Due to both increasing extreme weather incidents as well as the changing technology, regulatory framework and customer demand, the business environment is changing. Exposed to a possible climate related risk, our customers need to make smaller or larger changes to their operations and business models. People need to change their lifestyle, ways of working and consuming. If not adapting, they might face increasing costs and revenue decrease consequences, for some of them leading eventually to the existential challenges.  
It is our objective to walk on this journey together with our customers and ensure that those, who are exposed to high climate, social or governance risks have a plan and a strategy in place to ensure their resilience. 

• Sustainability policy: We have a Sustainability Policy in place that ensures the achievement of our ESG strategic aspirations
• Exclusion list: We have defined our exclusion list in our Sustainability Policy.
• Requirements for our vendors and suppliers: In all our contracts, we include our Third Party Code of Conduct that require the Third Parties to have a written environmental policy and environmental management system, if required by applicable regulations, that is appropriate to the size, nature and risks of the Third Party’s operations; we require them to implement an effective system to identify and minimize potential hazards to the environment.  
• Transformation to low carbon economy
  
  Measuring emissions: We joined Partnership for Carbon Accounting Financials (PCAF) on 28.07.2021 and have implemented the accounting standard for GHG accounting of our financed projects´ and investments´ emissions. We expect to be able to disclose our emissions on Scope 1 (direct fuel use and waste generation), Scope 2 (electricity and heating use) and Scope 3 (influenced emissions such as supply chain emissions, business travel, employee commuting and our financed projects´ and investments´ emissions) in Q1 2022. 
  
  EU taxonomy: We are implementing EU taxonomy reporting and aim to disclose our EU taxonomy eligible portfolio in line with the regulatory expectations in the scope of our annual reporting.
  
  Sustainable finance: We are determined to build a green product portfolio to support the transition to low carbon economy. Currently, we offer leasing for low emission cars, sustainable pillar 2 and 3 pension funds: Pension fund Luminor Sustainable Future Index and sustainable exchange traded funds (ETFs) with morning star sustainability rating through our Luminor Investor platform. We are building sustainable investment services and products that support sustainable development of businesses and incentivize homeowners to invest in energy efficient housing.
  
  Environmental risk assessment: We perform an environmental and social impact assessment on the total consequences of large scale high environmental impact projects and customers.
  
  Sector strategies: We are analyzing the industry segments, where we have high climate and/or social risk exposure to the clients and are developing sector specific strategies that outline the key risks per sector and the mitigation actions that we would expect our customers to undertake. Furthermore, we are developing a series of seminars with a partner to build climate risk and transition related knowledge among our customers.    

• Our ESG Credit Risk Assessment procedure covers the human rights due diligence questions for our large corporate customers and lending projects. We are developing a Due Diligence Policy and reviewing our KYC process to ensure human rights due diligence of all our corporate customers as well as vendors and suppliers.  
• We require our Third Parties to confirm that they comply with our code of responsible business conduct (Third Party Code of Conduct). We take responsibility for the impact inflicted on society and the environment as a result of our business activities, and we expect our Third Parties to do the same. Our Third Party Code of Conduct outlines Luminor principles on responsible business conduct. The Code follows guidance provided by international standard-setters such as the OECD Guidelines for multinational enterprises, the United Nations Global Compact, the United Nations Guiding Principles on Business and Human Rights and the ILO (International Labor Organization) Tripartite Declaration of Principles concerning Multinational Enterprises on Social Policy.

We ensure gender-sensitive zero tolerance policy commitment towards all forms of gender-based discrimination in employment and occupation, including psychological harm and verbal, physical and sexual harassment.

• This is supported by our Remuneration Policy and Base Salary Management Standard and internal processes, our recruitment and development practices and processes.
• All our policies and processes are gender neutral.
• We do our best to ensure health and safety for employees, clients and visitors. All internal and local regulations are ensured, including as described in the ILO conventions and the MNE Declaration. 
• We require our third parties to ensure fair employment practices:
  
  Discrimination: The Third Party shall ensure fair treatment of employees.
  
  Freedom of Association: The Third Party shall respect the right of the Third Party’s employees to establish, join trade unions, and any other association of their choice.
  
  Prohibited Labour: The Third Party shall ensure that no forced labor or child labor is used.
  
  Working Conditions: The Third Party shall ensure that working conditions, hours and voluntary overtime are in accordance with the local regulation and industry practice, and that remuneration and benefits meet legally mandated minimums without unauthorized deductions.
  
  Health and Safety: The Third Party shall ensure a safe and healthy workplace for all employees, which is appropriately documented and implemented considering the  size, nature, and risks of the Third Party’s operations.

We are determined to fight financial crime, such as tax evasion or money laundering and to prevent financing of terrorism, breach or evasion of international sanctions and proliferation of weapons of mass destruction through any of our products, services or channels. To that end, we carefully follow area-specific legislation of our operating countries – Estonia, Latvia and Lithuania, as well as international best practices and have adopted policies to ensure that we:

• Remain constantly alert to the risks we face in these areas and take proportionate and effective measures to mitigate them.
• Know our customers and their beneficial owners properly and understand the purpose and intended nature of our business relationships.
• Implement any international financial sanctions imposed by the United Nations, the European Union, Estonia, Latvia, Lithuania, Sweden, Norway, the United States or the United Kingdom without delay.
• Participate in exchange of financial information within frameworks of US Foreign Account Tax Compliance Act (FATCA) and OECD Common Reporting Standard (CRS).
• We find unacceptable offering, promising, giving and requiring, either directly or indirectly, bribes and other undue advantages in order to acquire and to maintain assignments and other undue advantages.
• We do not involve ourselves in business relationships, which directly or indirectly enable bribery and corruption.
• Luminor enters arrangements with business partners that share the same values and principles on prevention of bribery and corruption. We expect that our business partners apply the same principles of responsible business conduct as Luminor, which are defined in Luminor’s Third Party´s confirmation to the code of responsible business conduct.
  
  We expect that our third parties shall act in an ethical, fair, and professional manner in all contact with Luminor.
  
  We expect that our third parties shall comply with all applicable laws and regulations concerning anti-bribery, anti-corruption, fraud, and any other prohibited business practices.
  
  We expect that our third parties confirm to comply with applicable laws and regulations concerning bribery, corruption, fraud and any other prohibited business practices.
   
• We have mandatory trainings for all employees about anti money laundering, financial crime, corruption, gifts and events. We have set up a gifts and events registry and we have practical principles in place to receive notifications from law enforcement agencies if a suspicion arises that any of our local Baltic employees is guilty of corruption.  
• We do not support tax evasion and have integrated tax as part of our exclusion list in our Sustainability Policy.  

Further information on combating money laundering and terrorism financing can be found here.

• Customer privacy and data security
• Complaints and feedback handling