Swedish banks improve sustainability commitments but still violate the Paris Agreement
The biggest banks in Sweden have become more restrictive when it comes to financing and investing in fossil fuel companies. However none of the major banks say no to financing companies that expand their oil and gas extraction, despite it violating the Paris Agreement. This is shown by Fair Finance Guide's annual ranking of nine Swedish banks' sustainability guidelines.
(Update June 10: Handelsbanken is now changing its policy and stopping all new loans to companies and projects that expand the extraction of fossil fuels.)
Swedish banks continue to improve their sustainability guidelines when investing and lending money. The small niche banks, Ekobanken and JAK Medlemsbank, still make the strongest commitments and support almost one hundred percent of the internationally recognized sustainability principles assessed by the Fair Finance Guide. Among the major banks, Swedbank promises the most, committing to follow 70 percent of the principles. SEB has made the biggest improvement and rises from the bottom place last year to become the second-best big bank with 68 percent.
"It is very pleasing that the banks continue to improve their guidelines. Sustainability is an important issue for Swedish consumers and they do not want their banks and savings to support businesses that destroy the planet", says Jakob König, who leads the Fair Finance Guide initiative at the Swedish Consumers’ Association.
Climate improvements with large gaps
The biggest banks in Sweden have tightened their guidelines particularly with regard to financial support to fossil fuel companies. Länsförsäkringar, SEB and Swedbank have followed Handelsbanken’s decision to exclude fossil fuel companies from all their investment funds. Within lending, SEB, Nordea, Danske Bank and Swedbank have imposed several new restrictions, especially when it comes to financing of coal companies, fossil fuel projects and companies that extract tar sands, which is a method of extraction with a particularly high climate and environmental impact.
However the banks new restrictions do not include halting their largest fossil finance activity, which are companies that extract oil and gas in Norway, including in the Norwegian part of the Arctic. The banks have also not restricted financing of companies that expand their oil and gas extraction, despite the fact that the International Energy Agency (IEA) have stated that an immediate stop to new extraction is needed if we are to achieve the Paris Agreement's 1.5-degree target.
"It is remarkable that the banks do not stop the support to oil companies that expand their extraction. These companies are moving in the completely wrong direction which must stop immediately if we are to prevent a climate catastrophe, says Jakob König.
All the large banks have however committed to transition their entire lending and investment portfolios to net zero emissions by 2050. Handelsbanken, as well as the fund companies at Swedbank and SEB, have promised to reach it by 2040 . However, limiting global warming in accordance with the Paris Agreement requires sharp reductions in emissions in the near future. Nordea is the only bank that has set both short- and long-term conversion targets for its entire financial business.
New promises on animal welfare
Among the 15 sustainability themes assessed by Fair Finance Guide, the banks have made some of the biggest improvements within animal welfare. Länsförsäkringar and Swedbank have for the first time developed specific policy documents on animal welfare that apply to the companies in which they invest. SEB and Danske Bank have included new commitments on animal welfare in their sector guidelines for agriculture companies. SEB is the first major bank to take a stand against animal testing on non-medical products and against pure fur breeding, such as mink farms. Still, animal welfare is the area where the big banks have the weakest guidelines. On average, they support only 18 percent of the principles of animal welfare.
Protests from bank clients work
This is the eight time that the Swedish banks’ have been assessed. Since the first assessment in 2014 more than 40,000 Swedish bank clients have reacted to the results by sending messages to their banks via Fair Finance Guide’s website calling for more consideration of sustainability. The banks’ have also improved significantly over the years and have made a threefold improvement of their commitments since 2014.
"This shows that consumer pressure can have a great impact if people just get more insight and an easy tool to act. But we are not finished yet, so keep sending messages and let your bank know what you think", says Jakob König.
Read the full report (in Swedish) here.
Jakob König, project leader for Fair Finance Guide in Sweden, Jakob.firstname.lastname@example.org, +46 8 674 43 09