Nordic financial institutions are committed to climate targets in speech, but still continue financing and investing in fossil companies, whose business models are far from sustainable and future proof. Capital flows need to be shifted to support sustainable, renewable energy and a green industrial transformation.
Key takeaways:
- Nordic investors continue to back unsustainable fossil fuel business, such as the expansion of coal mining for iron and steel production (metallurgical coal).
- Pension funds and asset managers must cut off investment flows to fossil fuel production and support renewable energy and the climate transition of industry.
- The steel industry is at a turning point: most of its ageing, coal-dependent plants are reaching the end of their operating lives, and the financial sector will determine whether replacement investments go into low-emission production.
- Investors should require steel-consuming industries to make public commitments to procure low-emission steel.
Finance directs the speed at which global emissions reductions will be realized
Banks, pension funds and asset managers need to step into the forefront and ensure that all financial flows to expansive fossil producers are cut off. At the same time, investments into sustainable, renewable energy and low-emission industrial technologies need support.
The global steel industry is at a critical crossroads. A majority of coal-fired blast furnaces are coming to the end of their operating life during this decade, and investments into new production capacity are needed. The financiel sector plays a crucial role in securing that future investments are meade in low-emission technologies and that the use of metallurgical coal, i.e. coal used in steel-making is phased out.
Our Impact
We publish research reports and comparative studies on financial institutions’ exposure to carbon-based steel production and metallurgical coa. We provide information and , engage in dialogue with financial institutions. We visit annual general meetings and demand directing financial flows to low-emission technologies, away from companies continuing fossil-based operations. We collaborate internationally through the European Fossil Free Steel Network with, for instance, Urgewald, the Nordic Center for Sustainable Finance, BankTrack, and Reclaim Finance.
Report: Nordic Banks’ Ties to Fossil Fuels Exposed
