Q & A with Embla Husby Jørgensen, Fair Finance Guide Norway
As results of the 5th FFG Norway (Etisk bankguide) policy assessment are released, Embla Husby Jørgensen reflects on the findings.
With five years of assessments completed, what trends are you now seeing?
Never before have banks maintained such a high level as they have this year. Several of them made big leaps in our ranking.
This is the Fair Finance Guide Norway's fifth survey, and over the past number of years we have seen sharp improvements in the banks' policies and guidelines.
The Fair Finance Guide is based on a comprehensive review of the banks' guidelines, requirements and policy documents, and is run by the Norwegian NGO Framtiden i våre hender and the Norwegian Consumer Council. Each bank is assessed within 14 different thematic areas which result in scores for each bank. The higher the result, the better the banks' ESG-related guidelines.
The improvements from the first review in 2016 are significant. The increase has been from an average score of 38 per cent in 2016 to 75 per cent in 2020!
Once again, Cultura bank is the champion of ethics with an overall score of 98 per cent, making Cultura the only ethical bank included in the guide. As was the case last year, Storebrand comes in second place with 87 per cent. Third place is now awarded to Sparebank 1 Østlandet, which has made a big leap on the points list, up from 65 per cent to as much as 86 per cent this year. The fourth place is taken by Sparebanken Vest, which has risen from 73 to 83 per cent. In particular, many of the savings banks have made significant improvements in their guidelines and are therefore climbing the rankings.
Why are these improvements important?
Banks have great power in the national and international economy, as they both finance economic activity through loans and project financing, but also by investing in the companies' shares. How banks work with sustainability has direct consequences for companies' ability to attract financing. It is especially in the area of oil and gas that the banks have improved their guidelines.
The president of Framtiden i våre hender, Anja Bakken Riise has said "We find that several banks now have taken a clear position against drilling in the Arctic, as well as the extraction of oil sand and shale oil. Some banks take a step further and divest from the entire oil industry."
Is there anything new coming up?
Yes, we have been working on an ethical pension guide which will be published early next year. In this pension guide, we have isolated the guidelines used when the banks invest the money that will make up your pension - whether this is private pension savings, or it is through the employer. In the pension guide, we focus exclusively on the banks' policy for asset management and accordingly score the ESG guidelines for these investments.
With such progress in banks' scores, are there still improvements to be made?
Although the average results for the Norwegian banks have improved, Framtiden i Våre hender and the Consumer Council stress that the banks still have a lot they can improve on, both in terms of guidelines and the consequences in practice. Good guidelines for sustainability and ethics require continuous work. Additionally, good guidelines are no guarantee of good practice. It is crucial that the banks work actively to ensure that the guidelines are far more than something that looks good on paper.
The latest policy assessment (in Norwegian) is now available
Embla Husby Jørgensen is an adviser with Framtiden i våre hender (Future in our hands), a lead partner of Fair Finance Guide Norway.