by Joachim Marc Christensen

SpareBank 1 is Norway’s second largest finance group in terms of assets, and the banks in the SpareBank 1 Alliance are located all over Norway.

Even though the alliance consists of 14 independent savings banks, corporate responsibility is of essence in all. Deeply rooted in local communities, it is important for SpareBank 1 to develop close partnerships with local businesses, not only offering  services and counselling, but also supporting local initiatives.

Recognizing the urgency of solving some of the world’s biggest challenges, SpareBank 1 is increasingly focusing on sustainability in all its operations. In the coming years the alliance is determined to redefine how financial institutions can help achieve the Sustainable Development Goals (SDGs), and rethink internal processes and product development. That is also the main reason why SpareBank 1 has become a sponsor of the Global Opportunity Explorer.

We got a hold of the Head of Sustainability at SpareBank 1 Insurance, Hanne Iversen Rye, to learn more about SpareBank 1’s vision for the future, and how the alliance works with the SDGs.

How big is the role of financial institutions in reaching the SDGs?

Financial institutions must allocate capital to necessary technology development and infrastructure and help finance replacement of inefficient and polluting production processes with cleaner technology. Additionally, financial institutions can play a role in reducing inequalities, by providing access to financial services (loans and insurance) and counselling to support individuals. SpareBank 1 also finances major investments of private customers, replaces damaged goods and rebuilds houses after fire. This means that we are in dialogue with customers at points in their lives where they have to make important decisions with a potentially major sustainability impact. We think financial institutions have a role to play in educating customers about more sustainable solutions and in creating a market for sustainable products.

What are the benefits for SpareBank 1 of integrating the SDGs into its business strategy?

SpareBank 1 wants to be a part of the new economy and understand both the risks we are exposed to and the business opportunities ahead of us. As an insurer we are directly experiencing the impact of extreme weather events, such as the storms and floods in Norway in recent years. With strong roots in local communities all around Norway, it is a priority for us to drive sustainable development at a local and community level.

One of the biggest challenges for startups featured on the Explorer is getting loans and investments. How can financial institutions make this easier?

The startup phase involves high risks, and regulations and fiduciary duty are both factors that bar, for instance, insurers or pension providers from getting involved. Yet there is a potential for private and public institutions to join forces to increase funding. Public institutions can contribute by offering risk capital and consequently change the risk profile of the investment to fit private institutions with limited risk budgets. Financial institutions also differs; some can be involved in early phases while others can play a part at a later stage – for instance by contributing to developing a market for products. However, in Norway, it has also been argued that available finance is not the problem; what is missing is contact between investors and entrepreneurs, and sufficient knowledge about finance opportunities.

How can a financial institution contribute to sustainability and still provide its stakeholders with good financial results? How is SpareBank 1 balancing sustainability and profitability?

We sincerely believe that sustainability and profitability go hand in hand. Sustainability is a way of doing business, not something that comes in addition to core activities. Organizational initiatives should make sense from environmental, social and financial points of views. Environmental benefits are often connected with cost reductions, for instance in energy efficient property management. However, the opportunity to make a major positive impact and create business opportunities comes by taking it further – by integrating sustainability into new product and service development.

Extreme weather events in recent months have revealed the urgency of climate adaptation in our cities. How can financial institutions help?

Most directly, we can influence standards when we rebuild, and share knowledge on how to build with techniques and materials that can withstand changing conditions. Institutions can also go in dialogue with local governments to help take city planning to a more sustainable direction.

Smart car insurance has become a priority for SpareBank 1. How does it work and how does it make our roads safer?

Smart Car Insurance is all about motivating and encouraging safe and sustainable behavior on the road, rewarded through a pricing structure. Safe-driving with flow will lead to a price reduction. Huge amounts of data on driving patterns are used to identify a safe driving style with reduced risk of accidents. A similar driving style may also reduce the carbon footprint. How safe and sustainable the driving is, will be monitored through the SPINN app connected to the Smart Car Insurance technology. Almost every second Norwegian driver (47%) reports to be interested in an insurance product where safe driving is rewarded. There is also a huge interest in development of other categories of Smart Insurance products, such as Smart Home, Smart Life and Smart Health Insurance.

What would you say to other business leaders who are hesitant about making the SDGs part of their business strategy?

Businesses were presented with a great opportunity when the SDGs were agreed upon and the direction for society and business were outlined. Corporations that understand how to deliver on the goals will also have products that will be asked for. The task of achieving the SDGs is daunting, and in many areas we are not on track yet. We need to join forces to get there.

In a perfect world, in what ways do you see SpareBank 1 leading in sustainability in the future?

I think that the Smart Insurance concept and a focus on green financial product development can bring SpareBank 1, our customers and the communities in which we operate to very exciting places. And there is only one place to be – a world where we can tick off all the SDGs!

SpareBank 1 is a sponsor of the Global Opportunity Explorer. Read more about their work via their website.