New report finds ongoing finance for coal, oil and gas companies, with little commitments to phase-out from fossil fuels. 

Since the signing of the Paris Climate Agreement at the end of 2015, ten Scandinavian banks have provided US$ 67.3 billion in credit, including lending and underwriting, to companies and projects in the coal, oil and gas sector. (1) In addition, as of June 30 2020, these ten banks held US$ 7.1 billion in shares in fossil fuel companies.

These figures are released in a new report, “Banking on Thin Ice: Exposing Scandinavian Bank Finance for Fossil Fuels“, published today by BankTrack, Fair Finance Guide Sweden, Fair Finance Guide Norway, Oxfam IBIS and ActionAid Denmark. The report provides a first-of-its-kind comprehensive overview of not only Scandinavian bank finance for the fossil fuel industry but also the climate policy commitments each bank has put in place.

The report puts Norway’s DNB as the top Scandinavian bank lender and underwriter to the fossil fuel industry (US$ 20 bn), followed by Sweden’s SEB (US$ 17 bn) and Finland-headquartered Nordea (US$ 15 bn).

Scandinavian banks poured $67 billion into the fossil fuel industry since Paris

Nordea and DNB also held the largest shareholdings in fossil fuel companies, with US$ 2.5 billion and US$ 1.3 billion respectively. Danske Bank was the third largest fossil fuel shareholder, holding US$ 1.2 billion.

The finding that the Scandinavian banking sector continues to pour billions into the very industry that is causing the climate crisis, is in stark contrast with the generally progressive reputation of the region when it comes to taking effective action on climate change.

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It also raises serious questions about the sincerity of the climate commitments these banks have made when they all signed on to the Principles for Responsible Banking, which commits them to align their business activities with the goals of the Paris Agreement. (2) Meeting these goals means global CO2 emissions should decline to effectively zero by 2050. However, none of the banks have so far made a concrete commitment to achieve group-wide zero or net-zero emissions in their financing activities by 2050.

The report provides a detailed analysis of the policies that all banks currently have in place to restrict financing for the fossil fuel industry, using the methodology of the “Banking on Climate Change” report to assign a maximum of 200 points for the quality of these policies. (3) With nine of the ten banks scoring less than 25 out of 200 points there is a clear need to strengthen policy commitments on fossil fuel financing. Only SEB scores higher, with 75.5 points out of 200. (4) It is important to consider the policy scores in light of the banks’ credit exposure to the fossil fuel industry, as shown in the table below.

Scandinavian banks poured $67 billion into the fossil fuel industry since Paris

Overall, financing for coal mining and coal power is subject to more restrictions than finance for the oil & gas sector. Six of the ten banks have policies ruling out project finance for new coal power projects, while four banks rule out project finance for new coal mining projects. (5) Only SEB has a commitment in place to phase out existing financing for most coal companies, although it makes a significant exception for German companies. None of the banks explicitly restrict finance for companies expanding the coal sector, the standard set now by six European banks. (6)

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