Sweden’s SEB backtracks on sweeping exclusions amid outcry

Leading Nordic financial services groups forced into re-think

Sweden’s SEB Group is re-thinking its exclusion and engagement processes at its asset management arm after facing an unexpected backlash over its decision to publish a list of 40 newly excluded companies.

SEB, one of the Nordic region’s leading financial services groups, had announced a sweeping exclusion list, saying companies that violate international standards for the environment and human rights would be removed from its funds. It took its total exclusions to 100, including household names like Royal Dutch Shell and Renault.

The 40 new companies would be excluded from SEB’s actively managed funds as of this month and would be omitted from its index funds later this year.

But now – citing “negative reactions” and unforeseen political implications of the exclusions – SEB has gone on to announce it was in the process of “doing a retake and changing ways of working”.

In a statement it references the “political debate on Israel-Palestine” as casting “a shadow” over its sustainability efforts.

The exclusion list – now removed from SEB’s web site – included IT giant Hewlett Packard Enterprise, reportedly due to its previous contribution to Israel’s controversial checkpoint system BASEL.Anette Andersson, SEB’s ESG Investment Specialist, told RI that SEB “never anticipated that the exclusions would get so much attention”.

It is unclear exactly what “doing a retake” entails but SEB has stated a commitment to greater dialogue after consulting with several of the excluded companies.

“We never anticipated that the exclusions would get so much attention”

Head of ESG Hans Ek said: ““During the week, we have been in contact with and met several of the companies that were on the list, and in those discussions there has also emerged new information and concrete examples of how companies work to deal with the issues.”

SEB, a leading player in the green bond market, has established a green bond framework and a dedicated green loan portfolio of SEK11.8bn.

It comes as SEB – under new CEO Johan Torgeby – has separately been fined SEK12m (€1.2m) by Swedish financial regulator Finansinspektionen over error in the “internal control of transaction reporting”. Torgeby took over earlier this year from long-time CEO Annika Falkengren, who left for Lombard Odier.