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Swedish central bank sells bonds ‘for climate reasons’

Sweden's Riksbank has sold government bonds issued by Canadian and Australian states "for climate reasons", in one of the first cases of a central bank joining the global divestment movement.

Swedish central bank sells bonds 'for climate reasons'
The Bulga Coal complex in New South Wales, Australia. Photo: Glencore
Deputy Governor Martin Flodén revealed on Wednesday that the bank had in April divested itself of bonds issued by the Canadian province of Alberta, and more recently sold bonds issued by the Australian states of Queensland and Western Australia. 
 
“We will not invest in assets issued by issuers with a large climate footprint,” he explained in a speech at Örebro University on Wednesday.  “Australia and Canada are countries that are not known for good climate work. Greenhouse gas emissions per capita are among the highest in the world.” 
 
Flodén said the move followed a decision last year by the bank's executive board to take sustainability into account when making investment decisions. 
 
“We can contribute to the climate work to some extent by giving consideration to sustainability aspects when investing in the foreign exchange reserves,” Flodén said. “We are now doing this by rejecting issuers who have a large climate footprint.” 
 
Alberta's tar sands are some of the most polluting hydrocarbons in the world, while Queensland and Western Australia host some of the world's biggest coal mines. 
 
In a statement emailed to reporters, Christine Myatt, spokeswoman for Alberta Premier Jason Kenney, insisted that Alberta had the “highest environmental standards in the world”.  
 
“If the Swedish central bank is really concerned with making a difference on climate change they need to be investing more in ethical producers such as Alberta which have shown dramatic gains in reducing emissions,” she said. 
 
The City of Örebro was the first Swedish city to commit to pull its funds out of fossil fuels, following the example of cities like San Francisco, Seattle and the Dutch town of Boxte.

 
In his speech, Flodén said he had doubts about taking a more active approach to sustainability, and investing foreign exchange reserves directly “in particularly climate-friendly assets, such as green bonds.” 
 
Sweden's reserves, he explained, are currently invested solely in government bonds, something the bank was reluctant to change.  
 
“This is partly to hold down financial risks, and partly because monetary policy, apart from determining the general interest-rate level, should disturb pricing on the financial markets as little as possible.” 
 
This means that central banks can only have a limited role in pushing the world towards a greener economy, he said. 
 
“This is entirely natural,” he said. “The important decisions on how climate change should be counteracted in Sweden are political and should be taken by the government and the parliament.”
 

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SAMI

How Sweden’s Sami reindeer herders are being forced to adapt to climate change

The indigenous Sami people have herded reindeer in northern Sweden for generations, but climate change poses a new threat to their way of life and livelihood.

How Sweden's Sami reindeer herders are being forced to adapt to climate change
Reindeer pictured near the northern city of Kiruna. Photo: AP Photo/Malin Moberg

Once, the lynx, wolverines and eagles that preyed on their animals were the main concern for reindeer herders as they moved them to find food in the winter. But now Margret Fjellstrom and Daniel Viklund, a married couple from Sweden's indigenous Sami community with hundreds of tawny reindeer, worry about a new threat.

Shifting weather patterns in northern Sweden are forcing them to go further afield to find grazing for their hungry reindeer, pushing up costs and taking more time.

Dressed warmly in jackets and ski pants against the minus 17-degree-Celsius (1.4 Fahrenheit) temperatures, the couple watched on a February morning as their animals pawed through deep snow for the lichen they eat. It's their main food source in winter on the hillsides near Sweden's Baltic Sea coast.

Back when snowfall like this was a regular occurrence, Fjellstrom's herder parents would follow the same migration routes year in, year out, stopping at tried-and-tested spots for food. But that isn't the case now.

“It can rain in January, it can snow in May, there's no logic to it any more,” Fjellstrom, 39, said, sitting with Viklund by their snowmobiles.


Photo: AP Photo/Malin Moberg

Between 1991 and 2019, parts of northern and eastern Sweden saw a rise in average temperature of nearly two degrees C compared to the 1860-1900 period, Sweden's meteorological institute said in a report. For several days in early January, temperatures in the north climbed about 10C more than normal, the institute said. And on January 2nd, three weather stations in central Sweden reported their highest temperatures for the month since 1971.

Unseasonably high temperatures cause the snow to thaw and freeze again when the cold returns, building up thicker layers of ice that prevent the reindeer from digging down through the snow to the lichen.

To ensure they will find food during the migration, the couple spends two months taking turns to scout out unfamiliar areas, before setting off with the animals. Moving the reindeer from their summer pasture now often involves navigating them around motorways, windfarms or hydroelectric projects. The journey this year took nearly twice as long as it would have done in predictable weather, Fjellstrom said.

The Sami have herded reindeer across areas of northern Sweden, Norway, Finland and Russia for generations and are thought to number between 80,000 and 100,000, with many living above the Arctic Circle. In Sweden, only the Sami are allowed to herd the animals, raised for their meat, pelts and antlers.

Fjellstrom and Viklund annually move their herd from Dikanas, a village 800 kilometres (500 miles) north of Stockholm, to the plains near Ornskoldsvik. They transport them first by lorry, then release them and follow by snowmobile, tracking them using GPS collars.

Viklund watched as the reindeer disappeared into the snow-dusted forest, before launching a drone with a speaker attached into the freezing air above. It allows him to keep track of the animals when poor snowfall makes travel by snowmobile impossible. He can also herd them on with recordings of his dog barking when they head to areas with little food or hazards like roads or windfarms whose turbine noise scares the reindeer.

“We're getting more and more days that don't look like this, the snow is just a few centimetres,” he said. “It's a way to adapt.”


Reindeer herding on the Vindelälven river. Photo: Grahame Soden

Concerned that the animals get enough to eat, the couple split their herd and asked Fjellstrom's cousin to move the other half. It's an added expense for 31-year-old Neila Fjellstrom but he understands the need.

The Sami peoples and their reindeer are especially vulnerable to the effects of climate change, according to research. 

A “warming climate alters the vegetation conditions and threatens the reindeer's wellbeing and access to food,” Finland's University of Oulu and its Center for Environmental and Respiratory Health Research said in a study last year.

Many Sami are more worried about fluctuating temperatures now, than encroaching infrastructure, said Gunhild Rosqvist, a Stockholm University researcher into the effects of climate change in mountain and polar environments.

“I think their awareness of their vulnerability has increased a lot,” she told AFP.

At the annual Sami market in Jokkmokk above the Arctic Circle in early February, thousands of Sami mixed with tourists, just weeks before the new coronavirus forced countries around the world to introduce lockdowns. Reindeer products were proudly on display, from steaming pots of reindeer stew to soft pelts and knives with handles carved from antlers.

“Reindeer herding has been practised for many hundreds of years and it's an important part of Sami culture,” Kjell-Ake Aronsson, a researcher at the local museum, said. “Reindeer meat is an important product. A lot of people are related indirectly to reindeer herding.”

Sweden's Sami parliament estimates around 2,000 people are directly dependent on herding the country's 250,000 animals for a living. Away from the crowds, young Sami activists, in traditional outfits embroidered in blues and reds, gathered for a “climate strike” attended by Greta Thunberg.

Fjellstrom and Viklund's 17-year-old daughter Alva also spoke at the event and hopes to become a herder herself. But the increased effort needed for herding reindeer now makes Viklund worry about the future.

“I want to give my children the opportunity to do it,” he said, the sun casting long, blue shadows across the snow. “Climate change could destroy that dream.”

By Tom Little/AFP

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