Fair Finance Norway's Ethical Banking Guide 2023: Better on Paper than in Practice
While Norwegian banks are consistently receiving better scores, they lack the processes for achieving ambitious goals in practice. This is according to this year's assessment of Norwegian banks' policies on ethics and sustainability.
In recent years, the gap has widened between the lack of climate action on the one hand and the observed climate change and extreme weather events across the globe. The question of the role of international banks in financing companies that contribute to increased climate change is therefore highly relevant.
Every two years, the Ethical Banking Guide conducts a thorough survey of Norwegian banks' guidelines for corporate social responsibility, ethics and sustainability. This year's survey shows that banks are doing better, but also that there is still a gap between banks that perform best and worst in the survey.
Cultura Bank is still at the top, while SparebankenVest, Sparebank1 Østlandet and Storebrand are close to the top. Nordea and Danske Bank are well below but are still doing better than in previous years.
Better than international competitors
But guidelines do not say everything about banks' activities – the guidelines must also be followed up in day-to-day operations.
Since the first launch of the Ethical Banking Guide in 2016, all banks have greatly improved their guidelines, and compared with international banks, Norwegian banks now score highly.
While banks appear to be improving, selected studies have shown that banks nevertheless invest in companies that are at risk of violating human rights, or in companies that perform poorly on climate and the environment.
Not delivering on promises
This year, a new survey will be launched that has studied the processes and tools used by a small sample of banks to ensure that the guidelines are complied with when lending or investing our savings in Norwegian or international companies. Here, banks score far worse.
The "From Policy to Practice" survey covers five selected banks; KLP, DNB, Nordea, SpareBank1 Østlandet and Cultura Bank. Among the main findings are:
- All banks have drawn up processes to achieve the climate targets, but there is a lack of concrete plans to rapidly phase out investments in oil and gas, in line with the UN and the International Energy Agency's recommendation to reduce funding for this.
- Processes for managing the risk of human rights violations are not well developed at any of the banks examined. None of the banks are achieving "very well" here.
- None of the banks include human rights requirements and expectations in the contracts they enter into with companies.
- The banks' processes for biodiversity and natural disasters are generally lower than for the climate crisis.
Gap between words and deeds
The challenges of delivering on climate targets were recently documented in The Future in Our Hands' report "Banking on thin ice". A similar study from January 2023 documented the same challenge for international banks.
Check your bank on etiskbankguide.no
For more information contact Tollak Nylænde Bowitz at email@example.com