By Martin Blessing, Chairman of the Board of Directors at Danske Bank – first published in Jyllands-Posten, 10 June 2022.

Climate change and the transition to a sustainable society are the biggest and most fundamental challenges facing our society in the coming decades. In an op-ed in Jyllands-Posten on 26 May, Mellemfolkeligt Samvirke (ActionAid Denmark) urged Danske Bank to take leadership in the green transition and to play its part in avoiding a global climate crisis.

Danske Bank fully shares this aspiration, and we have made a clear commitment to being a leading bank in the Nordic region in terms of sustainable finance. We have already taken – and will continue to take – significant action in pursuit of our aspiration. 

The majority of global carbon emissions causing climate change stem from the global energy system, which is why the world needs a significant acceleration in the deployment of renewable energy sources, to become more energy efficient, and to phase out fossil fuels. Danske Bank has a clear responsibility to ensure that any lending related to the fossil fuel industry is consistent with the Paris Agreement and with the objective of reaching net zero by 2050.

In 2015, Danske Bank signed the Paris Pledge for Action to show our full support for the objectives of the Paris Agreement. In 2021, we consolidated this commitment by becoming a member of the Net-Zero Banking Alliance (NZBA), which is a UN-convened, industry-led alliance of banks from all over the world. As a member of the alliance, Danske Bank has committed to achieving climate neutrality by 2050.

A key element of our sustainability policy is to phase out lending to and investment in companies with coal-based activities, so that all such activities are shut down in EU and OECD countries by 2030 at the latest and by 2040 in the rest of the world.

When around 80% of the world’s energy supply still derives from fossil fuels, a complete, short-sighted and immediate cessation of financing for all types of fossil fuels, as Mellemfolkeligt Samvirke advocates, would risk seriously disrupting energy supplies and the economy generally, and is in our view not the right approach. Our responsibility as a leading Nordic bank that serves the entire economy is to engage with all our customers and support their transition towards a sustainable future.

Our clear goal and commitment is to achieve climate neutrality by 2050 through scientifically supported methodologies, and to take significant steps toward phasing out fossil fuels by 2030. We have already taken significant steps in this area.

Over the past six years, we have reduced our fossil fuel-related lending by approximately 50%, and lending to companies that have fossil fuels in their business models now accounts for less than 2% of our total loan portfolio. In February 2022, we further restricted corporate lending by setting new targets for carbon emission reductions by 2030 for three high-emitting sectors. We have also decided to divest or not renew loan agreements with companies that we assess to be not moving fast enough towards the green transition.

Throughout Danske Bank’s history we have helped our customers adapt by financing the transition to new times and new opportunities. In the coming years, financial institutions will have a key role to play by facilitating the significant amounts of capital needed to finance the green transition. 

At Danske Bank, we fully acknowledge our role and responsibility, and we are truly committed to delivering on our promises. We look forward to continuing the dialogue with Mellemfolkeligt Samvirke and other stakeholders on this important agenda.