Swedish City Launches Groundbreaking Framework for Sustainable Bonds, Pioneering Social Categories

Swedish City Launches Groundbreaking Framework for Sustainable Bonds, Pioneering Social Categories
As the first municipality in Sweden, Helsingborg is launching a framework for sustainable bonds that includes both environmental and social categories

In a groundbreaking move, the municipality of Helsingborg has unveiled a comprehensive framework for sustainable bonds, becoming the first municipality in Sweden to incorporate both environmental and social categories. This innovative initiative, a collaborative effort between the City of Helsingborg and municipally owned entities including Helsingborgs hamn (the port of Helsingborg), Helsingborgshem AB (the public housing agency), NSR (the recycling and waste management agency), and Öresundskraft AB (the energy company), aims to provide international and national actors with a concrete tool for investing sustainably from a broad perspective.

The framework encompasses a diverse range of investments, including renewable energy sources, waste solutions, and green transport. Equally important is the focus on social projects that uplift the standard of living within the city. By incorporating social categories into the bond, Helsingborg demonstrates its commitment to addressing societal challenges and promoting sustainable development holistically.

Nordea Asset Management, a leading financial institution, has enthusiastically embraced this new framework, purchasing the first sustainable bond issued under its auspices for SEK 500 million. Per-Erik Grahn, portfolio manager at Nordea Asset Management, expressed their support for Helsingborg’s sustainability efforts, stating, “We are delighted to once again be part of the City of Helsingborg’s innovative work in sustainable finance. We have previously supported the municipality’s efforts in climate change mitigation through their sustainability-linked bond and now see it as a positive step to deepen our collaboration by supporting the municipality’s green and social investments and assets.”

Lars Thunberg, municipal commissioner and chairman of the committee for quality of life, plays a pivotal role in coordinating Helsingborg’s sustainable development initiatives. He views the new bond as a crucial component in achieving the city’s long-term objectives. “It is incredibly gratifying and a validation of the innovative work we have been conducting in the city,” he stated. “As a Swedish municipality, we are particularly proud to be the first one to include social categories in the bond. To achieve the city’s goals, we need new thinking, and the framework will be an important piece of the puzzle in that work moving ahead.”

The framework sets a new standard by expanding the scope of traditional green categories, now encompassing green buildings. Helsingborg is committed to addressing the majority of emissions throughout a building’s value chain by establishing requirements for both energy performance and construction materials. Additionally, the framework incorporates climate adaptation measures, such as raising the ground level of Helsingborg’s port, to prepare for future climate impacts and ensure resilient port operations.

Furthermore, Helsingborg aims to finance future initiatives and activities consistently rather than focusing solely on completed investments. Henrik Frindberg, Environmental Director for the City of Helsingborg, emphasized the urgency of the framework, stating, “In 2022, Helsingborg was recognized as one of Europe’s 100 climate-smart cities by the EU. This award carries an obligation. If we are to achieve climate neutrality by 2030, we must further accelerate our efforts. Therefore, it is crucial that we have this framework in place now.”

To ensure transparency and accountability, the framework stipulates annual reporting on the utilization of funds and the achieved sustainability impacts. This project-level transparency complements previous frameworks that primarily focused on clear end goals for climate change.

Marcus Nilsson, Financial Director of the City of Helsingborg, highlighted the role of cities in driving the transition towards a more sustainable future. “Cities worldwide have a crucial role to play in driving the transition towards a more sustainable future. I hope that our framework can act as an inspiration to encourage investments leading to a more sustainable society,” he stated

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