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Key Findings

Scandinavia takes the lead among 126 globally significant financial institutions that have formal coal exit policies.

Nordic countries increasingly are restricting the provision of finance and insurance for new coal projects, selling investments in fossil-fuel companies and investing in companies providing solutions to climate change.

The region has been leading the global trend away from coal since 2015. Extensive fossil fuel divestment, combined with the sheer size of Norway’s sovereign wealth fund, has attracted global attention.

Executive Summary

Norway’s sovereign wealth fund is the most widely cited and largest global financial institution demonstrating world-leading fossil fuel divestment policies necessary to limit carbon emissions.

The Fund however is but one of many Nordic majors that have increasingly provided global leadership since 2013. Others include Norway’s DNB, Storebrand and KLP; Denmark’s Danske Bank, MP Pensjon and ATP; Sweden’s state pension funds Fjärde AP-fonden (AP4) and Sjunde AP-fonden (AP7); Finland’s OP Financial Group, Varma and Ilmarinen; Sweden’s Handelsbanken, Swedbank, SEB and Riksbank, Sweden’s central bank; and Nordea and the Nordic Investment Bank, both headquartered in Finland.

This briefing note examines the global leadership position of Nordic countries in their implementation of financing policies that are starting to align with the Paris Agreement. They are increasingly applying divest-invest principles, restricting the provision of finance and insurance for new coal projects and selling investments in fossil-fuel companies while investing in those companies providing solutions to climate change.

Almost all paths to less than 2°C of global warming require the phase-out of all non-abated coal use globally before 2050. Thermal coal is the largest and most emissions-intensive fuel source, and the one most technologically challenged by cheaper, zero emission alternatives such as solar, wind and hydro. For these reasons, most financial sector climate policies  start with thermal coal / coal power exclusions, and subsequently build from there.

This is reflected in the world’s largest asset manager BlackRock’s January 2020 announcement, where it is divesting thermal coal miners as a key part of its first step to reduce global emissions and climate risk to its portfolio.

Tim Buckley

Former Director Energy Finance Studies, Australasia, Tim Buckley has 25 years of financial markets experience, specializing in equity valuation, including as a top-rated analyst and as co-founder and managing director of Arkx Investment Management.

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