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Nordic Banks and Government Pension Funds linked to Indonesia’s Palm Oil Deforestation

A new report from Rainforest Foundation Norway, which was produced together with Aidenvironment and the Fair Finance Guide, tracks Nordic investments to Asian banks that support rapacious palm oil producers with financing that impedes push for sustainability.

While Nordic governments have taken a strong public stance against deforestation, major banks and pension funds in the region—including the Norwegian government’s own pension fund—have invested more than US $2 billion in six Southeast Asian banks that finance more than 50 percent of Indonesia’s rainforest-ravaging oil palm operations, according to a new report released on Tuesday 30 May from Rainforest Foundation Norway.

“Evidence that Norwegians and Swedes are indirectly supporting an industry that has destroyed huge tracts of rainforest is hard to square with this region’s reputation as a global leader in the fight against deforestation,” said Vemund Olsen of Rainforest Foundation Norway, which produced the report together with Aidenvironment and the Fair Finance Guide. “It’s a sobering reminder of the powerful economic forces propelling Indonesia’s palm oil industry and rewarding companies that adopt a scorched earth approach to palm oil production.”

Last year, Norway attracted international praise when it banned deforestation by embracing a procurement policy that it promised would ensure government purchases did not contribute to deforestation. Norway also has supported international efforts to conserve the world’s remaining rainforests and protect human rights in forest communities.

But the report shows several of Scandinavia’s largest banks and pension funds—including the Norwegian Government Pension Fund Global (GPFG), Nordea and the Swedish AP-fonderna—own shares in six Southeast Asian banks that back palm oil operations linked to rainforest destruction, human rights violations and greenhouse gas emissions. GPFG by itself has contributed US $1.3 billion to the Asian banks, none of which require palm oil companies they bankroll to avoid deforestation or respect land rights. Other sources of Nordic funds are Swedbank, Handelsbanken, KLP, Storebrand, Länsförsäkringar, Skandia, Danske Bank, SEB and DNB.

Click here to read the full article on Rainforest Foundation Norway.

Report & Summary:
Click here to read the report “Nordic investments in banks financing Indonesian palm oil”.
Click here to read the executive summary of the report “Nordic investments in banks financing Indonesia palm oil”.

International media coverage:
Jakarta Globe
Channel News Asia
Bloomberg
CNN Indonesia
Bosnis Indoensia
Svenska Dagbladet:
Nettavisen Norway

One of the six banks, which was mentioned in the report, put shortly after the publication a new policy on its website. The DBS Bank from Singapore has now issued a “No Deforestation, No Peat, No Exploitation” policy to finance palm oil companies.

For more information, please contact Eric Wakker.