SEB sets emissions targets for truck manufacturers in its portfolio

Swedish bank SEB is asking its clients who manufacture heavy vehicles to increase the share of zero emission truck sales, in a bid to decarbonise its own financing portfolio.

European banks are accelerating their efforts to lower the carbon footprint of their lending portfolios, as pressure from the European Central Bank to tackle climate risks is rising. Last month, Deutsche Bank set emissions targets for coal, cement and shipping clients, covering 55% of its corporate loan portfolio.

Truck manufacturers that receive funding from SEB will have to grow the percentage of zero emission vehicles in their overall sales from 0.5% in 2022 to 35% by 2030, in line with the latest International Energy Agency’s roadmap to 1.5°C.

Interestingly, this targeted sector action from the Swedish bank comes the same week that Swedish truck maker Scania announced its intention to only source “carbon-free” steel to make electric vehicles by 2030. Both initiatives signal the ramp-up of heavy vehicle decarbonisation efforts, after it emerged that the only indicator on track for a 1.5°C warming scenario is small electric vehicle sales.

SEB Chief Sustainability Officer on the initiative

SEB Chief Sustainability Officer Hans Beyer said this new target means three quarters of the bank’s financed emissions are now covered by its net zero strategy. “The 2030 sector targets are an important part of our effort towards reaching a net-zero credit portfolio by 2050 or sooner,” he noted, adding that the bank is making “good and stable progress”.

SEB also revised its climate target for oil and gas financing, aiming for a 70% reduction in absolute financed emissions from this sector, compared with 55% previously. The bank has already reduced its fossil fuel credit exposure from 4.8% in 2019 to 2.8% today, and aims to cut this even more by 2030.

While it has previously said it would “gradually shift away from oil and gas companies that lack a credible transition plan”, SEB has also rejected shareholder proposals to stop funding fossil fuels entirely. In 2022, the bank’s absolute financed emissions from oil and gas stood at 7.3 million tonnes of CO2 equivalent.

SEB sustainable finance activities

SEB also shared progress on the targets it set in 2021 for power generation, steel, car manufacturing and household mortgages at yesterday’s annual sustainability event.

Parallel to the bank’s strategy to reduce emissions from the polluting sectors in its portfolio, it has also more than doubled ‘sustainable finance’ (which in SEB’s definition include sustainability-related lending, sustainable finance advisory, sustainable investment products and venture capital investments in green technologies) in the past two years. These activities now represent 7.8% of its credit portfolio.

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