How are Nordic companies progressing on their climate goals?
Nordea's ESG research finds that while many Nordic companies have set ambitious emissions targets, only 35% have scope 1 and 2 targets aligned with the Paris 1.5°C pathway, and scope 3 progress lags. The desk sees this as a potential headwind for the Nordic currencies if regulatory pressure or investor scrutiny intensifies. Per the full note source, the SBTi validation is becoming more delivery-focused. There are no high-impact calendar events in the next 30 days for this jurisdiction, so the ESG theme may drive gradual positioning shifts rather than sharp dislocations.
What the desk is arguing
Nordic corporates are making uneven progress on climate goals, with only 35% of ~300 firms having scope 1 and 2 targets aligned with 1.5°C, and scope 3 alignment even weaker. Per the full note source, 25% of firms still lack any emissions targets, and SBTi is shifting focus from target-setting to delivery, raising the bar for future compliance.
This disparity could become a tailwind for currencies tied to more advanced ESG performers (e.g., SEK, DKK) if capital flows reward stronger transition profiles. The alternative read would be that current market pricing already discounts these slow efforts, limiting near-term FX impact.
Key takeaways
- 01Only 35% of Nordic companies have scope 1 and 2 targets aligned with 1.5°C pathway.
- 0225% of companies still have no emissions targets at all.
- 03SBTi validation is increasingly emphasizing delivery over target-setting.
- 04No high-impact calendar events in the next 30 days; ESG themes may drive gradual positioning.
Market implications
Watch for incremental FX flows into SEK and NOK if Nordic regulatory or investor pressure accelerates, particularly around quarterly ESG reporting cycles. SEK/USD and EUR/NOK may see modest drift rather than sharp moves given the absence of near-term catalysts.
Risks to this view
A rapid shift in SBTi or EU regulatory standards forcing more capex could weigh on Nordic equities and currencies. Conversely, a slowdown in regulatory momentum would remove the pressure, keeping FX ranges narrow.
Sustainable finance How are Nordic companies progressing on their climate goals? 18-09-2024 In a new analysis, Nordea Equities’ ESG Research team has assessed whether around 300 Nordic listed companies are aligned with and delivering on the Paris Agreement’s 1.5°C global warming limit. Many companies have set emissions-reduction targets and net-zero commitments. But how are they stacking up against the Paris Agreement pathway to limit global warming to 1.5°C above pre-industrial levels?
Our ESG Research team in Nordea Equities set out to track Nordic companies’ progress in a new analysis. The team examined the 1.5°C alignment of roughly 300 Nordic companies’ targets as well as how companies are delivering against their goals. Marco Kisic , Head of ESG Research and a co-author of the report, sums up the findings: “Many Nordic companies have ambitious targets and are delivering well against them.
But several still don’t have 1.5°C alignment in their targets and/or are not tracking well, especially on scope 3 emissions.” Committed to the SBTi The Science Based Targets initiative (SBTi) remains the go-to validation source for companies’ emissions-reduction goals. The SBTi rubber stamp is an important gauge used by many investors, explains Kisic. In 2024 alone, 32 companies in Nordea’s coverage universe acquired the approved status and more became committed to developing targets, although a few also have had their commitments removed. “SBTi is focusing more and more on progress tracking.
So while at this stage it’s mainly about setting ambitious targets, soon the pressure will increase on showing delivery,” says Kisic. It’s good to see that several of our large scope 3 emitters have scope 3 targets in place. But not enough of them are sufficiently ambitious.
Marco Kisic, Head of ESG Research, Nordea Assessing the 1.5°C alignment of targets Of the ~300 Nordic companies analysed, Kisic and his team found that 25% still do not have any targets. Only 35% have scope 1 and 2 targets aligned with the 1.5°C pathway. One positive note is that the largest emitters tend to have ambitious scope 1 and 2 emissions targets.
For this report, the ESG Research team introduced an implied temperature increase metric to make the results of their analysis more intuitive. Using that metric, they estimate, assuming companies fully deliver on their scope 1 and 2 targets, a temperature increase of 1.5°C for Nordea’s coverage universe. However, adding in scope 3, or value-chain, emissions radically changes the picture.
It can be difficult to target scope 3 reductions , due to challenges around measurement and responsibility. Many companies are still at the beginning of their scope 3 target-setting process. Around 50% of companies still have no scope 3 targets, and only an estimated 11% of companies have scope 3 targets aligned with the 1.5°C limit. “It’s good to see that several of our large scope 3 emitters have scope 3 targets in place.
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