Danske Bank A/S : Climate Action Plan

Danske Bank's Climate Action Plan

Our Roadmap to Net Zero

January 2023

Contents

Message from our CEO

Our role in the green transition

Our plan to achieve net zero

Lending

2 CLIMATE ACTION PLAN

About this report

Our Climate Action Plan covers the activities of the Danske Bank Group. The report provides an overview of our targets, actions and initiatives in relation to our climate efforts.

We have committed to setting science-based targets and have submitted our targets for validation by the Science Based Targets initiative (SBTi). The targets may change as a consequence of the validation process.

The Climate Action Plan includes information that is subject to uncertainties stemming from limitations in underlying methodologies and data. In our analysis and target-setting, we have deployed estimates based on various frameworks and methodologies as discussed throughout the Climate Action Plan and in the appendices. As methods and data availability is constantly evolving, updates to methodologies and assumptions may result in different conclusions.

In alignment with net-zero recommendations, targets, actions and initiatives in relation to our climate efforts requires forward-looking parameters and longer-term time horizons to account for the nature of climate change. The forward-looking statements made in this report reflect our current view of future events and are based on expectations, projections and estimations that involve large uncertainties and risks, including, but not limited to, future market conditions, changes in regulation and realisation of plans and strategic objectives. The forward-looking assessments may therefore be subject to change and should not be viewed as reliable indicators of future performance or as complete or accurate accounts of actual performance. Caution must therefore be exhibited when interpreting this report.

The achievement of our set targets is dependent on the collaboration with and the initiatives of our customers, investee companies, and international and domestic governments.

The developments towards our sector may not be linear as development in technologies and other fundamental circumstances may affect individual sectors year on year.

This publication has been prepared for information purposes only, and it is not to be relied upon as investment, legal, tax, or financial advice.

We expect data quality and coverage to increase over the coming years, driven by increased reporting and disclosure obligations. New and improved guidance and scientific research is also expected, and Danske Bank reserves the right to update targets, methodologies and approaches and to perform relevant restatements of baselines when relevant.

Get in touch

We welcome any comments, suggestions or questions you may have regarding this report or our performance. Please send an email to [e-mail].

Follow us

You can stay up to date on the most recent developments at danskebank.com/sustainability, and you can follow Danske Bank on Twitter, LinkedIn and Instagram.

Asset management	Life insurance and pension

Own operations

Looking to the future

Appendix

CLIMATE ACTION PLAN

3

Contents

04 Message from our CEO

06 Our role in the green transition

1. Our plan to achieve net zero
2. Danske Bank Group targets

12	Approach to climate action
14	Lending - Supporting our customers' transition
16	Lending targets
18	Shipping

1. Oil and gas
2. Power generation
3. Other carbon-intensive sectors (steel and cement)
4. Commercial real estate
5. Personal mortgages
6. Agriculture
7. Approach to advisory services and solutions

1. New technologies
2. Asset management - Enabling investments in the green transition
3. Asset management targets
4. Approach to climate investing

1. Life insurance and pension - Facilitating investments in the green transition
2. Life insurance and pension targets
3. Approach to decarbonising our portfolios

1. Own operations - Reaching net zero
2. Own operations targets
3. Approach to reducing our own environmental footprint

44 Looking to the future

46 Appendix

46 Appendix 1 - Lending

1. Appendix 2 - Asset management
2. Appendix 3 - Life insurance and pension

1. Appendix 4 - Own operations

55	Appendix 5 - Abbreviations

Contents

Message from our CEO

Our role in the green transition

Our plan to achieve net zero

Lending

We have the responsibility and ability to make a difference.

Asset management	Life insurance and pension

Own operations

Looking to the future

Appendix

CLIMATE ACTION PLAN

5

Dear reader,

Over the coming decades, climate change will remain the greatest challenge facing our societies, posing risks to lives and livelihoods, to business models, financial assets and to our very way of life on planet Earth.

Although climate change represents a profound threat to our societies and the global economy, the green transition is also a commercial opportunity for entrepreneurs and businesses that work to provide ideas and solutions that make this transition possible. And the green transition provides opportunity for all of us to reinvent our economies to make them more resilient and sustainable.

A profound responsibility

At Danske Bank, we are committed to playing a leading role in supporting the green transition to a low-carbon society. And as Denmark's largest bank and one of the largest financial institutions in the Nordic countries, we have the responsibility and ability to make a difference

• for our around 3.3 million customers, and more broadly in the societies we are a part of. We contribute by providing specialist financial advice and by financ- ing our customers' transition to a more sustainable future.

The main challenge in fighting climate change is to transition to a low-carbon energy system. Today, the energy produced from fossil fuels that keeps our lights on, heats or cools our homes, transports our goods and fuels their production accounts for around 75% of carbon emissions globally. To pivot our societies away from fossil fuel dependen- cy, we need to build a resilient and sustainable energy system. To succeed, we need to significantly expand the supply of renewable energy while at the same time making the necessary investments on the demand side to enable the adoption of new electric and low-carbon technologies as well as continuing to drive energy efficiency.

Danske Bank plays a critical role by helping households and businesses to invest in energy efficiency and to transition towards clean energy sources. We also support the development of a more sustainable energy supply by working with energy utilities and oil and gas companies to finance the development and expansion of renewable energy, reduce emissions and speed up the transition to a low-carbon energy system.

We fully support the transition The challenge ahead is not merely to work with companies that are already green today. As a bank that works across all areas of the economy, our role is to engage with our customers and invest in companies that have the potential

• and the commitment - to support the transition to a low-carbon society.

At Danske Bank, we have made major strategic commitments to leading international frameworks, thereby expressing our commitment to transition our business activities to net zero. In 2019, we became a signatory of the UN Principles for Responsible Banking, and during 2020 and 2021 we became members of the Net-Zero Asset Owner Alliance, the Net Zero Asset Manager Initiative and the Net-Zero Banking Alliance. These commitments require us to align our core strategy, governance, lending and investments with the objectives

of the UN Sustainable Development Goals and to set ambitious intermediate targets in line with the best available scientific research while continuously reporting on execution and progress towards becoming net zero by 2050 or sooner.

Targets will steer our path towards net zero

To deliver on the commitments, we have set intermediate 2030 targets for carbon emission reductions across our lending and investment portfolios, including for the most high-emitting sectors

within our activities as well as for our own operations. And to ensure that our efforts are consistent with the goals of the Paris Agreement, we have sent our targets to the Science Based Targets initiative to validate that our methodologies are based on the latest scientific research and that our targets are in alignment with limiting global warming to 1.5°C.

We have worked hard to set targets for our business and develop the tools and the systems to measure and assess our climate impact. This includes disclosing our financed emissions baseline, setting intermediate net-zero targets, outlining our strategic actions, and enabling us to transparently report on our progress towards achieving the goals we have set for ourselves, our customers and society.

Creating sustainable progress for generations to come

At Danske Bank, we unite around our purpose of releasing the potential in people and businesses by using the power of finance to create sustainable progress today and for generations to come. As a leading Nordic bank, we want to play a key role in the sustainability transfor- mation. We have a clear ambition to lead on sustainable finance in the Nordic countries, and to be the leading bank for sustainable finance in Denmark.

The challenges ahead are daunting, but in addressing these challenges we will continue to play the role that we have always played. For 150 years, we have helped our customers adapt and benefit from new times and opportunities, and we remain committed to continuing to do so, as we advance on the journey towards a low-carbon society.

Carsten Egeriis

Chief Executive Officer

Danske Bank