Statistical news focuses on the latest figures and trends in Danmarks Nationalbank’s statistics. Statistical news is targeted at people who want quick insight into current financial data.
New climate-related indicators
Danmarks Nationalbank has published new climate-related indicators for the financial sector’s financing of greenhouse gas emissions from investments in listed companies. Banks and mortgage credit institutions are now included in the indicators, while previously only investment funds and insurance and pension companies were included. In addition to financing direct greenhouse gas emissions (scope 1 and 2), there is now data on financing of indirect emissions (scope 3). These emissions are not directly controlled by companies. Finally, climate-related indicators have been published for the financial sector’s investments in Danish mortgage bonds, which reflect the emissions from residential and commercial properties.
What is included in the climate-related indicators for the financial sector?
Note:
Link to statbank
Link to sources and methods
The climate-related indicators cover insurance and pension companies, investment funds, banks and mortgage credit institutions, while holding companies and other credit institutions are not included (see sources and methods).
The climate-related indicators do not fully capture the financial sector’s overall climate footprint, as financed emissions from bank loans are not yet included. The same applies to emissions via unlisted equities and bonds. The climate-related indicators will gradually be expanded as data quality and data availability improve.
Data can be found in the statbank and you can read more about the methodology and uncertainties in sources and methods (link).
Bank financed emissions via listed companies
Emissions financed by banks and mortgage credit institutions via investments in listed companies are now included in the statistics. Danish banks and mortgage credit institutions have collectively invested kr. 47 billion in listed companies. Banks account for the majority of the investments. If their investments are added to those of the institutional investors, the financial sector as a whole has invested almost kr. 1,600 billion in listed equities and corporate bonds. The banks primarily finance emissions via their lending, which is not yet included in the statistics.
Scope 3 emissions
The new statistics show the financial sector’s financed scope 3 emissions, which amounted to 72 million tonnes of CO2e in 2023. Scope 3 emissions are the indirect emissions in the value chain of the companies in the portfolio. These emissions may be related to the processing of materials at suppliers or emissions related to the use of the companies’ products after being sold.
The financed scope 1 and 2 emissions are 10 million tonnes of CO2e. Scope 1 and 2 emissions are the emissions that can be controlled directly or indirectly by the companies. This could be, for example, the burning of fossil fuels in production or emissions from energy purchases from utility companies.
Scope 3 emissions are associated with significantly more uncertainty than scope 1 and 2 emissions, as they require mapping of emissions throughout the value chain. Calculation of financed scope 3 emissions can also lead to significant double counting. This is partly bescause one company’s scope 1 emissions can be other companies’ scope 2 and 3 emissions.1 Financed scope 3 emissions must therefore be interpreted with caution.
Large scope 3 emissions
Note:
Financed emissions at the end of the year, i.e. 4th quarter, calculated as the financial sector’s financed scope 1, 2 and 3 emissions via investments in non-financial companies (S.11), where the insurance and pension companies’ investments via funds (S.124) are looked through. *2023 are preliminary figures; see Sources and methods (link).
Source:
Danmarks Nationalbank, Morgan Stanley Capital International (MSCI) and Institutional Shareholder Services (ISS).
Financed emissions via Danish mortgage bonds
The financial sector has more than kr. 2.000 billion invested in mortgage bonds. Through these investments the financial sector finances emissions from residential and commercial properties.
Financed emissions from mortgage bonds are based on energy consumption in the properties for which mortgage loans have been granted. The energy consumption is calculated based on energy labels as well as utility and energy sources. Thus, the calculation differs from the calculation for listed equities and corporate bonds.
At the end of 2023, the financial sector financed 5 million tonnes of CO2e via investments in mortgage bonds.
The financial sector finance 5 million tonnes CO2e via investments in mortgage bonds in 2023 (based on energy labels)
Note:
The financial sector’s financed emissions via investments in mortgage bonds, where the insurance and pension companies’ investments via funds (S.124) are looked through. Financed emissions from energy consumption calculated at the end of the year, i.e., 4th quarter. Emissions from mortgage bonds are available fromfrom the 4th quarter of 2022.
Source:
Danmarks Nationalbank, , MSCI, ISS and the European Covered Bond Label (ECBC).