In all scenarios where climate targets are achieved, a transition of the food system is necessary. From the current animal-dominated one to a system where the emphasis is placed on plant-based food for humans instead of using crops to feed farm animals. In this transition, banks play an important role as it requires both advisory services and financing to transform the agriculture and our food production.
In the largest review to date of Danish banks’ actions when it comes to food production, the Vegetarian Society of Denmark, in collaboration with Rådet for Grøn Omstilling (the Council for Green Transition), Dyrenes Beskyttelse (Animal Protection Denmark), and Greenpeace Denmark has just released the report “The Role of the Financial Sector in the Transition towards a More Plant-Based Food System.” The report includes benchmarking of the 27 largest banks in Denmark and a thorough review of each financial institution’s actions and ambitions in this area.
The report shows that the vast majority of banks lack both objectives and knowledge in the field of sustainability within agriculture and food. Therefore, the green organizations also provide 10 proposals in the report on how banks can easily change their practices and future-proof food production through advisory services and investments in a more sustainable direction.
“Perhaps some bank directors need to attend courses on plant-based food production because right now many banks are completely failing their responsibility towards climate and the environment. If we are to succeed in securing the future of our agriculture, it is problematic to invest solely in technological quick-fixes that do not truly address the challenges we are facing. It seems like many banks fail to acknowledge the seriousness and the scientific fact that we need to reduce intensive animal production. The sector needs to wake up and realize that massive investments are needed for a genuine transition towards climate- and environmentally-friendly plant-based food production in Denmark,” Secretary-General Rune-Christoffer Dragsdahl of the Vegetarian Society of Denmark.
The green organizations behind the report consider it imperative for the Danish financial sector to set specific goals to contribute to this transition through financing and advisory services.
“It is about time for Danish banks to wake up to the reality that we are actually in the midst of a global climate and biodiversity crisis. Agriculture and food production are on a collision course with our own livelihood, and banks need to understand that continued loans and investments in industrial mass production of meat and milk, which we need to move away from, pose both a gigantic financial risk and a threat to our future and our children’s future,” says Kristine Clement, Campaign Manager for Agriculture, Forestry, and Nature at Greenpeace Denmark.
Positive initiatives are highlighted
Certain banks’ efforts are highlighted in the report to inspire other banks with good examples. For instance, Merkur’s strategy “Planterejsen” is a progressive way to implement the plant-based transition in the bank’s business. Sydbank’s financing of green transition, excluding animal production, is a good initiative in the investment field. And Nordea’s recognition that the future is more plant-based, although it could be clearer in the bank’s policies, is also a good first step. Similarly, Danske Bank’s disclosure of CO2e emissions from loans for crops and animal production provides transparency and enables measurement of progress over time.
However, these initiatives are small drops in the ocean, and overall, sustainability work in the financial sector still has significant shortcomings. For example, the banks that have started working on CO2 reduction in agriculture almost exclusively focus on technological quick-fixes such as feed efficiency and manure management, rather than prioritizing plant-based food production for humans, which is a far less climate- and environmentally damaging form of production.
“With a debt in agriculture of nearly 300 billion Danish kroner, banks have an incredibly large influence on its development. Therefore, it is disappointing to see that so few banks are equipped to advise agricultural customers on transitioning to plant-based foods, organic farming, or even better animal welfare. The climate, nature and agricultural animals are under pressure, and banks must contribute by pointing towards investments that are more future-proof and not just ‘business-as-usual’,” said Britta Riis, Director of Dyrenes Beskyttelse.
The report includes a chart outlining all 27 measured banks across more than 20 indicators. It also provides in-depth reviews of each bank, allowing you to read about what your preferred financial institution is doing – or not doing – for the development of agriculture in a more climate- and environmentally friendly direction.
The report is a pioneering project in the EU, and the lessons and results have been shared continuously with European partners. The hope is to conduct similar studies in other countries.