SpareBank 1 Østlandet : Østlandet's impact on nature

SpareBank 1 Østlandet's impact on nature

In this report, we examine our presumed largest footprints on nature. With new knowledge from the WWF's report "Reducing Norway's Footprint", we look at how production and consumption from our lending portfolio can break the planetary boundaries.

Introduction

Ever since SpareBank 1 Østlandet's humble beginnings more than 175 years ago, with the establishment of grain warehouses, good nature management has been an important issue for the Bank. The grain warehouses were basically savings banks based on grain rather than money. They were designed to ensure access to seed corn in spring, especially for the poor. The 'interest' due on every four bushels was half a bushel. This is our proud history, and it is based on the proper management of natural resources and measures designed to help when we humans face natural challenges, such as droughts in summer and floods in spring and autumn.

Nature can be a renewable resource if it is managed sustainably. SpareBank 1 Østlandet's main goal has been to be a driving force behind sustainable development in our market area. We primarily have an impact on nature indirectly via our customers. Therefore, we will work with our customers to achieve our goals. That is why our policies state that we also want our customers and business associates to consider whether their operations have a negative impact on the climate, environment and nature, and systematically work to mitigate their impact. They should also seek to reinforce the positive impact they can have on sustainable nature management. They should conduct risk assessments and have their own guidelines for high -risk areas relevant to their own business, suppliers and other partners. This should be included in contracts, tender specifications and elsewhere. We also want to contribute to sustainable agriculture and nature management internationally.1

Nature's negative impact on the Bank, i.e. the Bank's nature-related risk, is surveyed in a different way and reported on in our annual report using the framework provided by the Taskforce on Nature-related Financial

Disclosures (TNFD). This report does not deal with the Bank's nature-related risk due to physical changes in the natural world or transitional risk linked to greater nature conservation. This report deals with the Bank's negative impacts on nature.

Introduction .............................................................................................................................................................. 1

Negative impact on nature in Norway ..................................................................................................................... 2

The negative impact on nature from SpareBank 1 Østlandet's loan portfolio ........................................................ 5

The negative impact from housing and commercial property customers .......................................................... 6

Material footprint ............................................................................................................................................ 7

SpareBank 1 Østlandet's material footprint .................................................................................................... 7

Our measures for reducing our material footprint ......................................................................................... 8

The negative impact of agricultural customers ................................................................................................... 9

Phosphorus footprint ..................................................................................................................................... 11

SpareBank 1 Østlandet's phosphorus footprint ............................................................................................ 11

Nitrogen footprint .......................................................................................................................................... 12

SpareBank 1 Østlandet's nitrogen footprint .................................................................................................. 13

Our measures for reducing our phosphorus and nitrogen footprints .......................................................... 13

Conclusion and the way forward ....................................................................................................................... 16

1SpareBank 1 Østlandet's General ESG Guidelines (policy document) - nature, agriculture and environment

Negative impact on nature in Norway

In November 2022, the WWF launched its report Reducing Norway's footprint - bringing our production and consumption within planetary boundaries.2 This describes Norway's negative impact on nature in the following manner:

Illustration showing Norway's footprint per capita within six material topics: ecological, material, biomass, phosphorus, nitrogen and greenhouse gas footprints. It also shows the reductions required to return to being within the planetary boundaries.

2 WWF (2022): Reducing Norway's footprint - bringing our production and consumption within planetary boundaries. Oslo, Norway.

The WWF used the research on planetary boundaries as a framework for its report. This is the same framework that SpareBank 1 Østlandet uses for much of our work on sustainability. The framework describes the planet's physical limits for how much pressure it can withstand. This research was presented for the first time in 2009 under the direction of Professor Johan Rockström at the Stockholm Resilience Centre. It iden tifies nine global processes related to changes in the environment that are all driven by human activity. These nine processes regulate interactions between soil, sea, the atmosphere and biodiversity while also having an impact on the stability and resilience of the planet's entire system. If these are kept within their boundaries, they will naturally be able to manage to maintain their capacity to withstand changes and deliver essential functions. These are the prerequisites for the earth continuing to be a safe home.3 The nine planetary boundaries are illustrated below:

Illustration of the planetary boundaries with latest updates from 2022 from the Stockholm Resilience Centre4

3 University of Oslo, B.Sjåfjell and H. Ahlstrøm, SMART-prosjektet (2018) - FNs bærekraftsmål, planetens tålegrenser og det sosiale fundamentet.

4 Azote for Stockholm Resilience Centre, based on analysis in Persson et al 2022 and Steffen et al 2015:https://www.stockholmresilience.org/research/planetary-boundaries.html

Planetary boundaries	Explanation from the Stockholm Resilience Centre5
Climate	We have surpassed 390ppmv of CO2 in the atmosphere, which indicates that we have already massively exceeded the planetary boundaries for global warming. For example, we have exceeded the point where the loss of all sea ice at the poles in the summer months is irreversible. This could lead to a number of self-reinforcing factors that increase global warming and sea levels.
Biodiversity loss	Changes to ecosystems due to human activities have taken place at a faster pace in the last 50 years than ever before in human history. The main drivers are the demand for food, water and natural resources, which causes severe losses of biodiversity and changes to ecosystem services.
Ozone layer depletion in the stratosphere	The stratospheric ozone layer in the atmosphere filters out ultraviolet (UV) light from the sun. If this layer is depleted, increasing amounts of UV radiation will reach ground level.
Ocean acidification	Around one quarter of the CO2 humanity releases into the atmosphere eventually dissolves in the oceans. When a threshold value is exceeded, the resulting increasing acidity makes it difficult for essential organisms in marine ecosystems to survive.
Biogeochemical flows (nitrogen and phosphorus emissions)	The biogeochemical cycles of nitrogen and phosphorus have been radically changed by humanity due to a series of industrial and agricultural processes. Both nitrogen and phosphorus are essential mineral elements for plant growth, so the production and use of fertilisers is one of the main drivers. A large proportion of fertiliser is not absorbed by fields and therefore runs off into freshwater and the sea, which degrades ecosystems.
Changed land use	Land has been transformed for human use across the planet. Forests, grasslands, wetlands and other vegetation types have primarily been transformed into agricultural land. This change in land use is a driver behind severe reductions in biodiversity, and also has an impact on water flows and the carbon cycle, nitrogen cycle, phosphorus cycle, etc.
Exploitation of freshwater resources	Water is becoming increasingly scarce. By the end of 2050, about half a billion people will probably be vulnerable to water stress, which will increase pressure to change water systems.
Aerosols in the atmosphere	Emissions to air and pollution: humanity is changing the aerosol load by emitting more polluting gasses that condense into droplets and particles, as well as through changes to land use that increase the release of dust and smoke into the air. An estimated 800,000 people die from polluted air each year.
New chemical substances	Emissions of toxic and non-degradable substances such as synthetic organic pollution, heavy metal compounds and radioactive materials. These compounds can potentially have irreversible effects on living organisms and the physical environment, which include reduced fertility and genetic disorders.

The table shows the nine planetary boundaries. The six with orange backgrounds are defined as planetary boundaries that have been crossed, while those with a green background are still within a safe limit.

Using the planetary boundaries as its starting point, the WWF thus tries to map Norway's contributions to, and responsibility for, some of the largest footprints we leave in nature. the WWF writes in its report that: "In order to reverse nature and biodiversity loss and achieve a world within planetary boundaries, we need to both protect existing, relatively unharmed nature, and restore a significant area of our planet's lands and oceans

5https://www.stockholmresilience.org/research/planetary-boundaries/the-nine-planetary-boundaries.html