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AIB ramps up its green lending to economy by two-thirds

The bank has also set a net zero target for its overall financed emissions excluding agriculture by 2040

Dr Lisa O’Donoghue, chief executive and founder of Votechnik: 'Around 200 million TVs are sold worldwide every year and they typically only last about six years.'

Thu Mar 23 2023 - 05:00

AIB’s 2022 Sustainability Report has revealed an increase of 65 per cent in the bank’s green lending to the Irish economy, bringing it to €3.3 billion during the year. Green lending now comprises 26 per cent of overall new lending for the group. That includes green mortgages, which accounted for 28 per cent of AIB’s mortgage lending in Ireland in 2022.

“The International Monetary Fund has estimated it will cost as much as €20 billion a year to fund Ireland’s transition to a zero-carbon economy by 2030,” says AIB chief sustainability and corporate affairs officer Mary Whitelaw.

Personally, as a scientist in the field, I find this an incredibly exciting time to be able to work and contribute in such a positive way to create a clean future

“Given the scale of the financing required, banks have a key role to play in meeting this funding challenge. We have a clear ambition for 70 per cent of our new lending to be green or transition by 2030. As Ireland’s largest financial services provider with 3.2 million customers, AIB seeks to be a driving force for the sustainability agenda in Ireland, supporting customers and communities to make the transition to a low carbon economy.”

According to Whitelaw, the bank has also set a net zero target for its overall financed emissions excluding agriculture by 2040. When agriculture is included, the target will be reached by 2050 in alignment with the Government’s Climate Action Plan 2021.

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She explains that financed emissions targets help the bank to understand the existing emissions profile of key portfolios, the trajectory over the short, medium and long term that is required to achieve net zero, and the key actions required to reduce the emissions associated with these portfolios.

“AIB is playing a significant role in helping the Government and the European Union meet their carbon reduction targets,” she adds. “This commitment is unique in the Irish market. We believe climate change poses a systemic challenge to long-term sustainability and we have positioned climate action as our most urgent responsibility.

We have a clear ambition for 70 per cent of our new lending to be green or transition by 2030

“We also have a target of becoming net zero in our own operations by 2030 and we are on track to deliver this. In 2022 we announced a Corporate Power Purchase Agreement (CPPA) with NTR plc to source energy generated from two solar farms that NTR will construct in Co Wexford for our operations. Our scope 1 and 2 emissions have reduced by 40 per cent since 2019 and were down 10 per cent in 2022.”

In practical terms, AIB is making attractively priced finance available across its full product suite to enable customers make greener choices at home and at work. “For example, we partnered with the SBCI to launch our Energy Efficiency Loan scheme, making €70 million available to help eligible SMEs and farmers cut their energy bills and reduce their carbon emissions by investing in energy-saving measures,” says Whitelaw.

One company to benefit from green finance from AIB is County Limerick based Votechnik. The company has developed state of the art robotic depolluting technology to remove hazardous materials from TVs and PC monitors and their LCD screens. The technology uniquely allows LCDs to be recycled ten times faster than by hand, lowering cost and improving returns for recyclers.

AIB is making attractively priced finance available across its full product suite to enable customers make greener choices at home and at work

“Around 200 million TVs are sold worldwide every year and they typically only last about six years,” says Dr Lisa O’Donoghue, CEO and founder of Votechnik. “These cannot be recycled until they are depolluted. Our robotic machine will depollute these screens at a rate of approximately 60 per hour, compared to approximately five or six per hour by hand. Our technology is an enabler for the circular economy; the TVs are depolluted, and the depolluted materials are recycled for other uses. This is the alchemy of our times.”

Businesses need to be more sustainable and manage the waste they generate, she continues. “This represents a massive opportunity. No one was really concerned about it in the past but the shift in economics and politics is creating new technologies and new opportunities for businesses. Personally, as a scientist in the field, I find this an incredibly exciting time to be able to work and contribute in such a positive way to create a clean future.

“AIB assisted us in financing the deployment and export of our technology. Our relationship manager Albert Bennett worked with us through the ups and downs of the process and practically felt like one of our team, believing in us and our vision. This made all the difference to us.”

Whitelaw explains that AIB’s experience is that the more sustainable lending of this nature that it does, the more capital it can attract to finance such investment. “The €750 million raised from the issuance of our fourth green bond in November 2022 brought to €3.25 billion the total amount raised in green bonds to date – and €1.5 billion in 2022 alone,” she says.

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