Aðalheiður Snæbjarnardóttir believes that the anticipation of quarterly sustainability reports will equal or surpass that of financial reporting in the near future.
As the Sustainability Manager at Landsbankinn since 2019, she ensures that the bank’s internal and external sustainability obligations are met, but her personal green awakening started in the fashion industry.
Early aspirations to be a tailor on Saville Row led Snæbjarnardóttir to question the sustainability of the textile industry, eventually leading her to pursue a Master’s degree in Marketing and International Business.
When a fork in the road presented itself to pursue the safety of a career in accounting or a more purpose-built path challenging paradigms in sustainability, Snæbjarnardóttir took the latter, which brought her to green finance.
Snæbjarnardóttir's current position at Landsbankinn gives her the unique position to speculate that we will inevitably see nature and biodiversity impact taking the same road as carbon emissions regulations and reporting.
Comparing Journeys: Carbon Emissions and Biodiversity
While the road to measuring biodiversity impact may seem still underdeveloped, Snæbjarnardóttir notes that when she first started with Landsbankinn, there were not yet even basic methodologies in place to measure Scope 3 carbon emissions, while now that has evolved to become a major part of portfolio strategy. Snæbjarnardóttir asserts, “In the big picture, our own portfolio is where we can have a big impact.”
She highlights the science-based methodologies that helped form carbon emissions goals as the same tactic that will bring nature-based targets seamlessly into sustainability frameworks.
When asked how a company can best prepare for the future, she points to these industry-specific carbon emission targets, reviewed by scientists and aligned with the Paris Agreements goals (below 1.5°C or net zero) as a place where companies can ready themselves for the future.
Snæbjarnardóttir believes that measuring biodiversity impact will not only take a similar journey as carbon emissions but will take less time because the pathways are already there.
“You’re just introducing another side of the coin because you can stop all emissions, but if you don’t stop exploiting nature, then you won’t be able to do any business or live here either.”
How Regulations Can Clean Up Greenwashing
As the financial industries release more green bonds, impact funds, and ESG funds, we’ve entered complicated territory in measuring their efficacy and, more troubling, greenwashing intangibles to appease reporting targets.
When crosschecks like second-party opinions (SPO) are not mandatory in areas like ESG reporting, Snæbjarnardóttir notes, “how can you ensure that an ESG fund is working towards ESG or an impact fund is having an impact?”
She points to future regulations and the EU taxonomy of economic activities as a key referee to clearly define what substantiates sustainable growth.
Banks are Driving a Sustainable Transformation
Due to heightened regulatory pressure, Snæbjarnardóttir notes that the financial industry is often the first to take on voluntary initiatives. This gives them the unique position to play both the canary in the coal mine and the coach, allowing them to advise from a place of expertise to companies undertaking the same journey.
Not only can banks help guide the transformation in their clients, but Snæbjarnardóttir suggests that their voluntary actions and effectiveness, or lack thereof, have informed the EU’s creation and amendments to sustainability frameworks.
“From my perspective, it looks like they took the voluntary initiatives and packed it into the regulations, and I think biodiversity will go the same way and will see the same journey…in the financial industry.”
Start Where You Are
Snæbjarnardóttir advises companies beginning a journey of sustainable transformation to look towards the EU’s taxonomy for guidance on voluntary initiatives to take a brown business into the green. Additionally, she recommends contacting a bank account manager as an initial step in formulating an action plan for getting there.
Asked where banks have the biggest opportunity, she cites supporting companies in their transitions. “All of the banks have built up a good sustainability knowledge…and they are definitely willing to share that information, “ and surmises that at the end of the day, “the banks can’t meet their goals unless their clients do.”
Finally, Snæbjarnardóttir predicts that green literacy will become the norm, with sustainability reporting vernacular becoming as common knowledge as that in financial disclosures.
With that literacy, she predicts that by 2028 “no one will want anything to do with brown banks” as a good business will only be one where the earth is still inhabitable, and people and businesses can prosper.
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