Nordea comments NGO report on carbon footprint of Swedish banks

On January 24, the NGOs Fair Finance Guide Sweden and Swedish Society for Nature Conservation published a report on financed emissions from lending for the five largest banks in Sweden: Handelsbanken, SEB, Swedbank, Nordea and Danske Bank. The report was also mentioned in Swedish media.

Emissions from the banks’ customers

It is important to clarify that the report examines banks' financed emissions, i.e. scope 3. These are emissions that come from the banks' customers, for example from mortgages and the emissions from companies in the entire Nordic region (and also parts outside the Nordic region through mainly other banks’ exposures), which includes large global corporates. That the totality of these emissions are greater than Sweden's territorial emissions, as the report says, is not surprising.

Nordea has the second lowest emission intensity

Despite Nordea being the largest bank in the Nordics and therefore having a high absolute amount of financed emissions, Nordea’s carbon footprint per MSEK is lower than all of the other banks except for Handelsbanken. Because of Nordea’s Nordic focus, it should also be noted that the exposure in Nordea’s portfolio is more diversified in terms of geographical and sectoral distribution than some of the banks focusing primarily on the Swedish market. This proves Nordea’s strong commitment in managing its financed emissions, across markets.

Nordea has the most ambitious 2030 mid-term emission reduction target

According to the Intergovernmental Panel on Climate Change (IPCC) the global emissions need to decline by 50 per cent by 2030. Nordea is so far the only Nordic bank that has a commitment reflecting this ambition with our 40-50% reduction in emissions across all of our lending and investment portfolios. At the end of 2022, the emissions were already down by 19% compared to the baseline year 2019.

Nordea at the top of covered asset classes for reported financed emissions

During the past years there has been intensive work by many teams and individuals in Nordea to collect important emissions data from our customers. 2022 represents only our second year of reporting estimated financed emissions and a substantial improvement in the coverage and quality of our financed emissions exposures across asset classes. This is captured in the report as Nordea is reported to cover the second most asset classes of all banks. For 2023 Nordea will also report financed emissions for additional sectors, which would make us leading in the report.

Recommendations to improve Nordea’s transition plans

To further improve Nordea’s transition plan the report mainly recommends Nordea to strengthen its fossil fuel policy. This is an important area that the bank regularly assesses. The small portfolio of companies in this sector that is still financed is governed by some of the strictest regulatory frameworks. These companies also play an important role in ensuring a stable energy supply in our neighbouring region. That said, Nordea encourages a transition away from fossil fuels and towards renewable energy.