Sustainability analysis

Here you find our sustainability analysis. For example you find our Sustainability Indicators that assess the progress towards the UN Sustainable Development Goals.

Sustainability analysis

Stability and Sustainability: Steady Economies, Growing Headwinds

Sweden: Stable but cautious
Baltics: Growth diverges as inflation pressures build
Risks: Geopolitics, inflation, trade, competitiveness
Sustainability: Some progress, but challenges remain

War in the Middle East has heightened uncertainty and triggered an energy‑price shock, with fuel prices already rising sharply across Europe. If sustained, higher oil and gas prices could add further inflationary pressure. When renewable generation is low and imports are constrained, gas‑fired plants can set electricity prices, leaving the Baltics more sensitive to gas‑price swings. Despite increasing renewable generation, the Baltic countries’ smaller green‑energy share and storage capacity make them more exposed than Sweden. Even so, a prolonged conflict would likely lift Swedish energy prices as well, pushing inflation higher and weakening economic sentiment.

March 17 2026 Stability and Sustainability: Steady Economies, Growing Headwinds

ESG Focus: The EU’s CBAM: a climate tool with a broad impact

In January 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) began applying a levy on the embedded carbon emissions of selected imported goods. The world-first carbon tariff had been under discussion for years, and is designed to close the gap between companies that must pay for emissions within the EU and exporters operating under looser emissions policies elsewhere. While the near-term macroeconomic impact is expected to be limited, the effects on emissions and on specific sectors, such as agriculture, could be substantial.

January 2026 - ESG Focus: The EU’s CBAM: a climate tool with a broad impact. (To change the language, use the menu at the bottom of the linked page).

Progress and gaps since the Paris Agreement

A decade after the Paris Agreement, the EU has made progress in cutting emissions and increasing the use of renewables. But the path to the 2030 target remains tough. EU emissions are now about 35% below 1990 levels, but the pace of reductions will have to be doubled to reach the 55% target. The accelerating energy transition fuelled by record renewable investments contrasts with uneven progress in efficiency and circularity, highlighting Europe’s ongoing but challenging climate transition. Further investments may be crowded out by the strong focus on defence.

11 november 2025 - Progress and gaps since the Paris Agreement

The economic toll of climate extremes

3 september 2025 - The economic toll of climate extremes (pdf)

The ongoing global warming significantly increases the likelihood of extreme weather events, including heatwaves, floods and storms. Poor harvests and rising food prices are among the consequences of these events, which in turn means implications for monetary and fiscal policies. Total economic losses are spread across many sectors and continue to grow significantly. Yet the total financial impact in the Nordic and Baltic region has so far remained relatively limited compared to other EU countries. However, as Europe is warming faster than other continents, the risks of supply-chain disruptions and rising prices are likely to grow.

War vs. warming – will rising defence spending slow climate progress?

20 may 2025 - War vs. warming – will rising defence spending slow climate progress? (pdf)

In Europe, defence and security have moved to the forefront of political and economic priorities. Some security-related projects, such as sustainable infrastructure, may support the green transition but rising geopolitical tensions risk diverting attention and resources from climate targets. Indeed, green investment momentum appeared to slow in 2024, and we should not be surprised if it slows further in the years to come.

Stability and Sustainability - Some progress here and there

2024 Q4 - Stability and Sustainability - Some progress here and there (PDF)

The Baltic countries have moderately improved their environmental, social, and governance (ESG) policies. The most significant challenges remain in Latvia and Lithuania, especially in social and governance areas. Sweden edged up in governance (despite lacking governmental policies) and overall performs better than the Baltics, but could do more in the environmental protection area.

A potential trade war and low European competitiveness (as described in Mario Draghi’s report) are pushing the EU to loosen green policies for companies. While these decisions may help competitiveness in the short run, they also risk reducing transparency and slowing progress across all Sustainable Development Goals (SDGs).

Critical minerals, critical power

January 2025 Critical minerals, critical power (PDF)

China is the dominant force in the mining and production of rare earth elements and other critical raw minerals, occupying a pivotal position in the global supply chain. As geopolitical tensions intensify, the EU and the US are seeking to secure their supply of these critical materials. The Nordic countries have a significant potential for advancing the future supply of metals and minerals and are key to diversifying EU supply.

Increasing emissions and green transition delay

November 2024: Read more here, on page 26 (PDF)

What will the outcome of the presidential election mean for US climate policy, and how will it affect global climate efforts? President-elect Donald Trump is expected to increase production of fossil fuels and is expected to impose trade barriers that are likely to delay the green transition and increase US emissions in the near term. However, the business sector and state politicians may counteract these actions.

As temperatures rise, so do the costs

August 2024: Read more on page 40 here (PDF)

Global climate conditions deteriorated further this summer, with record-breaking temperatures and an escalation in extreme weather events. The effort required to reverse these trends, unfortunately, grows more daunting with each passing year. The economic impact is significant but varies across Europe. A new trend in tourism is attracting attention for its potential economic benefits – but the measurable effects seem small.

Stability and Sustainability - Brighter outlook but risks remain

2024 Q1: Read the full analysis/report here (PDF)

Sweden: Stagnating economy
Baltics: Recovery with remaining divergences
Risks: Geopolitics, protectionism, competitiveness, and monetary policy lags
Sustainability: Large divergences and insufficient progress

The Swedish economy surprisingly rose in the first quarter. However, most of the increase was explained by positive contribution from inventories, which is not necessarily a sign of strength. Also, residential investments continued to fall, and household consumption was weak. The main surprise came from higher-than-expected business investments. Also, the labour market continued to deteriorate. All in all, real economic data were in line with our expectations.

As we expected, the Riksbank stayed on hold in June, after delivering the first rate cut in eight years in May, when it cut the policy rate to 3.75%. We expect the Riksbank to cut the policy rate three additional times this year, with the next cut in August. Although now on a declining path, mortgage rates are expected to remain quite high for the rest of the year, which will continue to hold back housing prices.

The Latvian and Lithuanian economies have started 2024 on a strong footing – GDP in both countries grew by almost 1% in the first quarter. The Estonian economy was still shrinking, but there are signs that recovery is very likely in the second half of this year. Inflation has fallen below 1% in Latvia and Lithuania but is still slightly elevated in Estonia, mainly due to tax hikes at the start of this year. The main source of growth this year is likely to be the recovery of household consumption, as household purchasing power is increasing rapidly.

In the Baltics, wages continue to grow more rapidly than productivity, and governments are reinforcing labour cost growth by possibly excessive minimum wage increases. Rising unit labour costs in the Baltics may start denting international competitiveness and could hurt export recovery. Although Baltic labour costs are still well below the EU average level, they are higher than in several Eastern and Southern EU countries. The impact on export market shares seems limited so far, but productivity-boosting reforms and investments are needed to keep Baltic economies on a sustainable growth path.

Progress in achieving sustainable development goals (SDGs) has stalled and is insufficient to achieve all 17 SDGs by 2030. The Baltic countries exhibit stark within-country inequalities. Governance issues are also pressing and require a lot more progress. Estonia and Latvia are catching up with respect to environmental protection goals, but Lithuania is lagging and needs to step up its game. In Sweden, despite significantly better performance across SDGs, challenges also remain.

ESG bond market leads the economic recovery

Last year the market for sustainable bonds in SEK grew at a record pace and 2024 looks to be another strong year with new records in sight. Investments in the business sector made the main contribution to the increased volume of sustainable investments, and the market share has increased substantially since 2018. The NATO membership is expected to increase pressure for infrastructure investments, which may favour the green transition in the longer term, but there is also a risks of crowding out other investments.

April 2024 - Read the full analysis/report on page 28 (PDF)

Europe – an energy race on two fronts

The EU’s renewable energy capacity reached an all-time high in 2023, and in July, the EU raised its binding renewable energy target for 2030 from 32% to a minimum of 42.5% of the total energy consumption. Thus, the EU is taking crucial steps towards a more sustainable economy. With the world investing record amounts in renewable energy and thus in the green transition, there is one "but". Expanding renewable energy is not the only energy race that is underway. EU member states, especially those previously more dependent on Russian gas, have also invested billions of euros in building new liquefied natural gas (LNG) terminals and have experienced a significant increase in LNG imports. This energy race on two fronts may delay the transition.

January 2024: Read more on page 17, in the report Swedbank Economic Outlook (PDF)

Easing inflation, ebbing growth

Sweden: Continued winter blues in economic activity
Baltics: Rising purchasing power but weak exports
Risks: Tight financial conditions, higher unemployment, geopolitical tensions
Sustainability: Continued improvements are needed

2023 Q3: Read the full analysis here (PDF)

The dilemma of public debt in a warming world

In the wake of recent extreme events, such as the Covid-19 pandemic and Russia’s invasion of Ukraine, governments have been called upon to adopt a “whatever it takes” approach to assist citizens and companies in weathering the impact of these events. This has resulted in larger fiscal deficits in most countries, and now many of these countries are facing high debt, rising interest rates, and weak growth prospects. Also, public finances will likely be put under even more pressure in the years to come, due to ageing populations and increased defence spending. This situation is challenging and could weigh on efforts to tackle the climate crisis. Read more here.

November 15 2023: Read the full analysis here

Raging storms, rising costs

The surge in surface temperature is escalating the likelihood of extreme weather events, such as heatwaves, floods, or storms. To date, the realised economic losses in the Nordic and Baltic regions have been relatively limited within the broader European context. Nevertheless, the greatest risks originate from external sources, such as supply chain disruptions and increased product prices.

August 22 2023: Read the full analysis and macro focus here (PDF)

Stability and Sustainability - Baltic and Swedish economies in doldrums

Sweden: Economic growth has weakened
Baltics: Insufficient demand and falling inflation
Risks: Even weaker demand, higher unemployment, geopolitical pressures, deglobalisation
Sustainability: Continued improvements are needed

June 27 2023: Read the full analysis/report here (PDF)

Inflation Reduction Act – a blessing or a curse for global growth?

As the global economic cycle is making a downturn, there is growing concern about how countries could boost growth going forward. Investing in the green transition not only serves as a crucial step to curtail global warming but also represents a way to boost economic growth. Industrial policy such as the US Inflation Reduction Act (IRA) is a current example. However, while industrial policy can be a powerful tool for promoting economic growth, it may also create barriers to trade and thereby harm growth. Here’s a short Q&A on the IRA and the EU response, followed by our analysis.

Q&A US Inflation Reduction Act (IRA)

What is the IRA?
The IRA is a government bill and climate law, considered to be the most significant climate legislation in US history, allocating $400 billion (1.5% of nominal GDP in 2022) in federal funding over 10 years. Enacted in 2022, the primary objective of the law is to accelerate the transition to a greener economy by curtailing carbon emissions, promoting domestic production of clean technology and countering China’s dominance in this area. It also aims to fight inflation by, e.g., reducing energy costs, hence the bill’s name. Yet, while it will boost manufacturing in the US, it poses a series of possible risks.
Follow the link below to read more.

April 24 2023: Read the full analysis/report here (PDF)

How inflationary is the green transition?

Larger inflationary impulse if the transition is delayed

Greenflation is an inflationary demand shock following from the green transition
Price-effects of a gradual transition are limited, compared to the current high-inflation setting
If the transition is delayed, the annual inflationary-impulse risks being three times larger
Greenflationary pressures can be largely unequal between countries, hurting countries that have more to do in order to reach the 2030 and 2050 climate-targets

Stability and Sustainability Report

How well are we prepared for the winter?

Sweden: Economic growth continues, but resilience starts fading
Baltics: Fading growth, quarter-century-high inflation
Risks: Recession, inflationary pressures, gas disruptions
Sustainability: Some improvements, but a lot more needs to be done

The Swedish economy expanded faster than expected in the third quarter. The labour market has remained strong, but labour shortages have started easing. Amidst stubbornly rising headline and core inflation, the Riksbank increased its key interest rate by 75 basis points in November. Rising mortgage rates and a merciless cost-of-living shock have led to a 12.5% decline in housing prices since February 2022.

The Lithuanian economy surprised on the upside and continued growing in the third quarter, while the Latvian and Estonian economies contracted. Labour markets in the Baltic countries have remained strong, but the purchasing power has dropped. Consumption is weakening, and cost pressures and weakening demand are weighing on corporate profits. Inflation has started to retreat across the Baltics, helped by fiscal measures, easing external cost pressures, and weakening demand.

Risks to the economic outlook are tilted downwards. More severe scenarios are possible, especially if this winter is colder and longer than average, and there are difficulties in filling up European gas storages ahead of the next winter.

The energy crisis is spurring investments in renewables and energy efficiency. However, in the short term, natural gas is being replaced by dirtier alternatives, increasing emissions. The cost shock is hitting the least well off disproportionately hard.

Q3 2022: Read the full analysis/report here (PDF)

China’s green transition

Climate policy – will China reach its goals?

Reaching peak emissions by 2030 and carbon neutrality by 2060 might not be enough
Remarkable achievements are being made in the areas of clean energy and electric vehicles …
… but the transition away from coal dependency is a challenge

21 December 2022: Read the full analysis/report here (PDF)

Swedbank Economic Outlook - October 2022

EU-electricity generation affected by extreme weather in an already sensitive situation

Europe has been in an energy crisis following Russia’s invasion of Ukraine and the rapid decline in natural gas imports from Russia. In addition, over the course of the year, the situation has been aggravated by other factors that have led to reduced electricity generation. In Europe, the summer has been characterised by heat waves and drought. At the same time, planned maintenance stops have caused further trouble.

October 2022: See more, page 14 (PDF)

Swedbank Economic Outlook - August 2022

Energy crisis pushes European economies towards stagnation

The ongoing war in Ukraine is being accompanied by an economic conflict between Russia and the Western allies. As sanctions increasingly wreak havoc in the Russian economy, the Kremlin has decided to use its economic weapon – natural gas. Many European countries rely heavily on gas for heating in the winter months and for electricity production.

August 25, 2022: Read more on page 12 (PDF).

The energy crisis creates incentives for transition, but may also create obstacles

The EU and the world are in the midst of a transition to reduce greenhouse gas emissions and to slow global warming. The ongoing energy crisis in Europe and the war in Ukraine are putting pressure on the situation. In the short term, emissions appear to be increasing. In the longer term, the energy crisis should incentivise further investments in the energy transition.

August 25, 2022: Read more on page 17 (PDF)

The economics of extreme weather events

Nordic and Baltic economies relatively spared so far

The impacts of extreme weather vary across geographies, across sectors, and, thereby, across countries. Water and waste, agriculture, transportation, and tourism are among the sectors affected the most.
Globally, the direct costs of extreme weather events are on the rise and have amounted to around EUR 100 billion every year since 2010.
Moreover, although indirect costs from extreme weather events, such as reduced economic activity, supply-chain disruptions, and health effects are harder to quantify, studies suggest that they could be an additional multiple of direct costs ranging from 1.5X to over 10X.
Nevertheless, the Nordic and Baltic economies have been relatively spared so far, incurring quite small losses due to extreme weather events. However, the costs are expected to increase as climate change intensifies, affecting more parts of the globe.
Large-scale investments will be necessary to enable the global economy and societies to mitigate the risks from extreme weather events. Upward price pressure and capital losses are also likely.

17 December 2021: Read the full analysis/report here (PDF)

What happens in Glasgow?

The projected path for global warming leads to 2.7°C by the end of the century, and not 1.5°C as is the goal.
This year’s UN conference on climate change is important since the countries will present how they plan to limit their carbon footprint, as promised at the Paris agreement.
Four goals will be the main focus: mitigation, adaptation, finance and collaboration. The goals seem far from reachable given the current situation.
Dual investments are needed to curb further emissions and to adapt to climate change that is already occurring.
The current global energy crisis has accentuated the need for clean and stable energy production and could increase incentives for investing in green energy sources.

28 October 2021: Read the full analysis/report here (PDF)

Swedbank ESG monitor: Carbon pricing speeds up structural change

Sustainable development indicators show that all the Nordic and Baltic countries have a long way to go to reach the 2030 Sustainable Development Goals. At the sectoral level, especially utilities and transport, agriculture and forestry have high emission intensities in many Nordic and Baltic countries.

For the world to reach net-zero emissions, a higher price of carbon is needed. This would have the largest impacts in carbon intensive and export-reliant sectors in mining and manufacturing, utilities and transport. Transition risks are considerable in the Nordics and Baltics, although most of them have an emission intensity below the global average.

23 June 2021: Read the full analysis/report here (PDF)

Climate change and central banking: Protection of price stability the minimum requirement

Central banks are starting to factor in climate change. Adjustments to monetary policy operations may be necessary, and they are possible within the ECB’s and the Riksbank’s mandates. Green tilting of asset purchases can be motivated, but not as a major climate policy tool.

31 May 2021: Read the full analysis/report here (PDF)

The green taxonomy: a driver for the transition

The EU’s green taxonomy and disclosure regulation will reduce greenwashing and speed up the green transition. We expect the effects on interest rates to be modest in the short term, but the impacts on stock prices and long-term funding costs could be considerable. Overall, the Nordics are in a good position to gain, with some sectors losing out. The effects in the Baltics will be smaller in the near term.

15 March 2021: Read the full analysis/report here (PDF)

Another big year for the EU’s green policy

Despite the crisis, the EU approved a wave of green reforms in 2020. 2021 will be crucial for their implementation. If all goes according to plan, the reforms will support green investments, push up the price of carbon and continue to move the markets towards green assets.

1 February 2021: Read the full analysis/report here (PDF)

A key election for the planet

Climate policy constitutes a major difference in Trump’s and Biden’s agendas. Biden’s plan includes large green investments and a Democrat victory would support green tech industries globally.

24 September 2020: A key election for the planet

Sweden’s green recovery: Closer but not quite there yet

The Swedish budget proposal for 2021 contains measures that will support a greener recovery, but direct support remains relatively modest compared to Nordic peers.

Among the Nordics, Sweden’s spending lines up the most with Finland, as both countries have prioritised the transport sector.

21 September 2020: Sweden’s green recovery: Closer but not quite there yet

No green recovery so far

Green investments account only for a tiny share of global stimulus announced so far. Announced green stimulus in the Nordics and Baltics varies widely, with Denmark in the lead.

27 August 2020: No green recovery so far

Swedish Green Bond: Time for issuance

The Swedish government’s first green bond is an important political signal and will support spending towards Sweden’s environmental targets. Given the state’s increased borrowing needs, the timing of the green bond issuance is good.

24 August 2020: Swedish Green Bond: Time for issuance

Swedbank’s Sustainability Indicators show more progress is needed

Will the EU's recovery fund help in reaching targets?

25 June 2020: Swedbank’s Sustainability Indicators show more progress is needed (PDF)

A greenish recovery

Political momentum and cheaper renewables support a greener crisis recovery in Europe. The Nordics are on the right track, but more is needed.

22 June 2020: A greenish recovery

Green protectionism - threat or opportunity?

21 January 2020: Green protectionism – threat or opportunity? (PDF)

Macro-ESG: Falling short on sustainability

All Nordic countries are falling short of reaching the green and social targets by 2030. Governance continues to be a strength of the Nordics, but green and social investment is crucial for further growth.
21 November 2019: Macro-ESG: Falling short on sustainability (PDF)

Central banks and climate risks

14 March 2019: Central banks and climate risks (PDF)

Macro-ESG: Falling short on sustainability

Sustainability analysis