Through an analysis of portfolio data, Danske Bank has created an initial understanding of the drivers and sectors in its lending and investment portfolios that potentially negatively impact nature and biodiversity.
The findings lay the foundation for future engagement with customers and investee companies.
Nature and biodiversity are under pressure posing significant risks to the global economy and societies*. To protect both people and planet as well as the global economy, measures need to be taken to reverse nature loss.
At Danske Bank, we want to be a catalyst for this change by actively engaging with the companies we lend to and invest in.
Therefore, we have conducted an assessment of our lending and investment portfolios to identify the sectors that have the highest potential negative impact on nature and biodiversity.
“Through this assessment, we can get an understanding of the sector impacts on nature and biodiversity. This enables us to interact with customers and investee companies in high-impact sectors and help them understand both their potential impacts on nature and the potential financial risks,” says Kristin Parello-Plesner, Head of Group Sustainability at Danske Bank.
We will engage with the three high-impact sectors in our lending portfolio
The assessment revealed the three sectors in our lending portfolio with the highest potential negative impact on nature and biodiversity which are 1) agriculture including food products and fisheries, 2) forestry, pulp and paper and 3) shipping.
We will now engage with customers within these sectors on identified nature and biodiversity indicators before the end of 2024. These indicators are specific and relevant for the industry the respective companies operate in.
At our Business Customers business unit, we will engage with 300+ customers in the agriculture sector, which covers more than one-third of our lending exposure.
At our Large Corporations & Institutions business unit, we will engage with a total of 50+ customers across the food products and fisheries sector, the forestry, pulp and paper sector and the shipping sector, which covers at least two-thirds of our lending exposure in each respective industry.
Through engagement, we seek to increase awareness of the importance of better understanding nature-related impacts and risks among our customers. This also helps us to better understand our own impacts and dependencies through our financing and investment activities. This is a first step for companies and for ourselves to be able to manage nature-related impacts and dependencies with the aim of supporting the protection of nature.
We will engage with 30 companies in our investment portfolio
For our investments, our analysis indicates that 60% of our assets under management potentially have a high negative impact on nature and biodiversity through the operations of the investee companies. Furthermore, almost 30% of the investee companies potentially have a high dependence on nature and its ecosystems.
Danske Bank has therefore, together with Danica Pension, committed to engage with 30 large, global investee companies that all have a significant impact on nature and biodiversity before the end of 2025.
We want to enhance our understanding of the impacts and dependencies on nature of our investee companies and potentially resulting risks. Through our engagement we can create awareness of the importance of sufficiently managing impacts and related risks, which, in turn, can help to address some of the associated risks and contribute to safeguarding the value of our clients’ investments.
To achieve this, we have initiated a targeted active ownership effort, where we will engage in dialogue with 30 large, global companies spanning high-impact sectors such as energy, food and transportation.
First step on a long journey
The nature and climate crises are interlinked and a threat to societies and livelihoods as they both pose severe challenges to the ability of people to uphold or obtain an adequate standard of living.
We have already developed an ambitious Climate Action Plan, outlining our path to net zero and aligning our lending and investment to limiting global warming to 1.5°C and our goal is to pursue a similar level of ambition with the nature and biodiversity agenda.
We have started our journey to live up to the commitments related to nature and biodiversity that we have made:
We have committed to the Finance for Biodiversity Pledge
We have joined the Partnership for Biodiversity Accounting Financials PBAF
We have joined the global investor engagement initiative Nature Action 100
“We recognise, however, that the steps we have taken are just the starting point and that there is still much work ahead to protect and restore our ecosystems. Therefore, we will continue to increase our understanding of impacts and dependencies as frameworks, data and knowledge mature and we will fulfil the commitments we have made in endeavouring to take our share of responsibility and contribute to reversing nature and biodiversity loss and so enable a more sustainable future,” says Kristin Parello-Plesner.