Corporate environmental and climate protection

Information unaudited Information ungeprüft Corporate environmental and climate protection

As a responsibly operating company, it is important to us to contribute to environmental and climate protection and to the conservation of natural resources. As such, we aim to fulfil our responsibility by monitoring CO₂ emissions in our own operational locations and by managing climate risks effectively.

Effective climate management

The LLB Group has the biggest impact on the environment and services through its bank products and services (see chapter Environmental and social responsibility in banking). Nevertheless, we see it as our duty to become greener in our banking operations too and make an active contribution to protecting the environment and mitigating climate change. Thus we are setting a good example and laying firm foundations for discussions with our clients, who are facing similar challenges.

We have identified our CO₂ emissions as the primary source of our negative impact. By measuring these regularly and managing them effectively, we not only minimise the effect that we would have on the climate by releasing additional greenhouse gases into the atmosphere, we also protect our business operations from damage (e.g. with regard to the tougher climate legislation that is in the pipeline) and thus safeguard our services for all of our stakeholders.

This is why we take numerous measures to lower CO₂ emissions within the LLB Group. These include using regenerative energy sources, installing photovoltaic systems, increasing energy efficiency and promoting economical use of resources. We offset any emissions that we are unable to reduce by purchasing climate certificates. We aim to achieve complete climate neutrality, i.e. net zero CO₂ emissions, both in our banking operations and with our products by 2040. In respect of the former, we have set ourselves the interim target of reducing our emissions by at least 20 per cent by 2026 compared to 2019.

Transparent reporting

The LLB Group is committed to open and transparent reporting on its climate management efforts. Our CO₂ emissions are our most important key performance indicator in this regard as they provide us with information on the negative impact that we are having on the environment and what risks this poses to the LLB Group. For this reason, we have recorded our CO₂ emissions in all three dimensions specified in the Greenhouse Gas Protocol (GHG Protocol) since 2022:

• Scope 1 includes all direct emissions caused by combustion.
• Scope 2 includes emissions caused by purchased energy (electricity, district heating).
• Scope 3 includes emissions caused by purchased inputs, third-party services or one’s own products and services.

In this report, we focus on the categories relevant to us – 1, 2 and 3.1 to 3.7 – to calculate our CO₂ footprint. Specifically, these Scope 3 categories are “Purchased goods and services”, “Capital goods”, “Fuel and energy-related activities”, “Upstream transportation and distribution”, “Waste generated in operations”, “Business travel” and “Employee commuting”.

Also of particular relevance to banks is Scope 3.15 (“Investments”), which covers emissions generated by our bank products, services and own investments. More information on these Scope 3.15 “financed emissions” can be found in the chapter Environmental and social responsibility in banking.

Development of CO₂ emissions

The LLB Group generated total CO₂ emissions of 3ʼ467.3 t in 2023, up slightly on the previous year (3ʼ451.1 t). This increase has much to do with the LLB Group’s growth trajectory: the reporting year saw some 100 new staff taken on (full-time equivalents (FTEs); see chapter Employees) and the groundwork laid for opening the new offices in Germany. This pushed up CO₂ emissions linked to transport and catering. IT lifecycle measures also contributed to the rise in these emissions.

CO₂ emissions have fallen by some 23 per cent compared to the baseline year of 2019, meaning that we met our interim target of a 20 per cent reduction during the reporting year – i.e. ahead of schedule. As we switch our sustainability reporting to the European Sustainability Reporting Standards (ESRS), however, we will be reassessing our emissions, which may result in restatements.

At 72 per cent, the vast majority of our emissions in 2023 were attributable to LLB AG and its subsidiaries in Liechtenstein, with LLB Österreich and LLB Schweiz roughly splitting the other 28 per cent between them. As expected, Scope 3 emissions (categories 3.1 to 3.7) exceeded Scope 1 and 2 CO₂ emissions several times over in 2023.

Mobility is the biggest driver of emissions in the LLB Group’s banking operations and accounted for about two thirds of total CO₂ emissions in 2023. Commuting by employees accounted for about 56 per cent and business trips for about 12 per cent of these emissions. While LLB AG and its subsidiaries in Liechtenstein produce an average of 2.9 t CO₂ per employee (FTE), LLB Schweiz and LLB Österreich generate 3.1 t CO₂ and 2.2 t CO₂ respectively.

Action taken to cut CO₂ emissions

A number of measures have helped bring about a positive long-term trend in our CO₂ emissions, most notably the corporate mobility management and energy management being pursued by the LLB Group.

Corporate mobility management

The LLB Group is committed to keeping the environmental pollution caused by business and commuter traffic as low as possible. To this end, we have had a corporate mobility management scheme in place for several years now that is geared primarily towards encouraging eco-friendly commuting. During the reporting year, the Group Executive Board agreed on an enhancement to the mobility concept, which will take effect at the start of 2024. This “mobility management 2.0” will create even more incentives for climate-friendly mobility. At our locations in Liechtenstein, we have significantly increased our subsidies for using public transport and the bonuses that we pay staff who choose not to take up a parking space. By contrast, we apply a two-tier system of parking charges, which depend on the length of an employee’s commute. Discounts are available for electric cars and plug-in hybrids.

We have installed nine electric charging points in all at six locations in Liechtenstein. They are primarily intended for staff but can also be used by our clients. We promote the use of non-motorised transport by providing changing facilities and showers with towel services as well as company bicycles. We also contribute CHF 50 towards the purchase of a bicycle helmet and motivate our employees to take part in the “Radfahren für Ihre Gesundheit” (Cycling for your health) competition run by the Liechtenstein Ministry of Infrastructure and Justice as well as that organised by the Liechtenstein Chamber of Commerce and Industry (LCCI) entitled “Mit dem Rad zur Arbeit” (Cycling to work). Out of all LLB employees in Liechtenstein, 370 (2022: 365) now come to work by bus, bike or on foot; this corresponds to 44 per cent.

In addition, our expenses regulations set out measures for business trips that also apply to LLB Österreich. For instance, staff travelling to social events and internal meetings are expected to use mainly public transport. Thanks to the extremely extensive network operated by Wiener Linien, the level of CO₂ emissions attributable to commuters at LLB Österreich is much lower than at the Group’s other locations. The bank has covered the cost of annual season tickets for public transport since September 2023 in order to make using it an even more attractive proposition.

LLB Schweiz is currently weighing up changes to its own mobility management. Most of its employees likewise walk or take public transport to work.

Climate-conscious energy supply

The organisational unit Facility Management identifies potential energy savings and evaluates the outcome of efficiency measures. Again in 2023, efforts were made to increase the efficacy of the facilities where possible. The projects implemented or planned include:

• Introducing target temperature ranges for heating and cooling office buildings;
• Gradually switching the LLB vehicle fleet over to electric cars;
• A concept for introducing double-sided printing as standard in a way that maintains compatibility with pre-printed stationery;
• Drawing up a code of conduct for suppliers, which must be signed by all suppliers above a certain purchasing volume and which commits them to protecting the environment, mitigating climate change and upholding social and corporate governance standards:

Total energy consumption in the LLB Group fell by 12 per cent to 5ʼ100.2 MWh (2022: 5ʼ806.4 MWh).

LLB is anticipating further savings on the back of the action taken in response to the power shortages in winter 2022/23. The parent bank managed to reduce its electricity consumption by 14.3 per cent, or 460ʼ076 kWh, in the reporting year compared to 2022. LLB AG and LLB Österreich have already completely switched over to green electricity; at 92 per cent, LLB Schweiz has largely completed its switchover. We have also started operating a photovoltaic system at our locations in Uznach and Eschen and two in Vaduz and will be fitting a solar facade in Eschen in 2024.

The LLB buildings that used natural gas were fully switched to biogas from 1 July 2022, a move that had been taken at LLB Schweiz as long ago as 2021. Gas consumption at LLB in Liechtenstein was reduced by 12.7 per cent in 2023 compared to 2022 levels.

Climate-neutral banking operations

The LLB Group’s banking operations have been certified as climate-neutral by Swiss climate foundation “myclimate” since 2021. Amongst other things, this is achieved by purchasing climate certificates. Here, we solely finance environmental-protection projects where carbon dioxide is absorbed from the atmosphere (“carbon-removal projects”; see chapter Our understanding of sustainability). Going forward, our aim is to reduce the amount of offsetting that we do in favour of reducing our CO₂ emissions.

Developments on the international stage are likely to redefine how climate-neutrality is measured in banking operations in 2024. For example, offsetting measures will only be deemed to reduce emissions if the country in which the measures are based waives its entitlement to count them towards its own reduction targets (specifically, its Nationally Determined Contributions under the Paris climate agreement). A voluntary waiver of this kind is likely to be the exception rather than the rule in the short to medium term. The new eligibility rules will do nothing to change the fact that the projects supported by the LLB Group have a positive impact on the environment and society by removing CO₂ from the atmosphere while making the planet a better place for people and animals to live on.

Climate risk management

The LLB Group’s risk management process ensures that climate risks are appropriately identified, assessed, managed and monitored. The risk strategy aligned with our climate goals provides the framework for this and helps us to promote the transition to a low-emission economy and society. At the same time, we are making our business strategy more resilient to climate risks (see chapter Risk management).

Key figures on corporate environmental and climate protection

The LLB’s total energy consumption and greenhouse gas emissions (Scopes 1, 2 and 3.1 to 3.7) are shown below. The following gases were included in the calculation of CO₂ emissions:

• Carbon dioxide (CO₂)
• Methane (CH₄)
• Nitrous oxide (N₂O)
• Hydrofluorocarbons (HFCs)
• Perfluorocarbons (PFCs)
• Sulphur hexafluoride (SF₆)
• Nitrogen trifluoride (NF₃)

We used the database ecoinvent 3.6 as the source for the emissions factors and based our calculations on the IPCC’s 2013 methodology, which determines greenhouse gas potential over a 100-year period. The calculation covers all LLB Group companies, consolidated following the “operational control” principle.

We updated the basis for our calculations in light of new scientific findings as part of a data quality management process. Compared to the figures in the TCFD Report 2022 and Sustainability Report 2022, therefore, there have been a number of slight restatements to the figures for the 2021 and 2022 reporting years as well as to the baseline year of 2019.

Energy consumption and greenhouse gas emissions of the LLB Group