According to the World Bank and the UN, food speculation drives food prices prices up and pushes millions of people into poverty and hunger.
Nordea is responsible for the majority of investments in the so-called structured bonds based on food commodity prices that banks in Denmark provide their customers. Nordea is responsible for the DKK 1 billion (135 million euro) out of the DKK 1,4 billion (188 million euro).
But this will not be the case in the future.
Food speculation is not a responsible investment
When DanWatch and Tænk Penge in August 2011 inquired Nordea about the bank's position on food speculation, the bank was conducting an analysis and was awaiting a conclusion later that year.
Now the bank is ready with a position.
”In the latter half of 2011, Nordea decided no longer to offer this type of financial product for our customers,” says Klaus Fridorf, Director of Responsible Investment & Governance at Nordea.
Nordea's position has just been conveyed in the bank's annual report on responsible investments, published in March 2012.
”Our decision is based on a number of international analyses which show a correlation between increased speculation and volatile (and record high) food commodity prices,” says Klaus Fridorf from Nordea.
Nordea's bonds, which DanWatch has been investigating, are based on the world market prices of wheat, maize, among other crops, and expire in 2013. But already now Nordea says that the bank will not anymore offer customers this type of investment product that has basic foodstuffs as its underlying assets.