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Investments and business practices

Investments and business practices

Long-term thinking is important, as it takes time for solid business relationships to develop. Long-term thinking also contributes to a positive impact on the community and actively supports sustainability. 

Kvika supports sustainability and aims to be a leader in the range of sustainable investment opportunities available to customers. It is clear that one of the key factors for the progress of sustainable development is directing capital to sustainable structures. Kvika has adopted a Responsible Lending and Investment Policy, which includes an objective to consider environmental, social, and governance (ESG) factors when making decisions lending, changes to loan terms, refinancing and investments. The main points of the Responsible Lending and Investment Policy are summarised below:

Kvika’s Responsible Lending and Investment Policy aims to serve as guidance on implementing and following up on ESG factors in our decision-making processes for lending and investments. The aim of the Policy is to promote responsible lending and investments at Kvika, in accordance with our values of long-term thinking and sustainability. Kvika strives to take the following aspects into account when making decisions on lending and investments:  

  • implementing and considering ESG factors and other relevant laws and regulations in the analysis and decision-making processes for lending and investments;
  • asking stakeholders for relevant information on ESG factors and social responsibility, where appropriate, and providing such information to customers and beneficiaries of investment;
  • striving for recognition and implementation of ESG factors and social responsibility both within our operations and in the outside world where Kvika’s influence is felt;
  • regularly reviewing the implementation process and reporting on performance in a responsible and transparent manner.

The importance of ESG factors when making decisions should be assessed on a case-by-case basis and with regard to the nature of the loans/investments involved.

Kvika has also approved a Responsible Product and Service Policy, the main aim of which is to support and further develop our product and service range, to promote sustainability and our core value of long-term thinking. The main points of the Responsible Product and Service Policy are summarised below: 

Kvika’s Responsible Product and Service Policy seeks to include ESG factors in the decision-making and development process for new products or services. The aim of the Policy is to support and develop a responsible product and service range which supports sustainability and promotes the bank’s core value of long-term thinking. In order to achieve the aims set in the Policy, Kvika strives to take the following aspects into account when making decisions:

  • considering ESG factors when analysing products and services, whether for a new product or service or when significant changes are made to an existing product or service;
  • asking stakeholders for relevant information on ESG factors, where appropriate, in the development and/or decision-making process for a new product or service;
  • considering and taking account of the bank’s policies and rules on social responsibility when making decisions;
  • striving for recognition and implementation of ESG factors through our product and service range;
  • striving to improve success in implementing ESG factors;
  • reporting on performance as regards implementing these aspects, including discussion of corporate social responsibility and the provision of information related to the Bank’s corporate social responsibility.

Kvika has also adopted a Code of Conduct for Suppliers and encourages its partners to show respect for human rights and promote the advancement of ESG factors in their operations.   

The venture capital funds managed by Kvika and its subsidiaries are strategic investors focused on actively supporting managers in improving the operations and performance of companies owned by the funds. Kvika encourages the businesses in which it invests to espouse ESG, adopt good business practices and governance, ensure diversity in their management, and take account of environmental issues. You can find more information on venture capital here.

In the autumn of 2020, Kvika and its subsidiaries signed up to UN Principles for Responsible Investment (UN PRI), an independent association promoting responsible investment. In doing so, we committed to adhere to the six UN PRI principles aimed at promoting sustainability. As part of its UN PRI membership obligations, Kvika must submit an annual progress report to the organisation.

UN PRI Principles

UN PRI has adopted a set of six principles regarding ESG factors in relation to responsible investment, with the aim of promoting a sustainable international financial environment. Kvika commits to:  

  • incorporating ESG factors into investment analysis and decision-making processes;
  • being an active owner and incorporating ESG factors into its policies and practices;
  • requesting appropriate information on ESG factors from the parties in which it invests;
  • promoting acknowledgement and implementation of the UN PRI Principles within the investment industry generally;
  • working towards successful implementation of the UN PRI Principles;
  • reporting on its progress as regards implementing the UN PRI Principles.

Kvika is also a founding member of IcelandSIF, an organisation dedicated to responsible investment and raising investor awareness of sustainable and responsible investment methodology.  

In September 2020, Kvika signed a joint Declaration of Intent on investment in support of sustainable development, ratified by the Icelandic Government and other parties holding almost 80% of assets in the Icelandic financial market. The Declaration is a joint initiative of private parties in the financial market and government in an international context, focusing on developing investment, financing and lending activities towards sustainability and social responsibility, and on the various criteria to be pursued. The Declaration fits in well with Kvika’s values and policy on responsible investment and lending.

Furthermore, in October 2021 Kvika published its first pdfGreen Financing Framework, which serves as a framework for our policy on environmentally friendly finance and lending. The Framework received a pdfpositive opinion from the international assessment and analysis company Sustainalytics, which is a leader in this field. Financing under the Framework may include the issuance of green bonds and the raising of green deposits. Kvika recently introduced Green Future Accounts via its Auður brand – this is the first of Kvika’s products to fall under the Green Financial Framework.