Corporate Responsibility 2018 - UN Global Compact Communication on Progress - Danske Bank
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Corporate Responsibility 2018 UN Global Compact Communication on Progress
About this report
This report constitutes The report covers the activities in Dan-
Danske Bank Group’s ske Bank Group. In order to provide a
balanced overview of corporate respon-
Communication on Progress sibility matters related to our business,
to the UN Global Compact we assess and report on material
and covers the financial issues, see p. 15.
year 1 January 2018 to To ensure data consistency, definitions
31 December 2018. and descriptions of data are provided in
With this document, we fulfil our business procedures, and internal
control procedures have been estab-
the requirements regarding lished to ensure that data is reported
the management’s report of according to the definitions outlined in
section 135a and b of the our Corporate Responsibility Reporting
Danish Executive Order on Principles, see p. 38. Danske Bank
has engaged Deloitte to verify selected
Financial Reports for Credit performance data according to the ISAE
Institutions and Investment 3000 assurance standard, as outlined
Companies, etc. in the independent assurance report,
see p. 37.
Danske Bank Group’s annual reporting
suite for 2018 includes the Annual
Report 2018, Risk Management 2018
and this report. In addition to present-
ing detailed and segmented data on
corporate responsibility issues in our
Corporate Responsibility Fact Book
2018, we also issue a Statement on
Modern Slavery Act 2018 and a State-
ment on Carbon Neutrality 2018, all of
which are available at danskebank.com/
societal-impact.
We always value feedback and strive to
improve our reporting, so we welcome
any comments or suggestions you may
have regarding this report or our perfor-
mance. Please contact Jeanette Fangel
Løgstrup, Head of Societal Impact and
Sustainability, at jlg@danskebank.dk.
danskebank.com/societal-impact
Contents 04 Foreword by Jesper Nielsen 06 The Estonia case BUSINESS AND STRATEGY 08 Our business in brief 10 Taking stock of the 2015-18 strategy 12 Moving ahead with new 2025 strategy 14 A strong focus on compliance and sustainability governance STRATEGIC THEMES 16 Building financial confidence in a cashless society 17 Accessible finance for everyone 18 Partnering up to support impact start-ups CORE BUSINESS: CONTRIBUTING TO SOCIETY 20 Creating long-term value 22 Stakeholder dialogue 23 Employee volunteering and charity CORE BUSINESS: RESPONSIBLE CUSTOMER RELATIONSHIPS 24 Customer engagement 26 Fighting financial crime 27 Protecting our customers against fraud 28 Sustainable finance CORE BUSINESS: RESPONSIBLE EMPLOYER 30 People and culture CORE BUSINESS: ENVIRONMENTAL FOOTPRINT 32 Environmental performance CORE BUSINESS: RESPONSIBLE SUPPLIER RELATIONSHIPS 34 Responsible sourcing 36 Key performance indicators 37 Independent auditor’s assurance report 38 Reporting principles
Foreword by Jesper Nielsen
Corporate Responsibility 2018 5
Dear reader,
In many ways, 2018 has been a year This strategy builds on the achieve-
of challenges and change for Danske ments of our Corporate Responsibility
Bank. Strategy 2015-18, which is summari-
sed in this report along with our 2018
The overriding issue has been the performance.
suspicious transactions at our Estonian
branch from 2007 to 2015 and the The strategy draws upon the UN’s
major deficiencies that allowed these 2030 Agenda for Sustainable Develop-
to take place. As the largest financial ment and the 17 Sustainable Develop-
services provider in Denmark and one ment Goals, and we continue to support
of the largest financial institutions in and align the way we conduct business
the Nordic region, we have a particular with the 10 principles of the UN Global
responsibility to conduct our business in Compact. Our goals for 2025 are to
a sustainable and transparent manner. help people and businesses become
The Estonia case clearly shows that we financially confident and secure in a digi-
have failed to live up to this responsibi- tal age, help social entrepreneurs grow
lity. their positive impact on society, and
help society transition to a net-zero car-
It is disappointing and unacceptable, bon economy through green financing.
and we continue to offer our apologies.
A first initiative was the launch of a new
The case has led to intense self-scrutiny Nordic digital hub named +impact to
and justified public scorn. Today, we help purpose-driven start-ups increa-
are in a different place than when the se their impact on society. Another
events in Estonia took place. Several 2018 example is our support for the
anti-money laundering measures have recommendations of the Task Force on
been implemented over the past years, Climate-related Financial Disclosures
and we have decided to make substan- (TCFD). This cements our commitment
tial investments in 2019 to further to integrate climate considerations into
accelerate our ability to prevent financial our governance setup, strategies, risk
crime and terrorist financing. We cannot management framework, metrics and
guarantee that suspicious transacti- external reporting.
ons will not take place, but to prevent
something similar from ever happening Transparency and engagement with
again, nourishing a strong compliance stakeholders is important to us, and we
culture, improving our systems to fight invite you to engage in dialogue with us
financial crime and working closely with on our role and responsibilities in the
the authorities and others will remain of transition towards a sustainable
the highest priority for us. future.
We know we have a huge task ahead Jesper Nielsen
of us to regain our stakeholders’ trust, Interim Chief Executive
and taking our corporate responsibility Officer of Danske Bank
efforts to the next level is an important
part of this journey.
Strenghtening our societal impact
In May 2018, we launched our Nordic
Integrator corporate strategy to help
bring Danske Bank closer to our cust-
omers, colleagues and society. Key
elements of the strategy centre upon
ensuring sustainable core business
processes as well as making a positive
difference in the societies we are part of.
We refer to this as our societal impact
and have developed a separate Societal
Impact and Sustainability Strategy to
guide the way forward towards 2025.
The Danish parliament’s Business, Growth
and Export Committee hearing into the
Danske Bank money laundering case
The Estonia case
The Estonia case has been a major again. In this process, we wish to be as quality and the efficiency of our con-
focus point for Danske Bank and all our transparent as possible and we share all trols and to integrate the processes
stakeholders in 2018. relevant findings with the authorities on into the customer journey as part
an ongoing basis. of our ambition to offer the best
The findings from the investigation of customer experience.
the non-resident portfolio at the Esto- The case has led us to take a number of
nian branch, published in September, actions: • Our governance and control sys-
showed that a series of major deficien- tems have also been improved.
cies in governance and control systems • Several members of management Danske Bank’s new Chief Com-
in Danske Bank made it possible to use as well as staff connected with pliance Officer is a member of the
Danske Bank’s branch in Estonia for the case have left Danske Bank, Executive Board and reports directly
suspicious transactions. among these former CEO Thomas F. to the Board of Directors and day-
Borgen. On the Board of Directors, to-day to the CEO. Furthermore, on
The approximately 10,000 customers the Chairman of the Board and the top of basic and mandatory AML
in the non-resident portfolio carried out Chairman of the Audit Committee training, our new AML Academy
transactions for around EUR 200 billion were replaced in December. Another provides specialised training in
in the period from 2007 to 2015, but two members will step down at the detecting and combating financial
only a small part of these customers and upcoming Annual General Meeting. crime for relevant employees.
transactions were reported as suspi-
cious to the authorities at the time. The • As reported in September, eight • We have also taken several steps
investigation includes additional custom- former employees of our Estonian to increase our financial strength.
ers with non-resident characteristics. In branch have been reported to the We have increased our Pillar II
September, it was reported that most of police, and a further 42 employees requirement by DKK 10 billion and
the customers investigated by that time and agents have been reported to have cancelled our share buy-back
(6,200 customers, starting with the cus- the Estonian Financial Intelligence programme, resulting in an addition-
tomers hitting the most risk indicators) Unit (FIU). al DKK 3.1 billion of CET1 capital.
should have been classified as suspi- Furthermore, we will not launch a
cious and reported to authorities. • We have strengthened our anti- share buy-back programme in 2019.
money laundering (AML) measures
It is clear that we have not lived up to and financial crime compliance • The estimated gross income from
our own standards, our responsibility efforts and continue to do so. We the non-resident portfolio in Estonia
and the expectations of our stakehold- have also increased the number of in the period from 2007 to 2015 of
ers in this case. We did too little too late people working to combat finan- DKK 1.5 billion has been set aside
both in terms of closing the portfolio cial crime considerably. We are net of confiscation as a donation for
down and realising the seriousness and using this experience to learn and measures to combat financial crime.
scope of the problems. We failed to to improve our efforts in financial The donation will be transferred to
grasp the magnitude of the case and to crime compliance in order to prevent an independent foundation, which
adjust our response and communication something similar from happening will be set up to support initiatives
accordingly. This is disappointing and at Danske Bank again. aimed at combating international
unacceptable, and we offer our apolo- financial crime, including money
gies to all of our stakeholders – not least • On the basis of learnings from the laundering. The foundation will be
our customers, investors, employees, Estonia case and following a full set up independently from Danske
regulators and society in general. We review at the end of the year of our Bank with an independent board.
acknowledge that we have a big task efforts and ambitions within AML,
ahead of us in regaining their trust. We we have decided to accelerate our • It has been very important to us
are working hard to get to the bottom of AML improvement efforts over the to engage with our customers and
the matter and to learn from it, so that next three years through earmarked address any concerns and ques-
we can take all necessary steps to pre- investments of up to DKK 2 billion. tions that they may have. At the
vent something similar from happening The purpose is to improve both the end of 2018, we had held around
Corporate Responsibility 2018 7
150 town hall meetings at our ment of Justice (DoJ) in connection Nielsen. They replaced Ole Ander-
branches all across Denmark. We with a criminal investigation relating sen and Jørn P. Jensen, who both
also encourage our staff across the to our Estonian branch conducted stepped down. Karsten Dybvad
organisation to use all customer- by the DoJ. We also remain under is now Chairman of the Board of
facing opportunities to talk about the investigation by the Danish FSA and Directors.
issue and the measures we have the Estonian FSA, as well as the
taken to prevent something similar Danish State Prosecutor for Serious • On 9 January 2019, an action
from happening again. Our customer Economic and International Crime was filed in New York by an alleged
satisfaction scores have been ad- (SØIK) and the Estonian Office of the holder of Danske Bank’s American
versely impacted, especially among Prosecutor General (the Estonian Depositary Receipts, representing
Danish retail customers. We remain FIU). We cooperate fully with all its ordinary shares, against Danske
committed to regaining the trust of authorities. Bank. The complaint seeks unspeci-
our customers, but we acknowledge fied damages on behalf of a putative
that this will not happen overnight. • On 4 October, the Danish FSA class of purchasers of Danske
ordered us to reassess our solvency Bank’s American Depositary
The investigation into the customers in need with a view to adding an abso- receipts between 9 January 2014
the terminated non-resident portfolio* lute minimum of DKK 10 billion to and 23 October 2018. Danske
of the Estonian branch continues, and our Pillar II requirement. In addition Bank intends to defend itself against
we keep the authorities informed of all to increasing our Pillar II require- the claims. The timing of completion
progress on an ongoing basis. ment, we revised our CET1 capital of the lawsuit and the outcome is
target from 14-15% to around 16% uncertain.
The timing of the completion of the and our total capital target from
investigations, the outcome and the above 19% to above 20%. At the • On 11 January, we announced that
subsequent discussions with the au- same time, the share buy-back pro- we had received a letter from the
thorities are subject to uncertainty. It is gramme for 2018 was discontinued. French Tribunal de Grande Instance
not yet possible to reliably estimate the de Paris summoning Danske Bank
timing or amount of any potential settle- • The Estonia case has also impacted to an interview to discuss matters
ment or fines, which could be material. our ratings. Following the publication relating to the ongoing investigation
of the findings of the investigations, into organised money laundering
Below is a short summary of the key Moody’s downgraded Danske of tax evasion proceeds. The letter
events related to the Estonia case in Bank’s issuer rating from A1 to states that the judge envisages
2018 and 2019: A2 and changed the outlook to placing Danske Bank under formal
negative, while Fitch and S&P both investigation after having previous-
• On 3 May, the Danish Financial Su- maintained their issuer ratings of ly changed Danske Bank’s status
pervisory Authority (FSA) published Danske Bank but also changed the in the case to that of an assisted
its assessment of the role of Danske outlook to negative. witness.
Bank’s management and senior em-
ployees in relation to the Estonian • On 2 November, we published the • On 16 January, we issued USD
case. Danske Bank received eight results of the EU-wide stress test 3 billion worth of new funding in
orders and eight reprimands from conducted by the European Banking non-preferred senior format. The
the FSA and immediately launched Authority. In the adverse scenario, transaction demonstrated that de-
measures to comply with all require- Danske Bank had a CET1 capital spite the Estonia case, Danske Bank
ments. buffer of almost DKK 10 billion. The retains good market access. We
test took into account the capital acknowledge, however, that current
• On 18 July, we announced that we need and assumed costs in relation spreads are significantly wider than
do not wish to benefit financially to the Estonia case, within the scope those applying to our NPS issuance
from suspicious transactions in of the Danish FSA decision of 4 in June 2018 and that this is due
Estonia in the period from 2007 to October 2018. partly to the negative impact of the
2015. Consequently, we decided to Estonia case on our reputation.
donate the estimated gross income • On 19 and 21 November, Interim
from the non-resident portfolio CEO Jesper Nielsen participated in As is clear from the above, the Estonia
in that period to an independent AML hearings at the Danish and case has had a substantial impact on
foundation supporting initiatives to European parliaments, respectively. Danske Bank, and the case will prob-
combat international financial crime. He answered questions from politi ably continue to impact us in 2019.
cians regarding the Estonia case However, we remain dedicated to learn-
• On 19 September, we published and our efforts to prevent something ing from this case in order to prevent
the findings of the Estonia inves- similar from happening again. anything like this from happening again.
tigations. We also announced Consequently, going forward we will
the resignation of CEO Thomas F. • On 28 November, SØIK presented continue our efforts to get to the bottom
Borgen, and on 1 October, he was Danske Bank with a preliminary of the case and will keep the authorities
relieved of his duties. Jesper Nielsen charge. informed of all progress and findings.
was appointed Interim CEO as of the
same date. • On 7 December, an Extraordinary
General Meeting was held to elect
• On 4 October, it was announced two new members to the Board More insights
that we had received requests for of Directors. These were Karsten Find more details about the Estonia case at
information from the US Depart- Dybvad and Jan Thorsgaard danskebank.com/investigations.
* Terminated portfolio as defined in the report by Bruun & Hjejle as of 19 September.
BUSINESS AND STRATEGY
Our business in brief
Danske Bank Group is a Nordic universal bank with bridges to the rest of the world. Since
our foundation in Denmark in 1871, we have been providing banking services for retail and
commercial customers, and today our home market has expanded to cover the entire
Nordic region.
In May 2018, we launched our corporate strategy, Nordic products, solutions and services, and we engage with our
Integrator, designed to bring Danske Bank employees closer to customers at our branches and through a wide range of self-
our customers, their colleagues and the societies in which we service and digital transaction solutions.
operate.
With our ambition to be a solid, balanced and predictable bank,
The Nordic Integrator Strategy builds on the Essence of we are committed to delivering value to our key stakeholders
Danske Bank, which sets out our vision, strategic core, and to making a positive societal impact in the societies we are
customer promise and core values. The strategy serves as the part of. We can only create value if our key stakeholders trust
foundation for all our business activities across all units and us to do so, and we earn this trust by working in an integrated
countries. We combine financial expertise with innovative manner in alignment with our aspirations framework.
The Essence of Danske Bank
Vision Core values
To be recognised as the most trusted financial partner We deliver expertise – make knowledge relevant
Strategic core We act with integrity – be responsible
We are a modern bank for people and businesses across
the Nordics with deep financial competence and leading, We create value – make a difference
innovative solutions
We progress through agility – embrace change and be responsive
Customer promise
We help customers be financially confident and achieve We believe in collaboration – engage, listen and act
their ambitions by making daily banking and important
financial decisions easy
No. 1 in customer
Aspirations framework experience
Our customers are at the front
and centre in our overarching
aspiration of becoming No. 1 in
customer experience.
Trust and
strong position
in society
More insights Employee Shareholder
More details of our financial performance, market positions and corporate
engagement value
strategy can be found in our Annual Report 2018 and in our quarterly
financial fact books.
Corporate Responsibility 2018 9
A Nordic universal bank
With branches located across our core markets of
Denmark, Norway, Sweden and Finland, as well as in
Northern Ireland, Estonia, Latvia and Lithuania, we ope- Finland
rate to service our Nordic-affiliated personal, business Norway
and institutional customers. In addition, we also have
offices in several other European countries, the US,
China and Russia, as well as support functions in India.
Sweden
Our offices outside the Nordic markets offer gateways
to the rest of world for Nordic customers and points of Denmark
entry to our region for international customers whose
activities are anchored in the Nordic countries.
DANSKE BANK IN NUMBERS SERVING OUR CUSTOMERS THROUGH FIVE BUSINESS UNITS
16 Banking DK serves retail and commercial customers in Denmark. The unit offers
personal customers advice tailored to their financial needs and is a leading
countries provider of daily banking, home financing, investment and retirement planning
solutions. For business customers, the unit provides targeted advice and
237 solutions based on the size and situation of the customers’ business.
1,700,000 3,341 DKK 7.3 billion
branches
customers employees profit before tax
3.3 million Banking Nordic serves retail and commercial customers in Sweden, Norway and
Finland, providing customer offerings similar to those of Banking DK. In addition,
Customers, end-2018*
the unit includes the Group’s global asset finance activities, such as lease
activities.
20,683 1,135,000 2,442 DKK 5.6 billion
full-time employees customers employees profit before tax
DKK 1,769 billion Corporates & Institutions is the wholesale banking division of the Group, serving
the largest corporate and institutional customers. We offer our expertise in debt
loans issued and equity raising, corporate finance advisory services, risk facilitation, daily
banking, trade finance and investment services.
DKK 1,575 billion 1,815
customers
1,858
employees
DKK 4.3 billion
profit before tax
assets under management
Wealth Management serves the Group’s entire customer base through a range
DKK 44.4 billion of products and services within wealth and asset management, investments,
pension savings and insurance. This unit consists of Danica Pension, Danske
total income
Invest, Asset Management and Private Banking.
DKK 19.7 billion 64,000
customers
2,201
employees
DKK 3.2 billion
profit before tax
profit before tax
Northern Ireland is one of the leading financial institutions in its market serving
DKK 4.7 billion personal and business customers through leading digital channels and a network
of branches and business centres.
tax on profit
437,000 1,322 DKK 0,7 billion
customers employees profit before tax
9,8%
return on equity
The current business unit structure was implemented during 2018. In addition
to these business units, Danske Bank Group offers mortgage financing through
* Customers in Banking DK, Banking Realkredit Danmark, real estate brokerage through home, and leasing through
Nordic, Corporates & Institutions, Nordania Leasing.
Wealth Management (Private Banking
customers only), and Northern Ireland.
BUSINESS AND STRATEGY
Taking stock of the
2015-18 strategy
2018 has been a year of strategic transition and was the final year of our four-year Corporate
Responsibility Strategy. A key strategic focus has been to build the foundation for integrating
corporate responsibility into our core business.
Since 2015, we have worked in accord- Integrating corporate responsibility an increased focus on specific areas,
ance with our Corporate Responsibility into our core business has been a key as has been the case with the area of
Strategy. With its two strategic themes element in building the foundations that combatting financial crime. Another key
and five focus areas, the strategy exist today. Our five focus areas have objective of the strategy has been the
aimed to integrate corporate respon- been: contributing to society, fostering alignment of our strategic themes with
sibility into our core business. The two responsible customer relationships, be- the UN Sustainable Development Goals
strategic themes, Fostering financial ing a responsible employer, reducing our (SDGs), where we have focused on
confidence and Accessible finance for environmental footprint, and ensuring quality education (SDG 4) and on decent
everyone, every day, not only defined responsible supplier relationships. work and economic growth (SDG 8). A
our programme and initiatives for status for our contribution towards the
building financial confidence in the next Corporate responsibility is an ever- SDGs can be found on p. 16 and 18.
generations, in start-ups and in growth changing field where new sustainability
companies, but they also supported our issues continue to arise and mature. Building on our achievements from the
commitment to a responsible transition As well as being able to adapt to new strategy period, we are now ready to
to future financial services. developments, our Corporate Respon- move ahead and take our corporate
sibility Strategy also accommodated responsibility efforts to the next level.
Corporate Responsibility Strategy 2015–18
The Essence of Danske Bank
FOUNDATION
Our vision, strategic core, customer promise and core values
OUR ROLE Contributing to
financial stability and economic growth
STRATEGIC Fostering Accessible finance
THEMES financial confidence for everyone, every day
CORPORATE
Responsible Responsible
RESPONSIBILITY Contributing customer Responsible Environmental supplier
IN CORE to society relationships employer footprint relationships
BUSINESS
Corporate responsibility governance, policies and reportingCorporate Responsibility 2018 11
Key achievements
During the strategy period, we steadily increased our efforts to embed corporate responsibility in our core business processes, and
we launched programmes and initiatives within our strategic themes. Across the Group, we focussed on strengthening our shared
governance setup, policies and reporting. Below we highlight our areas of focus and key achievements 2015-18 – some of these
achievements can be attributed to our new Societal Impact and Sustainability Strategy, see p. 12.
Strategic themes Key achievements 2015-18
Fostering financial confidence • Educational programmes, tools and free online universes for children,
Building financial confidence in the teachers and parents
next generations as well as in growth • Pocket Money app for children
companies • Digital hubs and accelerator programmes for Nordic start-ups and social
entrepreneurs
Accessible finance for everyone, • Customised solutions for people with special requirements, including seniors
every day and the visually impaired
Ensuring a responsible transition to • MobilePay partnership for Nordic banks
future financial services • Digital solution for homeless people in partnership with the Hus Forbi
organisation
Core business area Key achievements 2015-18
Contributing to society • Tax policy to increase transparency and seek a proactive, open and cooperative
Enhancing transparency, creating relationship with the tax authorities
long-term value and local community • Stakeholder engagement principles to guide our engagement with various
engagement stakeholder groups
• Public debates and knowledge sharing on responsible growth and
financial confidence
• Partnership with ISOBRO on fundraising for charities via MobilePay
• Employee volunteering in local communities
Responsible customer relationships • Significant strengthening of sustainable investment and lending strategies,
Providing sustainable finance integrating environmental, social and governance (ESG) into core processes
solutions and strengthening our • Topic- and sector-specific position statements for investment, lending and
compliance practices procurement
• European Corporate Sustainable Bonds fund and impact investment funds on
climate and water
• Disclosure on active ownership as well as CO2 footprint of selected funds
• Supported the recommendations of the Task Force on Climate-related Financial
Disclosures
• Established centre of anti-money laundering (AML) expertise to further enhance
AML service quality and efficiency across the Group
• Annual mandatory Code of Conduct e-learning for employees
• Data security platform, Keep it safe, for customers and employees
• Extensive collaboration within and outside the financial sector on combatting
fraud
Responsible employer • Human rights risk assessment in accordance with the UN Guiding Principles on
Fostering an inclusive and diverse Business and Human Rights (UNGPs)
culture and providing a healthy and • Diversity and inclusion initiatives, including focus on gender composition
safe working environment • Core values integration in peoples practices
• Human rights guideline and statement on sexual harassment
Environmental footprint • 100% renewable electricity supply and signatory of RE100
Reducing our own carbon footprint • CO2 offsets to uphold carbon neutrality
• Danske Bank funds invested in green bonds
Responsible supplier relationships • Supplier Code of Conduct aligned with UNGPs
Developing and implementing an • Environmental requirements for selected products and services
improved responsible sourcing • Assessment of high-risk suppliers as part of responsible sourcing process
process • Audit programme for suppliersBUSINESS AND STRATEGY
Moving ahead with
new 2025 strategy
Our new Societal Impact and Sustainability Strategy is an integral part of our corporate
strategy and was launched in May 2018. Towards 2025, we will accelerate the integration
of societal impact into our business model.
We want to improve our customers’ ensure that we live up to market expec- tion & entrepreneurship, where we can
lives and make societies more prospe- tations and international principles. The generate significant societal impact by
rous and to do so in a sustainable way. four factors are: accelerating our work helping entrepreneurs to drive employ-
Our new Societal Impact & Sustaina- on sustainable finance, continuing to ment and economic growth, thereby
bility strategy is firmly embedded in run a sustainable operation, fostering contributing to SDG 8. The third theme
Danske Bank’s corporate strategy and a sustainable workplace & culture and is Financial confidence & security,
defines our 2025 ambition of driving partnering with local communities to where we can leverage our stronghold
sustainable progress and positive create value. in financial confidence, IT security and
impact in the societies that we are part fraud prevention to educate our custo-
of. We see the integration of societal im- In addition, we will apply our skills and mers, thereby contributing to SDG 4.
pact and sustainability into our business expertise within three strategic themes
model as part of our license to operate where we aim for a measurable impact To enable us to accelerate the integrati-
and as a source of value creation. on sustainable development and can on of societal impact into our business
contribute to the UN Sustainable Devel- model, we have during 2018 doubled
The Societal Impact and Sustainability opment Goals (SDGs). The first theme is the number of full-time employees wor-
Strategy outlines how we will further Climate & environment, where we see king with sustainability at both Group
embed corporate responsibility into our a significant impact potential by offering and business unit level. A continuous
core business. The strategy includes green financing and encouraging cus strengthening of our governance setup,
four foundational factors that address tomers and portfolio companies to take ongoing stakeholder dialouge and trans-
sustainable core business processes climate action, thereby contributing to parent reporting will further support our
and products and which are essential to SDG 13. The second theme is Innova- ambition to raise our standards.
Societal Impact and Sustainability Strategy 2025
The Essence of Danske Bank
AMBITION We want to drive sustainable progress and positive impact in the societies we are part of
Climate & environment Innovation & entrepreneurship Financial confidence & security
STRATEGIC THEMES
GOALS Helping society transition to a net- Helping 1,000 social Helping 5 million people and
FOR 2025 zero carbon economy through green entrepreneurs grow their positive businesses to become financially
financing impact in society confident and secure in a digital age
FOUNDATIONAL
Accelerate Run a sustainable Foster a sustainable Partner with
FACTORS
sustainable finance operation workplace & culture communitiesCorporate Responsibility 2018 13
Strategy development and
2019 outlook
Continued commitment to international principles
The Executive Board initiated the In our past and new strategy, and in associated policies, we recognise the
strategy-development process in autumn importance of international commitments aimed at helping businesses to
2017, and the strategy was signed off operate responsibly. In our Societal Impact & Sustainability Policy (October,
by the Board of Directors in May 2018. 2018), we state our support of the following:
As well as customer surveys, workshops
with employees and managers, and • 2030 Agenda and the UN Sustainable Development Goals
market analysis and benchmarking, this • The UN Global Compact
process also included an in-depth analy- • The OECD Guidelines for Multinational Enterprises
sis of Danske Bank’s sustainable finance • The UN Guiding Principles on Business and Human Rights
positions and processes. • The UN-supported Principles for Responsible Investment
• The UN Environment Programme Finance Initiative
We are in the process of conducting a • The Universal Declaration of Human Rights
comprehensive analysis of performance • The ILO Declaration of Fundamental Principles of Rights at Work
indicators (KPIs) so that we can select
the right KPIs for tracking our impact in Additional industry-specific international principles and conventions that guide
a reliable and measurable way. This is our lending, investment and procurement activities are detailed in our publicly
part of our outlook for 2019. available position statements.
Strategic themes 2019 outlook
Climate & environment • Increase volume of green lending
Developing financial products and • Issue Danske Bank green bonds
services that support the transition to a • Continued facilitation of customers’ green bond issuance
greener economy • Further implement the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations
Innovation & entrepreneurship • Further develop +impact hub with tailor-made tools and support for social
Developing tools and services to enable entrepreneurs
entrepreneurs to succeed • Continue to develop +impact Accelerator programme for social entrepreneurs
• Further develop The Hub from start-up job board to talent management platform
Financial confidence & security • Develop financial confidence tools for children and parents
Providing knowledge, education, prod- • Launch primary school programmes and activities
ucts and services to help customers be- • Implement new tools and activities to increase data security and prevent fraud
come financially and digitally confident
Foundational factors in core business 2019 outlook
Sustainable finance • Continued environmental, social and governance (ESG) education and training
Integrating ESG factors into our programmes for portfolio managers
investment and lending decisions • Strengthen our ESG integration through an improved ESG data platform and tools
to decrease risk and leverage • Implement IT-supported ESG processes and training of frontline and credit staff
opportunities
Sustainable operation • Maintain and continue to improve high standards for anti-money laundering,
Incorporating ESG considerations into counter-terrorist financing and financial sanctions
operational business practices includ- • Publish new policy on anti-corruption
ing compliance, sourcing, customer • Strengthen partnerships on data security and fraud with national and international
advice, products, tax, lobbying, accessi- law enforcement agencies and industry networks
bility and IT security • Integrate ESG considerations in product approval process
• Further strengthen ESG screening of suppliers
Sustainable workplace & culture • Increased focus on initiatives related to mental health
Providing a good physical, structural • Continue focus on hiring a diverse workforce, equal pay and increasing the
and cultural working environment for share of female leaders
our employees and limiting our CO2 • Strengthen compliance awareness among all employees
footprint • Continue to optimise energy consumption in building portfolio
Partner with communities • Launch employee volunteer programme Time to Give
Ensuring presence and positive impact • Strengthen local community engagement and stakeholder dialogue
in national and local communities • Activate local sponsorship strategyBUSINESS AND STRATEGY
A strong focus on compliance
and sustainability governance
Financial services are based on trust and there should be no doubt that complying with the
law and adhering to international principles for responsible business conduct is fundamental
to Danske Bank. Strengthening our compliance culture and our governance setup is – and will
always be – an ongoing priority for us.
Our compliance culture is supported by market standards and internal rules are ensure proper protection of employees
our core values, policies, procedures complied with across the Group, Danske who report wrongdoings. The Group
and training. The Code of Conduct Bank’s Group Compliance function does not tolerate any form of reprisals
Policy, to which all staff must adhere, also provides advice on how to mitigate against whistleblowers.
provides employees with guidance on against compliance risks.
the subject of prudent behaviour. We All employees are introduced to Danske
ensure that awareness of the code Improved whistleblower system and Bank’s whistleblower system as part
remains high at all times, which is sup- mandatory training of their annual mandatory e-learning
ported by a mandatory annual e-learning A healthy feedback culture should be training. In 2018, the number of
course for all employees. a mainstay of Danske Bank. However, whistleblower reports continued to rise
when feedback and knowledge sharing in relation to past years. We believe that
In 2018 we introduced an Escalation with colleagues and superiors are not this increase can be directly attributed
Policy to set the requirements for enough, whistleblowing plays a vital role. to our strong focus on training and on
appropriate and timely internal reporting Employees can report their concerns raising awareness.
of potentially problematic cases across anonymously if they become aware of
Danske Bank Group. This policy ensures incidents of non-compliance or wrong- Sustainability governance
that such cases are reported to the doing, such as money laundering, fraud, The Board of Directors receives an
Executive Board and reported onwards sexual harassment or other failure to update on our sustainability perfor-
to the Board of Directors. comply with applicable regulation, laws mance on an annual basis. The Board
or internal standards. approved the new Societal Impact and
The anchoring of Group Compliance Sustainability Strategy and policy in May
has been further strengthened with the Over the past few years, we have 2018 and October 2018 respectively.
introduction of direct reporting lines to strengthened our whistleblower system The policy confirms our commitment to
the CEO, and as of November 2018 the by transferring the responsibility for responsible business practices in accor
Chief Compliance Officer is a permanent investigating submitted reports to Group dance with internationally recognised
member of the Executive Board. This will Compliance. We have improved our pro- sustainability principles for environmen-
reinforce the collaboration with the busi- cesses for handling reports, and Group tal protection, human and labour rights,
ness and will integrate compliance even Compliance’s correspondence with business ethics and anti-corruption, see
further into how we do business. In addi- supervisory authorities forms part of p. 13.
tion to ensuring that all applicable laws, reporting to the Board of Directors. We
Business Integrity Committee
Board of Directors
Decision-making
Executive Board
Business Integrity Committee
Implementation
Business units and Group functionsCorporate Responsibility 2018 15
Materiality assessment 2018
Very important
Importance to stakeholders
Financial stability
& growth
Governance
Anti-money laundering
Responsible tax IT security
Anti-corruption Data protection
ESG transparency
Responsible products & fair advice
Climate change preparedness ESG in investments
Financial confidence ESG in lending
Customer
Access to financial services fraud prevention
Diversity & inclusion Supporting SMEs, entrepreneurs and start-ups
Responsible procurement Training & development of employees
Community support
Employee health and well-being
Executive remuneration
Important
Reducing own environmental footprint
Importance to business
Important Very important
Since 2014, our Business Integrity ety, we annually assess the materiality
Committee has developed and overseen of environmental, social and govern-
the implementation of our strategies ance (ESG) related topics. This report
and policies related to sustainability. Our provides details of our performance and
Interim CEO, Jesper Nielsen, chairs the mitigation of identified risks. The mate-
Business Integrity Committee, which riality assessment is based on infor-
consists of the Executive Board, the mation gathered from our most recent
CEO of Danica and the Head of Societal customer and employee surveys, from
Impact and Sustainability. The Board workshops with key internal stakehold-
convened five times in 2018 to discuss, ers, as well as from ESG rating agency
among other things, strategic KPIs, sec- surveys, which we use as a proxy for
tor exclusions as part of our sustainable investor importance.
finance activities, as well as the annual
materiality assessment. When we conducted the assessment Relevant policies
in October 2018, climate change Group policies of specific relevance
In addition to coordinating the imple- preparedness was introduced as a new to our corporate responsibility
mentation of decisions made by the topic. The assessment also showed include:
Business Integrity Committee, our Soci- that topics such as AML and ESG in
etal Impact and Sustainability function investments and lending activities have • Anti-Money Laundering (AML),
also tracks progress on the strategy and increased in perceived importance – for Counter-Terrorist Financing (CTF)
is responsible for our annual corporate us and for our stakeholders. Many of the and Sanctions Policy
responsibility reporting. topics have a human-rights dimension, • Code of Conduct Policy
and all topics in the matrix are reflected • Compliance Policy
Assessing material ESG topics in this report. • Conflict of Interest Policy
Our Societal Impact and Sustainability • Credit Policy
Strategy and associated policies and In 2019, we will develop our materiality • Diversity and Inclusion Policy
procedures address key sustainability assessment by aligning the classifica- • Escalation Policy
risks and impacts across our business. tions further with our risk framework, • Remuneration Policy
To guide our reporting and help identify and we will engage with additional inter- • Security Policy
issues that represent significant risks or nal and external stakeholders to help us • Societal Impact & Sustainability
opportunities for our business and soci- better understand their expectations. Policy
• Stakeholder Policy
• Supplier Code of Conduct
More insights • Sustainable Investment Policy
Further information on executive renumeration and how we govern our business and manage risks can • Tax Policy
be found in our Corporate Governance Report 2018 and in our Risk Management Report 2018. • Whistleblower PolicySTRATEGIC THEMES
Building financial confidence
in a cashless society
Children’s understanding of the value of money has changed fundamentally with the digitalisation
of the financial infrastructure. This poses a societal challenge, and we consider it as part of
our role to help enhance the next generation’s financial confidence and ability to navigate in a
cashless society.
Since 2007, we have been focussing on talisation of the financial infrastructure, bility Strategy, and this work is part of
the core of financial literacy by bringing children are exposed to a world where our strategic focus on UN Sustainable
financial teaching into schools and by they engage with money not as cash or Development Goal (SDG) 4 concerning
creating new platforms where children coins, but as swipes and taps. Money quality education.
can learn about finances. With the digi- has become seamless and intangible,
and a Danske Bank survey from June Our on-line universes
2018 confirms that 70% of Danish In 2018, we closed some of our finan-
parents believe digital money makes it cial literacy online universes. The former
harder for children to grasp how much Control your money website will be
money they spend. replaced by a free learning universe to
be launched in 2019. The new universe
We believe that developing financial will be an educational website that
confidence will help children to develop teachers can use to teach pupils aged
a sense of financial rights and wrongs to 10 to 15 about personal finances, the
guide them through a challenging world sharing economy and digital security.
of money. We will continue to develop Our popular Moneyville game, which
tools and educational programmes that since its launch in 2008 has had
help both parents and teachers build approximately 8 million users, is being
financial confidence and good financial updated. In Moneyville, children aged
behaviour in the next generation. This 5 to 9 can play their way to a better
ambition is in line with our new strategic understanding of how money is earned,
theme Financial confidence & security how to prioritise spending, and the
Digital pocket money in our Societal Impact and Sustaina- importance of saving.
Parents can use our Pocket Money solu-
tion as a starting point for conversations
about money with their children. Pocket
Money consists of an app, a pocket money
card for children aged 8 to 14, and a fea- Our educational programmes for schools
ture in our Mobile Banking app for parents.
The solution, which has had 24,650 users
since its launch in 2017, is available in
SMART Money in Denmark
Our programme where pupils aged 13 to 15 can receive a visit from a Danske Bank financial
Denmark, Norway, Sweden and Finland.
adviser to discuss financial assets and pitfalls and learn how to protect themselves against
Our national websites also offer inspiration
cybercrime.
and advice on pocket money.
Launch: 2015
Partners: Danish Association of Teachers of Mathematics
Outreach: 2,943 pupils participated in 2018
Money Week in Denmark
A programme where pupils aged 13 to 15 can attend a guest lecture at their school about
digital security, budgeting and personal finances given by a financial adviser from Danske Bank
or another Danish financial institution.
Launch: 2014
Partners: Finance Denmark and the Danish Association of Teachers of Mathematics
SDG 4 is about ensuring inclusive and Outreach: 327 classes and 7,728 pupils participated in 2018
equitable quality education and promoting
lifelong learning opportunities for all.
We measure our contribution to SDG SMART in Northern Ireland
4 by the number of children and young peo- Our programme delivered in the classroom by Danske Bank Youth Ambassadors. Post-primary
ple in our markets we have helped improve school pupils learn about budgeting and saving, credit and debit, buying and renting property,
their financial skills. and entrepreneurship. Primary school children are introduced to money through interactive
In 2018, more than 16,269 children activities.
and young people participated in our Launch: 2015
educational programmes – a figure that Outreach: In 2018, 40 schools and 5,455 pupils participated
exceeds our 2018 target of 12,500.Corporate Responsibility 2018 17
Accessible finance for everyone
A cashless society with digitalised financial services increases the risk of excluding vulnerable
groups from making financial transactions. It is part of our responsibility to ensure that our
services are accessible and easy to use for all customer groups.
According to the European Commis- Cash payment in Denmark – share of total expenditure 2009-2018
sion’s 2018 digital index, the Nordic
countries are the best-performing %
countries when it comes to digitisation. 30
This is a trend that is reflected in our
customers’ adoption of mobile and digi- 25
tal banking solutions as their main point
20
of contact with us. From 2015 to 2018,
we saw an increase in the number of 15
self-service eBanking transactions from
17.7 million to 50 million, and self-ser- 10
vice mobile and tablet banking trans-
actions rose from 10.8 million to 51 5
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
million. In the same period, the number
of ATM transactions decreased from 18-24 25-34 35-64 65+
43 million to 32 million. However, some
customer groups are less comforta- The number of cash payments is in decline, and we are seeing significant decreases in both the amount of
ble with digitalisation or have special cash withdrawn and the frequency of withdrawals. This is due to the increase in card payments and the use
of services such as MobilePay, which makes it easy to make person-to-person payments without using cash.
requirements, so we offer customised Today, cash payment represents only 8% of total expenditure in Denmark compared to 2009 where the share
solutions to accommodate the needs of was 15%. The most dramatic drop in cash payment is seen among young people under the age of 25, although
these customers. the use of cash by seniors has also decreased and is today in line with other age groups.
Our financial services for people with special requirements
Cash card Ordinary mail and mail payment MobilePay for the homeless
The Danske Bank cash card is aimed at Customers who have difficulties with Homeless vendors of the Hus Forbi
customers in Denmark who are unable digital communication can choose cor- magazine on the streets of Denmark
to visit branches or ATMs, have difficul- respondence by post at no extra cost. can receive payments via MobilePay
ty remembering a PIN, or need some- For a minor fee, these customers can and have this money transferred to a
one to make payments on their behalf. also send us their invoices and we will cash card that is not linked to a personal
The card, which can be used at ATMs take care of payment. bank account. In 2018, MobilePay was
and shops that accept Mastercard, has used by 396 vendors.
an easy-to-memorise PIN, a maximum
balance of DKK 7,500 and no overdraft
facility. Cash deposits
Cash can be deposited at selected Braille services
ATMs in Denmark, Norway, Finland and To help visually impaired customers,
Northern Ireland. In 2018, we estab- many ATMs in Denmark, Sweden and
Easy Banking lished 31 new deposit ATMs, bringing Northern Ireland have braille keyboards
In Denmark, customers who do not the total to 327. and synthetic speech. In Denmark, we
feel confident using digital banking can also offer monthly account statements
use our Easy Banking solution, which in braille and home deliveries of cash
is a simplified version of our eBanking once a month.
solution. The system has only three Step-by-step meetings
functions: account overview, bill pay- At Step-by-step meetings held at our
ment and transfers – including transfers local branches, senior customers in
to a cash card. Denmark can acquire basic knowledge
about our digital services and can de-
velop the skills they need to use these
services.STRATEGIC THEMES
Partnering up to support
impact start-ups
Helping companies scale their business lies at the core of our business. Using our experience
to enable purpose-driven start-ups increase their impact on society is a natural extension of
our ambition to support the UN Sustainable Development Goals.
Since 2015, we have been engaging The +impact hub is the first step in a Development Goals (SDGs) and that
with partners in a collaborative effort wider initiative seeking to help pur- have the potential to scale and acceler-
to help start-ups grow their businesses. pose-driven start-ups increase their ate sustainability – also from a business
Experience from our digital platform, impact on society in line with our new perspective.
The Hub, show that focusing on the strategic theme Innovation & Entre-
ecosystem for entrepreneurs is worth- preneurship in our Societal Impact and The Nordic impact start-up scene is
while, and in May 2018, we launched Sustainability Strategy. The +impact hub growing fast and many companies are
a new Nordic digital hub named focuses on companies that address already making a difference. Our hope
+impact. one or more of the UN Sustainable is that the Nordic countries can be-
Key challenges for
impact start-ups
Our experiences with
The Hub points to
Access to recruitment and access
to capital and best prac-
emerging markets
tice tools as the main
35% scalability challenges for
growth companies.
Hard to find However, we have
business model Need for funding identified a number of
70% 92% key challenges specific
Specific to purpose-driven start-
business- ups. Besides funding,
related these start-ups not only
need access to mentors
issues
and experts, but they
also need an ecosystem
of interacting busi-
Need for awareness Access to mentors nesses. Motivated by
SDG 8 is about promoting sustained, & ecosystem & experts the ambitions to solve
inclusive and sustainable economic growth,
full and productive employment and decent
87% 87% a problem in society
rather than by purely
work for all. commercial goals, some
We measure our contribution to SDG 8 by Lack of also struggle to find the
the number of jobs posted on The Hub and business skills right way of turning their
the number of applications.
With 171,379 applications for 13,194
57% ideas into a sustainable
business.
jobs posted, we exceeded our 2018 targets
of 80,000 applications for 9,000 jobs.Corporate Responsibility 2018 19
come a centre for entrepreneurs who Our initiatives to help start-ups to scale
drive sustainable development, and
together with likeminded partners, we The Hub
can help facilitate that development. Our free, digital community platform tailored to the needs of growth start-ups. As well as
Our work to support start-ups grow receiving assistance with their recruitment of talent and connecting with investors, these
their business and contribute to start-ups also gain access to best-practice tools such as employment contract and pitch deck.
sustainable development in the Nordic Launch: Denmark in 2015, Norway, Sweden and Finland in 2016, and the UK in 2018
countries and beyond is part of our stra- Partners: Rainmaking in Denmark, Nordic Impact in Norway, SingularityU in Sweden,
tegic focus on SDG 8 on decent work Maria 0-1 in Finland and Catalyst Inch in UK
and economic growth. Outreach: 5,000+ start-ups, 12,000+ jobs, 120,000+ job applications since 2015
+impact accelerator programme
Building on the +impact hub, we Danske Bank Growth
Our Centre of Excellence for start-ups and growth companies with advisers specialised in
launched a 10-week free-of-charge understanding the start-ups and their business models and in guiding the young growth
accelerator pilot programme in October companies on their journey.
2018 together with the Norwegian Launch: September 2016
company Katapult. Nine early-stage Partners: Accountants, lawyers, co-working spaces and investors
Nordic start-ups whose products are Outreach: 50+ advisers across our business and market areas
designed to help solve environmental
or social issues were handpicked for
the programme. All nine start-ups were +impact
offered a temporary base at SingularityU Our free, cross-Nordic digital platform, where purpose-driven start-ups can share their chal-
lenges with and receive advice from expert volunteers from organisations such as Boston
in Copenhagen, and through mentoring,
Consulting Group, Implement, E&Y, PA Consulting, IBM and Danske Bank.
training and networking, the programme Launch: May 2018
helped them fine-tune their business Partners: Strategic partnership with Rainmaking in Denmark
models and prepare them for the Outreach: 40+ Nordic start-ups in 2018
stakeholders at the next stages of
growth. In 2019, we will evaluate the
pilot and decide how best to build
upon what we learned from the pro-
gramme.
Supporting female entrepreneurship
In 2018, we continued a number of In Norway, about 1,000 women partici- China. More than 100 women attended
activities to support female entrepre- pated at two SHE FUTURE Conferences, the conference.
neurship. Although the Nordic societies where the focus was on diversity, tech
are focusing on gender equality, we still and female potential. We sponsored In collaboration with nHack, we also
have a long way to go when it comes to and co-organised both conferences and gave presentations and moderated
unleashing the hidden potential and to held a pitching contest, sourced through investor panels in Shanghai where the
providing the same opportunities to all. The Hub, and awarded a Danske Bank focus was on diversity, tech and female
Sillicon Valley Prize. potential.
In Sweden, we sponsored and co-organ-
ised the Femtech Hackathon in partner- In Denmark, we arranged and hosted a Lastly, we hosted three informal Female
ship with Startup Weekend SingularityU similar conference, Unleash Female Po- Founder breakfast events in Denmark,
and Norrsken. A total of 50 women tential event, in partnership with DIF and at which women who have founded their
participated and had the opportunity to PwC. Here, the winner of the pitching own companies shared their stories
network, team up and create business contest received a Danske China and with the 80 participants.
ideas. nHack prize that included a study trip to
To articulate our focus, profile our
activities and receive feedback, we have
been active at a number of events for
start-ups across the Nordic countries
throughout 2018. These events
included: in Norway, KatapultFuture Fest,
SHE conference and Oslo Innovation
Week; in Denmark, TechBBQ, Tech
Festival and Global Entreprenuership
Week; in Sweden, SingularityUNordic
Summit; and in Finland, Slush and
GreenTechChallenge Day.You can also read
