06-10-2022 15:28

Nordea comments on report about lending to fossil fuel companies

Fair Finance Guide has published a critical report on Swedish banks’ lending to companies operating in the Arctic. The report was referred to in an article in Aftonbladet on 3 October 2022.

According to the report, Swedish banks have granted large loans to oil companies operating in the Arctic over the last few years, and this is questioned considering current climate crisis.

The report does not mention that Nordea has reduced its financing of oil, gas and offshore activities by more than 70 percent since the end of 2019. Nordea will also, by 2025 at the latest, discontinue all financing of offshore companies, defined as companies within the oil and gas industry engaged in drilling for hydrocarbons in the ocean. Two out of six companies linked to Nordea in the report belong to this segment. Nordea has also set clear sustainability targets and was the first Nordic bank with the objective to reduce the carbon emissions across our lending and investment portfolios by 2030 in alignment with the 1.5-degree target set out in the IPCC report.

The Arctic is a very important issue and Nordea welcomes a debate about the risks of conducting business in this area. It is worth noting that Nordea’s policy for this sector defines the Arctic as offshore locations enclosed by the southernmost extent of winter sea ice above the Arctic Circle. This is the same definition also used by the Norwegian government, and we do not support businesses that are operating in that area.

Active engagement and responsible transition

It is important to remember that the energy market faces a number of challenges, both in the short and long-term perspective, says Anne Schult Ulriksen, head of ESG in Large corporates and institutions (LC&I).

“The small number of companies in this sector that we still finance have among the lowest emissions and are governed by some of the strictest regulatory frameworks. The companies also play an important role in ensuring a stable energy supply in our neighbouring region, not least in turbulent times like these, when Europe is facing an energy crisis,” she says.

Reports (on active ownership) show that simply excluding companies does not solve the issue of their emissions. Instead we risk that the problem is just passed on to someone else. The same reasoning applies to customer relationships in financing, and Nordea is continuously working to influence the companies that we finance. 

“It is clear that our efforts are paying off. As for the concerned companies in this sector, we are seeing concrete initiatives to adapt their activities and reduce their emissions during the coming years, thus accelerating the necessary transition that our society needs. Several of these companies are also contributing to the green transition,” says Anne Schult Ulriksen.