Aligning financial flows under the Paris Agreement: the case of banks in Sweden

This policy brief is based on the report Financial Flows of Five Leading Banks
in Sweden Since the Paris Agreement (DOI: https://doi.org/10.51414/sei2022.021).

The study analysed the available data on the domestic and international capital flows from the five largest lenders in Sweden and their alignment with the Paris Agreement. Between 2010 and 2020, the five largest banks in Sweden – Svenska Handelsbanken, Skandinaviska Enskilda Banken (SEB), Swedbank, Danske Bank and Nordea – gradually increased the volume of their investments to highly emitting sectors, such as oil and gas exploration and production. The sampled banks have facilitated about USD 150 billion to these sectors since the Paris Agreement entered into force at the end of 2016, mainly through syndicated loans (USD 104.4 bn) and bond issuance underwritings (USD 36.3 bn).

Placing financial flows on a “Paris-compliant” trajectory requires understanding the driving forces behind these numbers. By engaging with relevant stakeholders and providing regulatory guidance on what and how to report relevant financial activities, proper data and analyses will assist in the transition of climate-relevant sectors and the whole economy, by informing policy and future investments.