Nordea Extends Fossil Fuel Transition Requirements

    Stockholm (NordSIP) – On the same day that the EU Sustainable Finance Disclosures Regulation (SFDR) took effect, with asset managers describing their implementation of the regulation, Nordea announced that 140 of its funds are tightening their requirements on fossil-fuel companies. The funds now only invest in companies that are on a green transition path.

    According to the Nordic bank, energy companies now need to have a clear plan for compliance with the Paris Agreement to be considered by these funds. The companies also need to visibly be on the path towards implementing these plans. Currently, 73 of Nordea’s funds already impose these requirements or even stricter ones.

    “No oil and gas producers and of course coal miners live up to these requirements at present, but quite a few electricity companies do,” explains Eric Pedersen, Head of Responsible Investments at Nordea Asset Management (NAM). “The key measure to limit global warming is to reduce emissions from fossil fuels. The energy companies must have a strategy for complying with the Paris Agreement and limiting emissions from fossil fuels – and they must have started the hard work of changing their business model,” Pedersen adds.

    At the same time, Nordea also announced that tobacco companies would be excluded from the 140 funds. While the measure may appear trivial, it should be contrasted with the recent report by Hargreaves Lansdown, which noted that among the top 5 highest ESG rate companies on the FTSE 100 includes British American Tobacco.

    Image from Shutterstock


    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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