Nordea makes record improvement in FFG Sweden's sustainability ranking

02 December 2020

Nordea makes record improvement in this year's ranking of banks' sustainability promises

From the back seat to the second best major bank – Nordea is taking a giant step this year in FFG Sweden's review of the banks' guidelines for sustainability. Handelsbanken is also taking a big step up and Swedbank remains in first place among the seven largest banks. While SEB, which was at the top among the major banks when Sweden's Fair Finance Guide was launched, ends up in last place.

For the sixth year in a row, the small niche banks, Ekobanken and JAK, are at the top of the review of the banks' guidelines for how they invest and lend money. But apart from that, there are several major changes in this year’s ranking. Nordea and Handelsbanken have improved their ratings the most - with increases of 12 and 8 percentage points respectively. Nordea's improvement is the biggest ever and Handelsbanken climbs significantly from second to last place to third best major bank.

"It is gratifying that several banks have tightened their guidelines on sustainability", says Jakob König of Fair Finance Guide. "It shows that consumer power is an influencing tool that really works and that all emails sent by customers to their banks have had an effect."


Climate progress but with large gaps

In the climate area especially, several banks have taken significant steps this year. Swedbank has adopted the most ambitious goal of restructuring all its investments in line with the Paris Agreement by 2025. Handelsbanken, Skandia and Länsförsäkringar have adopted new positions on ceasing to invest in fossil companies to varying degrees. Handelsbanken has gone the furthest with a purge of fossil fuel companies from virtually all of its funds.

On the other hand, all large Swedish banks have significantly weaker climate guidelines for their lending. An overall gap is that the policy for excluding fossil fuels does not apply to their existing loan customers.

"In the very serious situation the planet is in, all banks must immediately clear out fossil fuel companies that do not want or can not adjust in line with the climate goals" says Jakob König.

Weak commitment to animal welfare

One area where, on the other hand, very little has happened since last year is animal welfare. The majority of Swedish banks still allow the worst forms of animal husbandry, such as fixing sows, raising calves isolated in small boxes or animal experiments for cosmetics. Of the major banks, only Nordea has adopted new guidelines against, among other things, long animal transports and animals kept in cramped cages. The Swedish banks are also lagging behind their counterparts in the Netherlands, where the banks on average support two thirds of the principles, while the large Swedish banks only stand behind eleven percent.

After animal welfare, tax evasion and gender equality are the thematic areas where banks have the weakest guidelines. With regard to tax evasion, however, Nordea, Handelsbanken and Länsförsäkringar have improved since last year. But much remains to be done.

"Given that developing countries lose hundreds of billions every year in tax evasion - far more than they receive in development assistance - it would be desirable if banks place higher demands on multinational companies not to engage in aggressive tax planning." Jakob König says.


Killer robots and living wage

The banks have the most sustainable guidelines when it comes to corruption, human rights and working conditions. Several banks have also tightened their guidelines on controversial arms exports – especially Danske Bank, which has begun to exclude investments in arms companies linked to controversial exports of conventional weapons. On the other hand, no bank distances itself from the development of so-called killer robots, ie weapons that can select and attack targets on their own.

"That no bank has a policy against supporting companies that develop killer robots is remarkable. Such a position should be obvious given that the banks already have guidelines against landmines and cluster bombs." says Jakob König.

Nor does any bank make sufficient demands that the seamstresses in the fashion companies in which the banks are partners should be able to live on their full-time salary.

"We have in a previous study shown that many seamstresses who sew clothes for H&M's subcontractors often have to borrow money to make the economy go together, even though they work full time. They are crammed into inadequate housing and find it difficult to afford medical care and food for themselves and their children", says Jakob König. "Here, the banks need to use their influence to make the clothing companies take greater responsibility."

Read the report: Swedish banks' sustainability rating 2020