Danish parliamentarians have raised questions about Danske Bank’s support for fossil fuels after a story by public service broadcaster DR accused the lender of failing to hold investee companies to account.
Lisbeth Bech-Nielsen, finance spokesperson for Denmark’s largest opposition party Socialistisk Folkeparti, submitted a question to the business minister after the report appeared, asking whether it “believes that voluntary action is enough to achieve the goal of turning financial money flows from brown to green”.
According to a report published in November by NGOs including BankTrack and the Danish branch of ActionAid, the 10 Nordic banks provided $21.2 billion in financing to fossil fuel sectors in the two years to June 2022, and their asset management wings increased their shareholdings in fossil companies by $2 billion to $9 billion over the same period.
Danske Bank attracted particular criticism for its DKr6 billion (€215 million; $232 million) investment in Equinor. The Norwegian state oil giant has a 35 percent stake in the Wisting Oil Field, the most northerly oil development in the world, which is projected to produce 500 million barrels of oil in its lifetime and is located in a vulnerable ecosystem.
Danske’s head of active ownership, Mads Steinmüller, said: “You cannot unfortunately be a part of pushing the companies in a greener direction without also having oil extraction in the short run.” He noted that Danske had recently divested Exxon for moving too slowly and was prepared to do so for other companies.
However, analysis provided by the NGOs to DR indicated that the bank voted against six climate proposals at Equinor last year, including one that would have mandated an emissions reduction plan in line with the Paris Agreement. Danske has also voted against climate proposals at Shell and BHP.
While Steinmüller said that many climate proposals lack quality or are unrealistic, analysis showed that other Danish pension funds voted in favour of the proposals.
A spokesperson for Danske said it is in “close dialogue” with Bech-Nielsen. “It is important to us that the challenges of the green transition are solved in co-operation between the politicians and a stakeholder like Danske Bank,” they added.
Steinmüller said the bank had voted in favour of 70 percent of climate plans in the last proxy season. The spokesperson declined to comment further on its alignment with other investor votes.
While Danske has been the focus of criticism for its fossil fuel investments, the bank’s coal and oil and gas financing policies perform relatively well versus other Nordic banks in the report.
Its coal policy scored zero out of 10 on the absolute threshold metric but received high scores on the relative threshold, expansion, phase-out and project assessments. All banks were given low ratings on oil and gas policies, but Danske was among the strongest.
Unsurprisingly, Equinor was the most widely held energy company by the asset management arms of Nordic banking groups. According to the report, the sector owned shares worth $849 million in the Norwegian giant at end-June. Enel was the next most popular, at $658 million, followed by NextEra at $561 million.
The biggest recipient of debt financing was Aker BP, which received $3.2 billion in the two years to June 2022, followed by Lundin Energy on $2.4 billion and Fortum on $1.7 billion.