The
Position Paper on Green Bonds Impact Reporting, originally launched in October
2017 by a group of ten Nordic public sector issuers, has been published in an updated
version. The new version replaces the January 2019 version.
– We find great value in working together. Advancing impact reporting practices remains a priority for all of us, says Björn Bergstrand, Head of Sustainability at Sweden’s Kommuninvest and coordinator of the Nordic cooperation.
With the EU
Sustainable Finance Action Plan and the EU Green Bond Standard (EU GBS) soon to
become a reality, the Nordic issuers are anticipating even stronger interest for
a harmonised approach to green bonds impact reporting going forward. The group
aims to contribute to the development of a methodology in this field.
– While the EU GBS and
the Taxonomy are not yet in full force, certain recommendations have been added
to accommodate the suggested requirements, says Björn Bergstrand.
This includes
recommendations on providing both allocation and impact reporting, to distinguish
between financing and refinancing, and to report a breakdown of projects by the
nature of what is being financed. In addition, the Position Paper’s existing
mapping to the SDGs has been expanded to incorporate also the EU Environmental
Objectives.
The updated
recommendations will see the Nordic issuers report less CO2 impact,
in relative terms, from many of their financed green investments. This is
because the baseline emission factor for electricity has been revised
downwards, from 380 g CO2e/kWh to 315 g CO2e/kWh, to echo
updated grid factors from the International Energy Agency (IEA) and the International Financial Institutions
(IFIs), including the European Investment Bank (EIB) and the Nordic Investment
Bank (NIB).
Torunn Brånå, Head of Green Finance at Norway’s Kommunalbanken and chairperson of the cooperation’s technical/environmental working group, says the emission factor for electricity is a key assumption when calculating the environmental impact of the projects financed.
– Deciding on a joint approach for estimating the impact of electricity used, reduced or produced has been one of the important tasks of this group. Now, for the first time, the emission factor has been updated to reflect mainly a more ambitious expected decarbonisation of the European energy grids.
Torunn Brånå says revising the grid factor to result
in less reported CO2 impact is good news.
– This means the development of our
energy systems are going in the right direction. The revision will lower
the positive impact of energy efficiency projects and renewable energy
production, whilst reducing the negative impact of an increased use of
electricity, be it for electrical bus fleets or the operation of a project.
Although developed
with the primary aim of assisting Nordic public sector borrowers in reporting the
environmental impact from their investments, signatories also hope that the
Position Paper will prove useful for issuers from the private sector, issuers from
other countries as well as for the investor community.
– Resolving climate issues is at the heart of government agendas and policy papers all over the world, with various actors increasingly being expected to demonstrate their impact and climate actions. The financial industry has a key role in the transition, not least in providing robust and credible transparency to stakeholders, says Eeva Toivonen, ESG Analyst at MuniFin and the Finnish spokesperson for the Nordic cooperation.
The Position Paper has been developed by a group comprising public
sector green bond issuers from the four Nordic countries Denmark, Finland,
Norway and Sweden. They include the local government funding agencies Kommunalbanken
(Norway), Kommuninvest (Sweden) and MuniFin (Finland); the Swedish Export
Credit Corporation (SEK); and seven Swedish municipal or regional issuers
including City of Gothenburg, the municipalities of Lund, Norrköping, Västerås
and Örebro, Region Skåne and Region Stockholm.
The issuers’ work is supported by SEB and Crédit Agricole CIB, with input
from CICERO Shades of Green, the Nordic Investment Bank, as well as several
investors.
About the
Nordic Position Paper on Green Bonds Impact Reporting
The Nordic Position Paper
proposes an outline for reporting environmental benefits of green bond
investments. It also provides guidance on general matters such as to distinguish
between reduced and avoided emissions, as well as to report impact in relation
to disbursed green bond allocations.
Moreover, the Paper
provides suggestions for metrics and indicators relevant to eight different
project categories. The effort builds upon reporting approaches suggested by
the Green Bond Principles and multilateral development banks, as outlined in
the GBP Handbook – Harmonized Framework for Impact Reporting.
The Paper is used as the
reference framework for emerging impact reporting platforms such as the Green
Assets Wallet and the Nasdaq Sustainable Bond Network Platform. It is also
referenced in the proposal for an EU Green Bonds Standard, published by the EU
Commission’s Technical Expert Group on Sustainable Finance.
The Paper is available for download from the signatories’ web pages such as munifin.fi, kbn.com, kommuninvest.se and also from the ICMA Resource Centre for Green, Social and Sustainability Bonds, icmagroup.org.
Contact information
MuniFin
Eeva Toivonen, ESG Analyst, +358 504 643 073, email: eeva.toivonen@munifin.fi
Secretariat for the Position Paper and main contact for questions & comments
Kommuninvest
Björn Bergstrand, Head of Sustainability, +46 708 86 94 76, e-mail: bjorn.bergstrand@kommuninvest.se
Chairperson of the Nordic issuers technical/environmental working group
Kommunalbanken
Torunn Brånå, Head of Green Finance, +47 911 58 528, e-mail: tob@kbn.com