Institutional investors, pension funds, and banks exclude companies for human rights, health, and sustainability violations. The most common reasons are links to fossil fuels, weapons, or tobacco.
At the same time as the last day of the Building Bridges Conference in Geneva on sustainability and the financial center, an international NGO coalition has launched the new version of the website «Financial Exclusions Tracker». The international «Financial Exclusions Tracker Initiative» has launched the second edition of the website «Financial Exclusions Tracker». The initiative aims to inform investors, banks, the media and civil society about which companies are already excluded from financing and investment by other financial institutions and for which reasons.
Pressure on the companies concerned to be increased
Institutional investors, pension funds and banks around the world often unwittingly support companies that cause environmental destruction and human rights violations through their investments. «Financial institutions are well advised to consult the new Exclusions Tracker as part of their due diligence procedures for new and existing clients. The Exclusions Tracker is intended to increase the pressure on affected companies to improve their business practices. It also helps to increase transparency among investors and banks and to encourage them to make their exclusion policies public», says Asti Roesle, Head of Financial Sector and Climate at Klima Allianz.
Glencore is the most frequently excluded Swiss company
The tracker lists a total of 5'536 groups of companies (with 66'708 subsidiaries) from 135 countries that are excluded by 93 financial institutions in 17 countries. Some 40 companies based in Switzerland are also on the list. Glencore leads the list of excluded Swiss companies. The new version of the tracker provides an updated overview of financial exclusions and includes even more investors and companies. What is new is that the excluded sectors are also listed.
Negative climate impact most cited reason for company exclusion
The most common reason for excluding companies is climate/fossil fuels (48%), followed by arms (15%), tobacco (13%), country politics (e.g. exclusion of Russian companies) (6%), product-related exclusions (e.g. alcohol, gambling) (5%), human rights (4%) and business practices (e.g. corruption) (3%).
Companies in the fossil energy industry are strongly represented not only in the climate category, but also in the categories of human rights violations and controversial business practices.
Investors, governments and civil society stakeholders can use the tracker to scrutinize and act on the companies identified by other financial institutions as posing the greatest environmental, social and governance (ESG) risks.
About the Financial Exclusions Tracker
The Financial Exclusions Tracker is an initiative of: BankTrack, Both ENDS, Fair Finance International, Forests & Finance, Health Funds for a Smokefree Netherlands, Milieudefensie (Friends of the Earth Netherlands), PAX, Profundo Research Foundation, Rainforest Action Network, and the Environmental Paper Network.
