Opinion: Scandals underscore the need to hold Danish financial sector to account

Q & A with Jeppe Bo Rasmussen, Oxfam IBIS Denmark

As public pressure for a responsible financial sector grows, Jeppe Bo Rasmussen believes that ethics and sustainability must become a competitive factor in the Danish banking sector - and that the way to achieve it is with a Fair Finance Guide in Denmark.

Q: Has Denmark been affected by banking scandals?

A: Yes for sure. Several scandals in recent years have implicated the largest Danish banks  - such as Danske Bank, Nordea and Jyske Bank – in the use of tax havens and money laundering. There are now new revelations coming to light about possible illegal debt collection linked to Danske Bank. Taken together these revelations highlight the lack of transparency and the poor standards of responsible practice found across the Danish financial sector.  

Q: Are Danish consumers demanding change?

A: The public are now calling for political action on this issue. The banking scandals have made it clear that it is almost impossible for a public consumer to access information on whether a Danish bank or pension fund has sustainable investment policies and is operating responsibly. Evidence shows that ordinary Danish consumers are unwittingly investing in companies linked to harmful and controversial issues including weapons trade, fossil fuel exploration, deforestation, corruption and human rights violations.

A recent Danish Consumer Council survey on ethical banking practices found that 63% of those surveyed would switch to a bank with stronger ethics and higher standards even if it cost them to do so. Clearly, the average Danish consumer is willing to take concrete action to ensure a responsible finance sector.

However, the same survey shows that 3 out of 4 Danish consumers do not believe they have enough knowledge and insight to assess the ethical behavior of their banks. And, almost as many of those surveyed want greater transparency so they can access this information.

Recently almost 10.000 people signed a petition calling for the creation of a Fair Finance Guide in Denmark. The Fair Finance Guide assesses, monitors and benchmarks financial institutions’ policies and practices on a range of sustainability criteria from corruption to climate change. This information is made publicly available to advocate for change across the financial sector, and give the public the information and evidence they need to critically compare their own bank’s policies with those of other banks, and to address their bank on its shortcomings in line with the UN’s Sustainable Development Goals.

In neighbouring Sweden and Norway we see how the Fair Finance Guide is driving a “race to the top” – helping to strengthen the commitment of banks and financial institutions to social, environmental and human rights standards. Danish consumers want to see the same here.

Q: So what’s next?

A: The Danish Consumer Council and Oxfam IBIS, in partnership with Fair Finance International, are calling for the establishment of a Fair Finance Guide in Denmark.

Already operating in ten countries, the Fair Finance Guide has proven successful in achieving improvements in transparency, accountability and responsible banking practices. In the first half of 2020 alone, Fair Finance Guides in Norway, Brazil, Belgium, the Netherlands, Germany and Sweden reached nearly 1.5 million citizens, and mobilized over 10,000 citizens to send complaints and compliments to their financial institutions.

Q: Will the Danish public welcome a ‘race to the top’?

A: Definitely! Recent banking scandals in Denmark as well as the consumers eagerness to make sustainable choices underscores the urgent need for an independent organization like Fair Finance Guide to carry out investigations into the banks' investment policies and how they conduct their business.

Only then can confidence in the financial sector be restored in Denmark, and the sector can start contributing to the creation of a fairer and more just society.

Jeppe Bo Rasmussen is a Senior Policy Adviser with Oxfam IBIS in Denmark.