Responsibilities for the economy, society and environment

Information checkedInformation unaudited Information geprüft Information ungeprüft Responsibilities for the economy, society and environment

As a financial institution with a long-term orientation, the LLB Group is committed to leaving an environment that is as intact as possible and stable social conditions for the coming generations. With our new corporate strategy and even more ambitious goals, we are proceeding resolutely down this path.

Performance mandate and sustainability

As the oldest bank in Liechtenstein and steeped in tradition, LLBunderstands the special responsibility it has for taking a long-term approach. Sustainable business management is part of its performance mandate and its corporate identity. We have a legal obligation to our majority shareholder, the Principality of Liechtenstein, to promote Liechtenstein’s economic development while at the same time taking ethical and environmental factors into account. We fulfil this special obligation by offering a diverse portfolio of products and services, applying sustainable standards to our offerings, our infrastructure and procurement, and engaging broadly in society.

Sustainability as a strategic goal

Sustainability is an integral part of our DNA. With our new ACT-26 corporate strategy, we are going a step further: the LLB Group wants to play a pioneering role in the future. Sustainability is one of our three strategic core elements (see chapter “ACT-26”).

Sustainability with high ambitions as part of the strategy

Our aim with this strategy is to be perceived as a bank that is stable, sustainable and innovative. And we also want to clearly differentiate ourselves from our competitors through it.

Goals of the sustainability strategy

We have set ourselves the goal of reducing the net CO₂ emissions of the LLB Group to zero by 2040 – in line with the UN’s ambitious target to limit global warming to 1.5°C.

“We feel certain that the global financial industry will play an important role in the transition to a climate-friendly economy. This is why, in future, we want to play a pioneering role in terms of sustainability and why we have set ambitious goals for ourselves.”

Banking operations

As a first partial step in this direction, the LLB Group became climate neutral in the reporting year by fully offsetting its CO₂ emissions. In cooperation with the Swiss climate foundation “myclimate”, we support various CO₂-reducing projects in the region and around the world. Among these is a reforestation initiative in western Uganda and a project for fertile soil as a CO₂ sink in the Lake Constance region.

At the same time, we have initiated measures to ensure that emissions in our banking operations are net zero by 2040.

Bank products

In addition to adapting its day-to-day operations, the LLB Group also wants to support its clients on the way to climate neutrality – with expert advisory services and differentiated, sustainable products. Specifically, the Group has set itself here, too, the goal of reducing the CO₂ emissions of all bank products to net zero by 2040. This would mean the LLB Group becoming completely climate neutral across its day-to-day operations and bank products ten years earlier than defined in the Paris climate agreement.

Adapting our offerings is a key factor in achieving the targets that we have set for ourselves. Consequently, the LLB Group has greatly expanded its range of sustainable investment products in the reporting year. In addition to its well-established asset management and investment advice services, it also offers a comprehensive selection of sustainable funds. Liechtenstein’s first-ever sustainable gold fund, launched by LLB AG, surpassed the USD 100 million mark in 2021 within a matter of just months. Further products are being planned or are about to be launched.

The LLB Group is convinced that sustainability is not only indispensable for preserving an intact environment and society, but is also increasingly becoming a decisive competitive factor.

Transparency

We have used the Global Reporting Initiative (GRI) Standards as the framework for our sustainability reporting for many years. In summer 2022, we will also be publishing a report based on the standards of the Task Force on Climate-related Financial Disclosures (TCFD) for the first time. It will provide transparent information on the progress that we have made in implementing our climate goals.

Membership of international climate initiatives

We reaffirm our commitment to sustainability and climate protection through membership in the most important international climate initiatives:

• The United Nations Net-Zero Banking Alliance: The LLB Group has been a member of the United Nations Net-Zero Banking Alliance (NZBA) since August 2021. Its aim is to eliminate the most carbon-intensive sectors from the credit and investment portfolios.
• Race to Zero: With its membership in the NZBA, the LLB Group is also part of the Race to Zero campaign – an initiative launched by the United Nations. The campaign brings together state and non-state actors from more than 90 nations. They recognise the importance and the urgency of working towards a decarbonised economy in order to create a healthier, safer, cleaner and more resilient world for future generations.
• Principles for Responsible Banking: We also became a signatory to the United Nations Principles for Responsible Banking (PRB) in the reporting year. The PRB is an initiative for responsible banking and provides a single framework for a sustainable banking industry. It was developed as part of an innovative partnership between banks around the world and the Finance Initiative of the United Nations Environment Programme.
• The Climate Pledge: The Climate Pledge is a voluntary commitment to implement the Paris climate agreement ten years earlier and be CO₂ neutral by 2040. The LLB Group has been an official partner since March 2022.
• Principles for Responsible Investment: The LLB Group has been a member of the Principles for Responsible Investment (PRI) Finance Initiative since 2020. As such, it supports the responsible management of securities.
• Climate foundations: LLB is a partner of the independent non-profit LIFE Climate Foundation Liechtenstein (since 2009) and the Swiss Climate Foundation (since 2012). It thus belongs to a group of partner firms that pool their resources to provide uncomplicated, efficient support to small and medium-sized enterprises (SMEs) in Switzerland and Liechtenstein that contribute to climate protection. LLB refunds of CO₂ contributions from Liechtenstein made to the Climate Foundation are used to promote climate-friendly products and technological developments as well as energy-saving projects.

Social and corporate governance

Sustainability encompasses not only the environmental, but also the social and governance aspects. We are committed at the LLB Group to value-oriented management and transparent corporate governance. Through the LLB Future Foundation, we have been supporting non-profit projects in the region since 2011. On the occasion of the 10th anniversary of the Foundation, the Board of Trustees decided to present a new award, the Future Prize, for excellent sustainability commitment every two years (see chapter “Industry initiatives and corporate citizenship”).

Governance

From the 2022 business year onwards, a so-called Sustainability Council is responsible within the LLB Group for coordinating its ambitious goals. It ensures the implementation of our sustainability strategy and makes adjustments where necessary. The Council has five permanent members and is chaired by the Group CEO. The operational implementation of the various sustainability topics, such as banking operations, social responsibility and ESG management with respect to investment advice, falls under the responsibility of the respective workstreams.

Sustainability Governance of the LLB Group

Green teams

The LLB Group takes a top-down and bottom-up approach to sustainability issues. In addition to having the Board of Directors as the highest governance body and making sustainability a top priority at the Group Executive Board level, we formed in 2021 so-called green teams and assigned them to the workstream of the Sustainability Officer. In these teams, employees can contribute their own ideas and take on project responsibility during regular working hours, thereby helping to actively shape the sustainable future of the LLB Group. We want in this way to tap into the creativity of each individual in order to find innovative solutions that would not be found otherwise through a top-down only approach.

Regulations

Financial institutions are facing a host of sustainability-related regulations driven primarily by the EU Commission, the overarching aims of which are to slow down global warming and comply with social standards. In order to achieve these, global capital flows are being redirected towards more sustainable investments. The LLB Group is following developments closely and making the necessary adjustments in its areas of activity (see chapter “Values and corporate management”).

Further development of staff competences

Our employees are an important factor for the success of our sustainability strategy. We offer them appropriate training or professional education so as to stay up to date with changing regulatory requirements as well as with our growing number of sustainable products (see chapters “Employees” and “Sustainability in banking”).