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Millions of Swedes inadvertently save on funds that contribute to the destruction of the Amazon.
Sustainability funds also invest money in companies linked to the holding, according to a review by Aftonbladet and the Fair Finance Guide.
“This is in line with what savers expect,” says Jakob König of the Fair Finance Guide.
Aftonbladet has recounted in various reports and articles on how the destruction of the world’s largest rain forest, the Amazon, is increasing rapidly, and how the entire forest in just one generation is at risk of becoming a savanna.
Something that would have disastrous consequences for the entire climate of the earth.
The harvest is driven by hunting grasslands and soybean fields. Small farmers cut down trees and burn forests to expand their fields. At a later stage, they sell their meat and beans to several large, dominant companies.
Photo: Eraldo Peres / AP
The forest is burned to expand, among other things, pastures.
Aftonbladet has taken the help of the Fair Finance Guide, led by Swedish Consumers and whose biggest funder is Sida, to examine how seven large Swedish banks and AP state funds are positioning themselves to invest in the Amazon.
Meat and soy from deteriorated soil
We have examined the holdings of banks and funds in five companies linked to the exploitation of the Amazon: the Brazilian meat giants JBS and Minerva, the US soy companies Bunge and ADM and the US venture capital company Blackstone, which provide infrastructure in the Amazon.
The companies have been accused of contributing directly or indirectly to deforestation and fires in various reports, including from the US organization Amazon Watch and the British organization Global Witness. Despite the promise of improvement, companies have repeatedly struggled to keep their supply lines free of meat and soy from degraded soil.
The companies’ environmental problems have not diminished the willingness of Swedish banks to invest. All audited Swedish banks and AP funds have invested money in one or more of the companies.
A total of SEK 3.5 billion has been invested, as the Fair Finance Guide review shows.
Nordea highlights
Swedish-Finnish Nordea stands out: The big bank has almost SEK 1.5 billion linked to Amazonian companies, most of which are the soy giant ADM.
The second largest is the Seventh AP Fund, which manages the premium pensions of four million Swedes. The fund has invested over SEK 700 million, mainly in ADM and Blackstone. The latter company is owned by one of President Donald Trump’s financiers and has been involved in disputed highway and port projects on devastated rainforest lands.
Investing in companies linked to environmental issues doesn’t have to be wrong if you take advantage of the leverage opportunity that co-ownership brings, says Jakob König, project manager for the Fair Finance Guide.
– Banks often emphasize that. But the transparency of how this impact occurs is poor and we rarely see clear results, he says.
“Ethical funds” invest
As a small investor, the opportunities for change in practice are often small, according to Jakob König.
– If you do not want to change, it is important to withdraw. As it is now, the problems continue year after year.
Photo: Fredrik Persson / TT
Millions of Swedes inadvertently save on funds that contribute to the destruction of the Amazon.
Even the funds that supposedly represent ethical considerations have not been withdrawn to invest in Amazon companies.
Swedish giant bank SEB declares on its website that its sustainable and ethical funds take more account of human rights and the environment.
The reality is that they have invested money in soybeans Bunge and ADM, two companies that, despite promises not to buy illegal ash from Amazon last year, were linked to the destruction of the primeval forest in a Greenpeace report, as well as at Blackstone.
Tip: contact your bank
Danske Bank and Handelsbanken also have funds with a sustainability profile that invest in the same three companies.
– The fact that sustainability funds are also investing in these companies does not match what savers expect, says Jakob König.
What to do as a small saver?
– First, contact your bank or pension fund and say it is wrong. You can do it yourself or through a form prescribed to banks on our website.
What opportunities do you have to change something as a private individual?
– Banks do not want to be associated with delays. So if many customers contact and say, it has an effect, says Jakob König.
Only one of Amazon’s five audited companies has been blacklisted by Swedish banks, referring to the criticized meat giant JBS, which it has repeatedly suspected has contributed to deforestation.
The Seventh AP Fund, SEB and Handelsbanken have agreed not to invest money in JBS, while Länsförsäkringar, Nordea and First and Second AP Funds have stakes in the company.
How much does your bank invest in companies linked to the destruction of the Amazon?
THEN THE BANKS RESPOND
Nordea
Katarina Hammar, Head of Responsible Investment at Nordea:
– We consider that companies are linked to the problem of deforestation as very serious. Sustainability is high on our agenda, and we are, for example, engaged in an investor call to precisely set out the requirements on how companies handle deforestation. The requirements obviously include these holdings where we also have a direct dialogue with several of them. We have already quarantined one of the companies for some time and none of the companies are included in Nordea’s sustainability funds. These requirements include, among other things, measurable and time-bound commitments covering the entire supply chain, as well as annual reporting of exposure and management to reduce deforestation. We also met with representatives of the Brazilian authorities at the end of last year to discuss the problem of deforestation. It is important to remember that Nordea’s fund management is among the largest in the Nordic region with investments in approximately 4,000 companies worldwide. Because of this, total investments in absolute terms are therefore often higher compared to other players, even though our exposure as a proportion of total investments is equal to or less.
SEB
Niklas Magnusson, press officer:
– Through the fund company SEB SEB Investment Management, some of our funds currently have around SEK 200 million invested in the companies you mention. Of this sum, just over half correspond to holdings of the SEB Listed Private Equity Fund in Blackstone, while approximately 25 percent are holdings of ethical / sustainable index funds. The remaining amount is in other funds (an index fund and strategy funds).
We continually analyze the companies we invest in based on various parameters, including environmental and sustainability aspects. We have not seen in these analyzes that the aforementioned companies carry out activities that actively contribute to the exploitation of the Amazon, of which, of course, we do not want to be part. In our sustainability funds, we exclude investments in a number of industries that we believe do not contribute to sustainable development, and also in companies that do not comply with international agreements related to, for example, human rights, the environment and environmental conditions. job. This work is complex and often conflicting information appears on the operations of the companies. Therefore, we collaborate with several renowned experts for analysis and verification. This is ongoing work and we welcome any new information.
We want to be a responsible investor, which not only means excluding investments, but also influencing the companies we invest in to improve. We do this in several ways, when it comes to deforestation, for example within the UN PRI Investor Working Group on Sustainable Palm Oil.
Danske Bank
Anna Sundblad, press officer:
What is the reason why your sustainable funds invest in companies linked to the problem of deforestation in Brazil?
– When our clients give us the confidence to manage their assets, our mission is to create long-term risk-adjusted and competitive performance. Of course, investing sustainably is also an important part of the mission. We do this taking into account the corporate governance of the company, as well as environmental and social aspects, and influencing the companies through active ownership and dialogue.
We want to influence through direct dialogue with companies to achieve change and improvement and, therefore, contribute to positive development. It is in our capacity as investors and owners that we can have a decisive influence and have a real impact. We also regularly choose to forego investments in companies that we experience have high sustainability risks and this is done based on well-defined processes that we have.
How do you think it meets the expectations of your ethical fund savers?
– Of course, we have an important task to inform our clients about how we work in this type of problem and what we take into account in our investments. As for the companies mentioned in their review, we have observed that they have publicly committed to eliminating deforestation in their supply chains, that they are signatories to the Amazon Soy Moratorium, that use technologies such as satellite monitoring to monitor their suppliers and that Collaborations end. with suppliers that do not comply with forest deforestation policies. These are commitments that we regularly monitor.
Handelsbanken
Magdalena Wahlqvist Alveskog, CEO of Handelsbanken Fonder:
What is the reason why your sustainable funds invest in companies linked to the problem of deforestation in Brazil?
– Yes, it is true that there are some of these holdings among our index funds. Our ambition is for all of our index funds to follow sustainable rates and today more than 90 percent of our index funds are managed according to sustainability criteria. We have come a long way, but we still have some distance to go.
In this case, we do not yet have methods to capture companies in our passive index management. To limit these sustainability risks, we work with influence through dialogue and are part of the international investor initiative PRI Ceres Sustainable Forest, which encourages companies to increase transparency, stops deforestation and respect for human rights in the entire value chain.
How do you think it meets the expectations of your ethical fund savers?
– We are pleased that so many of our clients think that it is important that their savings contribute to sustainable development. This is also our ambition at Handelsbanken Fonder. We agree with the importance of large asset managers redirecting their investments to limit deforestation and do active impact work. Our goal is to make our index funds even more sustainable and develop our impact work. We work as fast as we can, but it is work that takes time.
Seventh AP Fund
Johan Florén, Head of Communication and Corporate Governance:
– Deforestation in the Amazon is a great challenge that is worth taking on. The management strategy of the Seventh AP Fund is not based on the selection of specific companies. We buy the entire market as defined by our MSCI ACWI index, in practice just over 3,000 companies. As a sustainable investor, we work with a combination of blacklisting and active ownership. We blacklist companies that violate international standards related to the environment, human rights, labor law and corruption. Currently, some seventy companies. For the companies he mentions, we have no information linking them to any violation of the rules. However, we started working with some of them last year due to problems in the Amazon.
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