015	2016	2017	2018	2019	2020
Are company executives formally incentivised to act on ESG	Yes/no	Yes	Yes	Yes	Yes	Yes	No
In regards to finance and corporate governance	Yes/no	yes	yes	yes	yes	yes	no

Collective Bargaining (G4 \| UNGC-P3 \| GRI 102-41 \| SDG 8)	Unit	2015	2016	2017	2018	2019	2020
Employees in labour unions	%	-	99,8%	99,8%	99,8%	99,6%	99,4%
Employees outside labour unions	%	-	0,2%	0,2%	0,2%	0,4%	0,6%
Percentage of people working in accordance with labour market laws	%	-	-	-	100%	100%	100%

Suppliers (G5 \| UNGC-P3, P4, P5, P6, P7, P8, P9 \| SDG 12)	Unit	2015	2016	2017	2018	2019	2020
Supplier Code of Conduct	Yes/no	-	-	-	-	-	Yes
Environmental factors when evaluating suppliers	Yes/no	-	-	-	-	-	Yes
Equality factors when evaluating suppliers	Yes/no	-	-	-	-	-	Yes
Labor rights when evaluating suppliers	Yes/no	-	-	-	-	-	Yes

Ethics & Anti-Corruption (G6 \| GRI: 102-16 \| UNGC-P10 \| SDG 16)	Unit	2015	2016	2017	2018	2019	2020
Does the company publish and follow an EC?	Yes/no	Yes	Yes	Yes	Yes	Yes	Yes
EC has been approved by the board of directors	Yes/no	Yes	Yes	Yes	Yes	Yes	Yes
Anti-corruption and bribery policy	Yes/no	-	-	-	Yes	Yes	Yes

Data Privacy (G7 \| GRI: 418-1)	Unit	2015	2016	2017	2018	2019	2020
Data privacy policy?	Yes/no	-	-	-	Yes	Yes	Yes
Implementation of the EU Privacy Regulation (GDPR)	Yes/no	-	-	-	Yes	Yes	Yes

Sustainability Report (G8.1)	Unit	2015	2016	2017	2018	2019	2020
Does the company publish a sustainability report?	Yes/no	-	Yes	Yes	Yes	Yes	Yes

Disclosure Practices (G9.1, G9.2)	Unit	2015	2016	2017	2018	2019	2020
Sustainability data to sustainability reporting frameworks	Yes/no	-	-	-	Yes	Yes	Yes
Focus on specific UN Sustainable Development Goals (SDGs)	Yes/no	-	-	-	Yes	Yes	Yes
Does your company set targets and report progress on the UN SDGs?	Yes/no	-	-	-	-	Yes	Yes

External Validation & Assurance (G10 \| GRI: 102-56 i,ii)	Unit	2015	2016	2017	2018	2019	2020
ESG disclosures assured or validated by a third party	Yes/no	-	-	-	-	-	Yes

Governance PDF version

Key to terms used

The letters E, S and G refer to factors relating to the Environment, Social and Governance as set out in the ESG reporting guide for the Nasdaq Nordic and Baltic exchanges.

GRI stands for Global Reporting Initiative. GRI helps companies and institutions analyze, collect and publish information on the economic, environmental and social impact of their activities.

UNGC stands for United Nations Global Compact. By participating in the Global Compact companies or institutions commit to work towards the UN’s Ten Principles on Sustainability.

SDG refers to the UN Sustainable Development Goals. The Sustainable Development Goals were adopted by all member states of the United Nations in September 2015. There are 17 Sustainable Development Goals and 169 targets. This table refers to the 17 goals.

Methodology for financial accounting

When calculating Arion Bank’s environmental accounts, we use The Greenhouse Gas Protocol which is a standardized methodology which has been implemented at a number of companies with good results. Arion Bank has underlined the importance of implementing its climate project within the framework of Icelandic and international legislation and regulations on the environment.

The diagram below describes the methodology according to which greenhouse gas emissions are divided into three categories, Scopes 1, 2 and 3. Broadly speaking emissions originate from the transportation of supplies to the company, from the company’s operations and from the transportation of goods and services from the company. Scopes 1, 2 and 3 are divided into direct and indirect greenhouse gases.