Equality
Landsbankinn has over several years placed great emphasis on ensuring equal pay and equal job opportunities. In 2019, the focus on equality was sharpened even further with Capacent’s Equality Indicator and the Bank received equal pay certification.
Equal pay certification legally required
Landsbankinn attained legally required equal pay certification in March 2019 and has since operated in accordance with a certified equal pay system. The gendered wage difference in the Bank is calculated regularly and in 2019 it has ranged between 1.4-1.8%, in favour of male employees. Regression analysis of December 2019 wages reveals a 1.5% gender-based wage difference.
The Act on Equal Pay Certification from 2017 provides that certification shall be based on the Equal Pay Standard ÍST 85. The key aim of equal pay certification is to counteract a gender-based wage gap and boost gender equality in the labour market. Implementation of an equal pay standard at Landsbankinn in fact means that the Bank has enacted a control system which ensures that handling and decisions about wages is based on objective factors, free of gender-based discrimination.
Emphasis on SDG No. 5 - Gender equality
Landsbankinn is focused on working to attain three of the UN's Sustainable Development Goals (SDGs), including goal 5, on gender equality. Prior to gaining legally required equal pay certification, the Bank had twice been awarded the golden seal of PwC's Equal Pay Audit, initially in 2015, first of the domestic banks. Landsbankinn wants to ensure that men and women receive equal pay for equally valuable work and has set itself the goal of ensuring at least 40% representation by either gender in the Bank's management teams.
Landsbankinn’s Gender Equality Policy is reviewed regularly and an equal rights committee is active in the Bank. Landsbankinn is a signatory of the Women's Empowerment Principles – Equality Means Business (WEPs), an international venture by UN Women and UN Global Compact. By signing WEPs, Landsbankinn committed itself to further gender equality within the company and conduct its business in accordance with the principles of corporate social responsibility.
Conference on workplace equality
In November 2019, Landsbankinn hosted a conference on equality in the workplace along with Landsvirkjun and Alcoa Fjarðaál. The conference was held in Egilsstaðir in East Iceland and was very well attended. The focus was on the importance of emphasising equality in business. Lilja Björk Einarsdóttir, CEO of Landsbankinn, spoke at the conference and participated in panel discussions.
Equality boosted with Capacent’s Equality Indicator
Landsbankinn is a member of Capacent’s Equality Indicator, a wide-reaching undertaking to analyse the status of equality within the Bank in detail. All Bank employees were involved in the project which began in 2018. During implementation of the equality indicators, goals were set in 6 categories leading up to the year 2022.
Several actions were undertaken in 2019 to work towards these goals. A development and mentor system was created to help employees strengthen their job development trajectory. Representation on behalf of the Bank in media and conferences was registered. This proved effective and a gender balance was attained at year end. A contingency plan for bullying, gender-based discrimination, sexual harassment and violence (EKKO) was introduced to employees during the year. A register has been maintained of the gender ratio of applicants in all hiring processes, logging interview calls and information about final hiring decisions. Management was instructed on the pervasiveness of subconscious prejudices and ways and means of counteracting them.
Goals for 2022 set based on Capacent’s Equality Indicator
- Development and mentor system, establishing solutions to help employees strengthen their job development trajectory.
- Role models, the gender breakdown of representatives of the Bank.
- Culture, ensuring that processes related to EKKO are clear and credible and that employees receive regular instruction about EKKO.
- Education, events on equality issues and educational campaign for employees.
- Hiring process, work towards eliminating unconscious prejudices in personnel appointment.
- Equal gender representation, achieving a 40/60 gender ratio in all levels of management.
Key focus points in gender equality:
- Landsbankinn is a workplace where men and women have equal opportunity for employment and board membership.
- Landsbankinn aims to attain a gender balance in its workforce and to avoid earmarking certain jobs for either gender.
- Landsbankinn pays equal wages to men and women for equally valuable work.
- Landsbankinn is a workplace that allows its employees to harmonise work and private life.
- Landsbankinn does not tolerate bullying, discrimination, gender-based or sexual harassment or violence.
- Landsbankinn ensures that all employees have equal opportunities for job development, to train and study.
Gender ratios in Landsbankinn
Responsible investments
In recent years, Landsbankinn has worked to implement a Policy on Responsible Investment. Emphasis is placed on the integration of sustainability in core operations.
Landsbankinn's Policy on Responsible Investment reflects work practices that have been shaped in recent years, as well as the challenges the future holds. The next steps for Landsbankinn will include integrating ESG issues in the process of investment decisions in a structured manner, both as relates to listed and unlisted equities and bonds.
The Policy on Responsible Investment has regard for the United Nations Principles for Responsible Investment (UN PRI) of which the Bank has been a member since early 2013. Members of UN PRI oblige themselves to publish a Communication of Progress report on their adherence to the guidelines and the Bank has done so in recent years. UN PRI requires members to demonstrate clear progress. The progress reports are intended for investors, customers and stakeholders and are published on the websites of PRI and Landsbankinn.
The integration of environmental, social and governance (ESG) factors in the investment process has a positive impact on return on investment in the long term and reduces operational risk. The business environment is changing and a company's stance on sustainability and social responsibility has begun to factor in risk assessment, as well as in the evaluation of growth opportunities.
In engaging in an active dialogue on ESG and sustainability with other companies, Landsbankinn wishes to focus on mitigating action and ensure long-term benefits for the Bank and investors. As regards responsible investment, Landsbankinn's practices build on active communication whereby exclusion is a rare exception.
- International asset management firm LGT Capital Partners, Landsbankinn’s partner, is a global leader in the field of responsible investment.
Article on Umræðan (in Icelandic)
Expert knowledge of green bonds
Over the past few years, the Bank has developed and built expertise in green bonds. Green bonds allow for the financing of environmentally friendly projects. Interest in green bonds has increased steadily in Iceland in recent years, in line with exploding interest abroad. Increased awareness of climate and environmental issues and pressure from the public has encouraged countries, municipalities and private companies to place greater weight on these issues. Landsbankinn has endeavoured to build knowledge of so-called sustainable bonds, i.e. green bonds, red bonds (issued to fund social commitments) and blue bonds (issued to finance ocean-friendly projects).
In 2019, Landsbankinn Markets worked with Municipality Credit Iceland towards the certification of its green bond framework. By offering green loans, the MCI aims to encourage municipalities to more selectively choose environmentally friendly projects that minimise climate change. The framework has been reviewed by Sustainalytics, a leading global provider of ESG ratings.
In July 2019, Reitun ehf., Landsbankinn and Landsbréf signed a service agreement providing for Landsbankinn and Landsbréf to obtain ESG ratings for issuers of equities and bonds in portfolios under management by the two companies. This agreement is the next step towards introducing procedures for responsible investment, continuing along the path which the Bank and its subsidiary Landsbréf have set for themselves in recent years.
Supplementary guidelines for investment analysis
Landsbankinn Economic Research has in the past couple of years gathered strategic information about the operation of listed companies with regard for sustainability and social responsibility. This work is based on a standardized questionnaire that pertains to the main elements of ESG issues. The questionnaire represents Landsbankinn's first steps to gathering information about how listed companies approach these matters. Responses to the questionnaire were made available to investors via Economic Research's website in 2017. To date, the responses are only for the attention of investors and the department does not evaluate the answers. In the long term, the aim is to give more weight to these issues in the evaluation of investment opportunities. The aim is to implement sustainability principles in general analysis work in the future, in line with the Bank's obligations under the tenets of responsible investment.
- Municipality Credit Iceland has received a certification of its green bond framework.
Article on Umræðan (in Icelandic)