Date: June 10th, 2011 Name: Vesa Oksanen
Position: Director, Environmental Specialist in Nordea Bank
Below are answers by Vesa Oksanen to Christian Elkjær and Josefine Risum
Christiansen’s questions concerning CSR in Nordea. Christian approached Nordea with these questions as part of their final thesis at Copenhagen Business School.
1. What is your responsibility/role concerning the Equator Principles?
Answer: I review environmental and social issues of projects falling under scope of the Equator Principles (EP) and participate in environmental and social risk management related to EP Projects if needed. I‟m responsible for keeping the Nordea‟s Equator Principles process instructions up to date.
2. What is your experience with CSR in Nordea?
Answer: I joined Nordea six months ago, so my experience of CSR in Nordea is limited to that rather short period. I have seen, that Nordea does extensive work in its direct CSR issues.
In CSR issues of actual financing cases, Nordea utilises the ERAT and SPRAT tools and completes reviews according to the Equator Principles. Nordea‟s CSR function helps our business units to live up to our various commitments in the actual financing cases when needed.
See also our CSR-report:
http://www.nordea.com/sitemod/upload/Root/www.nordea.com%20-%20uk/AboutNordea/csr/csr_2010_uk.pdf
3. Do you think CSR is fully implemented in the business areas and subsidiaries?
Answer: I do not unfortunately have the means to observe all Nordea‟s business areas and subsidiaries in this regard and that is not my job in Nordea. One piece of assurance in this respect is, that our CSR report has been audited by KPMG, which an external party.
4. Do you see any challenges with CSR in Nordea, since Nordea’s business units are in different countries?
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Answer: I do not see material challenges for CSR because of this; it is normal business to have operations in different countries. Of course we have to take into account cultural etc.
differences existing within our area of operations; e.g. between the Nordic area and Russia.
5. What are the main challenges with the Equator principles?
Answer: Equator Principles (EP) are applied to single projects, which may be large,
technically complex undertakings with multitude of environmental and social risks. For more about the EP, see: http://www.equator-principles.com/
The EP projects may differ clearly from each other. The main challenges are in the more difficult projects where it is important, that project company avoids, mitigates and manages material environmental and social risks effectively.
You can see numbers of the EP projects, which Nordea has reviewed during the last years on this page:
http://www.nordea.com/About+Nordea/Corporate+Social+Responsibility/Responsible+stand ards/How+Nordea+works+with+Equator+Principles/1475562.html
Because of our business strategy, numbers of EP projects tends to be small. Bulk of our lending is corporate lending where we apply the ERAT and SPRAT tools.
6. Do you have specific guidelines for them in every country, or how does it work?
Answer: All the EP Projects are reviewed according one same set of guidelines.
7. Do you see any value in using the Equator Principles?
Answer: There is definitely value in the EPs. They are an important environmental and social risk management tool for us in project financing business.
8. Do you see any value in CSR for Nordea?
Answer: Yes, I see value in CSR for Nordea. CSR is a natural thing for Nordea, which is a bank with Nordic values. Also our stakeholders expect us to perform on the CSR front. In the long run for Nordea, there is no other option than to have proper CSR work.
This question has many aspects. One aspect is, that according to some studies, proper CSR performance is also financially beneficial. See for example the attached report “Corporate Environmental Management and Credit Risk”, which bases on information of companies in USA.
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9. Do you have any examples of situations where the Equator Principles have made a difference?
Answer: As noted earlier, I have rather short history in Nordea. Therefore list of EP cases I have reviewed is not long yet. But, yes I know for example one case where the EP review brought to our attention two important risks, which were unknown prior to the EP analysis to parties of that transaction. Mitigation of these risks was possible after that.
10. Do you see the different cultures as a challenge for the work of CSR?
Answer: Cultural differences may pose some challenges for CSR work, but I do not see such challenges as major ones.
11. Do you think Nordea should do something to improve the implementation of CSR in the subsidiaries?
Answer: Yes, we see a need to improve performance in CSR issues continuously as world goes forward.
12. Do you think CSR contribute to better business opportunities? – Do you see a business case for CSR (that Nordea can improve ROE or income)?
Answer: New business opportunities rise e.g. in financing of renewable energy and cleantech companies. If conclusions presented e.g. in the report “Corporate Environmental
Management and Credit Risk” hold, we might expect perhaps better ROE if we do proper CSR work, but impact on ROE might be difficult to prove. Avoiding reputational problems is also important here.
13. Do you think CSR could damage Nordea?
Answer: It would be better to say, that not doing CSR could damage Nordea. Damage could happen e.g. if we entered into reputational problems, because of improper CSR work. In rare cases our client company‟s cash flows could deteriorate significantly because of e.g.
environmental liability related expenses or because of production facility closure caused by underperformance in these issues.
14. Do you think it would damage Nordea not to work with CSR?
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Answer: See question 13.
15. How do you think CSR contribute most valuable to Nordea? (risk minimization, brand, reputation, lower costs etc.)
Answer: If we do it right, CSR contributes to all of the factors you mention: reputation, brand, risk minimization and lower costs. It is also important, that our employees can be happy with Nordea‟s approach to CSR so, that they consider our business to be on sustainable basis in CSR issues too.
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