The three biggest banks in Denmark are profiling themselves as socially responsible and have subscribed to the UN endorsed principles for responsible investment. Danske Bank and Nordea have furthermore subscribed to the UN Global Compact, which states that companies should support and respect the protection of internationally recognised human rights and avoid contributing to violations of these.
According to the UN Universal Declaration of Human Rights and the UN convention on economic, social and cultural rights, all humans are entitled to food. Nevertheless, the three major banks do not consider speculating in food a problem. The banks do not include food speculation in policies on social responsibility and do not inform their customers that speculation in itself can make food prices rise or fall.
Nordea without a position
With DKK one billion (approx. 130 million euro) invested, Nordea is responsible for the majority of investments in structured bonds backed by agricultural futures that the largest banks in Denmark offer their customers. The bank also does not inform its customers how food speculation affects the price on food. In 2004 Nordea joined the UN Global Compact, which, among other things, is based on the UN's human rights, which state a right to food.
”Social responsibility is a regular consideration when we launch a product. When a debate like this one about food takes place, and when a UN organisation issues a new report on the subject, as has just happened, then we listen to it and look into what Nordea provides and stands for”, says Chief Communications Officer Claus Christensen.
But the last three years' reports from UN institutions, the World Bank and renowned experts have not yet prompted Nordea to consider the negative consequences of food speculation. ”We are in the midst of analysing the issue and expect to have a conclusion ready later this year”, says Claus Christensen from Nordea.
Jyske Bank: ”We don't believe that food speculation is a problem”
According to Head of Department Henning Mortensen, Jyske Bank follows closely the debate on whether food speculation, through investments in raw materials price indexes, lead to rises and falls in food prices. He points out that the UN does not have definite conclusions on the matter: ”According to the UN Conference on Trade and Development, UNCTAD, investments in raw materials price indexes, including food commodities, did not create the price bubble in 2008, but reinforced it. But the UN's conclusion is not clear about the causes of this”, says Henning Mortensen.
”We don't believe that food speculation is a problem. There are other, more significant factors that affect the formation of food prices in developing countries. This could, for example, be political factors such as the Russian ban on wheat exports, decisions to use bioethanol in fuel, wars. And it can be climate factors, poor harvest yields and population increases”, says Henning Mortensen.
Jyske Bank has not joined the UN Global Compact since it does not want to be limited by certain conventions. As an exception Jyske Bank last year joined the UN endorsed principles for responsible investments, UN PRI.
Danske Bank awaits further conclusions
Danske Bank regularly keeps up to date on studies being conducted but does not inform its customers about the issue since, according to the bank, no study has yet reached definite conclusions.
”We lack definite conclusions on this issue although it is being researched more and more. The research on the issue points in several direction. That there are correlations doesn't mean there is a causality. And it is about evidence”, says Thomas H. Kjærsgaard, Head of CRI and Corporate Governance.
Danske Bank joined the UN Global Compact in 2007 and the UN endorsed principles for responsible investments in 2010.