How are Nordic companies performing on ESG? Nordea's latest insights
The desk interprets the latest findings from Nordea on Nordic companies' ESG performance as indicative of resilience in a challenging economic climate. Despite an overall decline in environmental disclosure rates and slower progress in emission reductions, certain metrics, such as greenhouse gas emissions, have shown improvement, signaling continued commitment to sustainability. Per the full note source, Nordea's proprietary ratings for 300 companies highlight both advancements and hurdles, making it clear that navigating macroeconomic pressures remains critical. Market consensus may reflect a cautious optimism, particularly toward firms that connect executive compensation to ESG goals.
What the desk is arguing
The desk frames this as a sign that while Nordic companies are committed to ESG principles, the broader economic landscape is complicating progress. According to Nordea's research, the overall greenhouse gas emissions from their tracked companies have decreased by 11% year-on-year, indicating ongoing efforts towards sustainability despite external pressures.
However, the introduction of the Corporate Sustainability Reporting Directive (CSRD) has led to a slight dip in environmental disclosures, which is counterintuitive to the general trend of increasing transparency in ESG reporting. This drop from 73% to 72% in reported metrics suggests companies may be struggling with compliance amid economic headwinds.
Where it sits in our coverage
The consensus target for our tracked currencies currently stands at 1.075, with a range between 1.04 and 1.12 through various firms. Notable targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view aligns with jpmorgan's positioning, which is at the higher end of the spread, while bofa takes a more conservative stance.
How other firms see it
The perspective on ESG performance finds alignment with firms that emphasize sustainability as a core tenet of their futures, like jpmorgan and credit-suisse. However, firms like bofa remain cautious, expressing skepticism about the long-term viability of current strategies.
In related market contexts, the performance of the EUR/USD may reflect broader confidence in regions prioritizing ESG practices, especially amidst central bank dialogues on sustainable finance.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Nordea's ESG ratings show progress despite macroeconomic challenges.
- 02Greenhouse gas emissions fell by 11%, although disclosure rates declined slightly.
- 03Gender diversity metrics improved, with 64% of companies linking CEO pay to ESG performance.
- 04Firms must adapt to CSRD compliance while navigating economic headwinds.
Market implications
Traders should watch for indicators of ESG performance in Nordic currencies, particularly looking towards emissions reduction figures. A level of 1.075 could become a focal point as firms attempt to balance sustainability with economic realities.
Risks to this view
A significant reversal in ESG disclosure trends or a missed compliance deadline with CSRD could undermine confidence in Nordic firms' commitment to sustainability and hence negatively impact currency valuations. Additionally, unforeseen macroeconomic shifts could rebalance the current landscape.
Sustainability How are Nordic companies performing on ESG? Nordea's latest insights Marco Kisic 12-08-2025 Nordea Equity Research’s annual ESG ratings for approximately 300 companies reveal ongoing progress, but with noticeable impacts from challenging macroeconomic conditions. Nordea Equity Research annually publishes ESG ratings for the 300 companies in our universe, ranging from AAA to CCC, based on a proprietary model.
This year’s ratings, drawing from full-year 2024 reported data, indicate continued ESG progress, albeit with complications arising from economic headwinds and the introduction of the Corporate Sustainability Reporting Directive (CSRD) . The slower macro environment has, in many instances, reduced economies of scale, resulting in a higher environmental impact per economic unit. Furthermore, some countries and companies faced their first year of CSRD adoption.
Paradoxically, we observed a slight decline in environmental disclosure rates for the first time in our records, dropping from 73% to 72% of our collected metrics. Key ESG trend highlights Greenhouse gas emissions across the company universe continued to decline, with absolute emissions in Scope 1 and 2 down 11% year-on-year. However, this reduction partly reflects an overall slowdown in activity.
Emission intensity decreased by only 4% year-on-year, a slower rate than in previous years, mainly due to flat Scope 2 emissions. Water and waste intensity increased for the first time, although this could be partially attributed to the lower disclosure rate, potentially distorting the snapshot. Gender diversity remained relatively stable year-on-year for staff (34%) and boards (40%) but improved for management (now at 30%).
The median CEO compensation increased by 12% year-on-year, and more companies are linking their CEO compensation to ESG (64%, up from 44% last year). CSRD and disclosure trends Disclosure rates in our universe were affected for the first time by the introduction of CSRD in some countries, especially Finland and Norway. On the one hand, small companies continue to improve their reporting standards, sometimes from very low levels, which improves the overall average reporting rate.
On the other hand, 2024 marked the first year when some companies began to report in line with the CSRD. Often, this has translated to lower disclosure rates, as companies stopped reporting on metrics not considered material. Environmental disclosure came down slightly year-on-year, from 73% to 72%, for the first time in over a decade of tracking ESG metrics.
CSRD adoption was highest in Finland and Denmark and lowest in Sweden among the Nordic countries. Paradoxically, this reduced the comparability within our universe, particularly affecting the environmental and social metrics, including water, waste and sickness absence rates. Moderate ESG outperformance Our back-testing of ESG ratings against share price performance suggests that we are in a new phase of moderate outperformance for companies with better ESG ratings.
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