How Swedbank Has Initiatied Sustainable Banking Shift
The banking sector and the fossil fuel industries are entwined. For generations, banks have been significant backers of fossil fuels.
The 60 largest banks globally have invested a massive US$705bn in fossil fuel enterprises in 2023 alone, as per the Banking on Climate Chaos report. This significant investment amount aggregates to an alarming US$6.9tn since the Paris Agreement's inception.
With almost double their territorial emissions, Swedish banks finance nearly 100 million tonnes of CO2 emissions yearly, as reported by Fair Finance Guide’s Swedish division.
Amid growing public dissatisfaction, one bank has stepped forward, setting a precedent by nearly severing all its fossil fuel ties.
Introducing Swedbank
Swedbank, a major player in the Nordic-Baltic banking sector, calls Stockholm its home. Boasting a robust customer base, they service over 3.8 million people in Sweden and another 3.6 million across Estonia, Latvia and Lithuania, with a strong workforce of 17,000 employees.
Johanna Fager Wettergren, the Head of Group Sustainability, furthers this: "Sustainability is at the core of our business strategy. We're committed to fostering a long-term, socially and environmentally responsible society by enhancing and diversifying our offerings to customers."
Swedbank's Sustainable Shift
The tides turned for Swedbank following extensive protests by environmental activists. The bank has now ceased providing loans to oil companies, marking a significant shift in their operational ethos.
"The banks must stop financing the hunt for more fossil fuels, it completely undermines the climate transition," states Jakob König, the Head of the Fair Finance Guide.
Swedbank's decision aligns with Handelsbanken, another banking institution that halted its financing of oil companies two years prior. In a similar declaration, Danske Bank has also ended its fossil fuel financing in 2023, noting previously that 99.9% of its carbon footprint stemmed from financed emissions.
Karin Lexén, Secretary General at the Swedish Society For Nature Conservation, adds: "It is gratifying that another major Swedish bank has become an international role model in sustainable financing. Now, others must follow suit and take responsibility, as substantial fossil fuel companies still receive substantial loans, perpetuating activities that heighten the climate crisis."
This sentiment is echoed strongly by the Swedish Society for Nature Conservation's report, noting, "Since the Paris Agreement, Swedbank has provided US$3.6bn in finance to fossil fuel companies, with a 90% reduction in fossil fuel finance in the last two years as compared to the prior period."
Comparative Stance of Other Major Banks
The report further delves into the varying approaches among Nordic banks concerning fossil fuels. "Swedbank has drastically cut down on its fossil financing, and Danske Bank too has seen a marked decrease."
SEB outlines its strategy: "We've cut our credit exposure to upstream oil and gas activities by over 75% from 2019 to 2024, while our sustainability-related financing soared by 185% by the end of 2024 as compared to 2021."
This indicates a serious commitment to collaborating with energy companies, reducing the average fossil share in their energy portfolio from 59% in 2019 to 30% in 2024.
"Fossil fuels still play a critical role in the global energy systems. The most substantial climate impact can be achieved by fostering cooperation with our clients, supporting them through this transition in alignment with the Paris Agreement," concludes SEB.
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