Nordea will consider revising its climate targets as it is “well ahead” in meeting its current set of pledges, the group’s head of climate and environment has told Responsible Investor.
The determination will be made as part of Nordea’s annual review of its targets, which cover both financed emissions targets and operational targets, to make sure they are “fit for purpose”, said Peter Sandahl.
By the end of last year, Nordea had reduced emissions from its own operations by 53 percent from 2019 levels, against a commitment to cut operational emissions by more than 50 percent by 2030.
A key part of the Nordic group’s climate strategy is the utilisation of carbon dioxide removal (CDR) to neutralise the remainder of its operational emissions, with an aim of delivering a net positive carbon contribution by the end of 2030.
In March, Nordea announced a major push to support technology-based CDR by entering into a multi-year contract to buy 68,000 carbon credits in a project that will capture and permanently store carbon dioxide from a Danish biogas plant.
The transaction will start generating carbon removal in 2026, part of which will be utilised by Nordea to offset its own emissions. The group has not revealed the amount of emissions it plans to neutralise via carbon removals.
Sandahl confirmed that the group will continue to seek out new CDR projects. “This was the first contract of this kind we entered into, and we will continue to follow the market and build up our project pipeline. Our future needs will depend on many variables, including how fast we decarbonise our own operations.
“Our emissions forecasting and internal carbon pricing scheme are important components in estimating future needs and calibrating our portfolio size.”
Nordea hopes the transaction will provide stability for the CDR market and is calling on other financial institutions to follow its lead.
“CDR technologies with high quality and durability will be essential if we are to reach the Paris Agreement,” said Sandahl. “Buyers need to act now in order to support economies of scale tomorrow and we think the financial industry has a role to play in that.”
Asked to comment on controversies around low-quality CDR products and the importance of prioritising emissions reduction, Sandahl said Nordea’s approach would be aligned to best practices such as the Oxford Principles for Net Zero Aligned Carbon Offsetting.
In February, HSBC announced that it would push back emissions targets for its operations by 20 years due to a disinclination to leverage offsets.
“It has become clear that we would need to rely heavily on carbon offsets to achieve net zero in our own operations and supply chain by 2030,” said the group. “This approach would not be aligned with recently updated guidance from the Science Based Targets initiative (SBTi) on the role of offsets in meeting corporate net zero claims.”
HSBC withdrew a previous commitment to seek SBTi certification in 2023 but has said it would still engage with the target-setting group.
The Net Zero Asset Owner Alliance is separately expected to develop resources on the topic as it seeks to encourage members to “contribute to a liquid and well-regulated carbon removal certificate market before 2030”. However, members are not allowed to use CDR to achieve their own portfolio climate targets.
The Green Finance Institute estimates that CDR will need to scale up by 1,000 times over eight years to reach the IPCC’s least ambitious scenarios after having delivered only 45,500 tonnes of durable carbon removals to date.
