NIB Stops Excluding Defence Industry

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    Stockholm (NordSIP) – At the start of June, the Nordic Investment Bank (NIB) announced it had decided to stop excluding defence investments. According to the NIB, this decision follows a new guidance issued in March by the NIB Board of Governors, “prompted by the changed geopolitical situation”.

    Financing Security and Defence

    The NIB’s Board decision was not a blanket removal of restrictions on investments in defence and security. According to the NIB, the reform to the exclusions policy allows it to invest in security and defence, but not in weapons and ammunition.

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    The focus appears to be on dual-use equipment and projects— those with both military and civilian applications— and facilities, services, technology and other defence equipment, while continuing to exclude weapons and ammunition. “The previous restriction on dual-use items, which limited a company’s revenues or operations from military use to no more than 20%, has been lifted,” the NIB explains.

    “This policy change sends an important signal and carries significant value, allowing us to adapt to new geopolitical realities while maintaining the core mission of the Bank. Our mission to finance climate and nature, as well as productivity and innovation, remains central to NIB,” André Küüsvek, NIB President & CEO said.

    Other changes to the policy enhance clarity and align with NIB’s Climate Strategy and targets, launched at COP28 in 2023. The revised policy highlights the Bank’s commitment to protecting nature and biodiversity while integrating ESG factors in investment decisions.

    The March Guidance by the NIB Board of Governors

    Reviewing the NIB’s press release from March reporting on the Board’s decision, the guidance appears to have been expressed in subtler ways than the recent exclusions reform would suggest.

    On that occasion, and having highlighted the negative economic effect of the Russo-Ukrainian conflict, the Board only noted that “a broader agenda is evolving, encompassing access to key materials, the security of supply chains, data and information infrastructure, a stronger defence as well as developing the related infrastructure. NIB stands ready to respond to the priorities of its owners,” the NIB said.

    “Fostering our joint approach to climate and nature, productivity and innovation, and security and resilience, requires collaboration in long-term strategy and short-term action. The Nordic and Baltic countries have demonstrated the success of this formula in the past, and it will serve us well in the future,” the NIB added then. “We call on the Nordic and Baltic companies to use NIB’s long-term financing in transforming today’s challenges into tomorrow’s growth and resilience,” the NIB continued.

    Public consultation

    As the next step, NIB is inviting its stakeholders to a public consultation on the revised Sustainability Policy, starting now. Stakeholders are encouraged to submit comments by 4 July 2024. The NIB will review the contributions and may decide to draft an amended policy for separate approval by the Board of Directors.

    “This review aims to ensure that our updated policy reflects the latest developments in sustainable finance in the new geopolitical context. The policy includes updates to NIB’s frameworks and policies and aligns with the evolving sustainability perspectives of our Nordic and Baltic member countries. We look forward to receiving feedback from our stakeholders on the updated policy,” Luca De Lorenzo, Head of Sustainability & Mandate at NIB said

    Image courtesy of NIB
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