Nasdaq Launches Sustainable Bonds Market

Stockholm (NordSIP) – Nasdaq Nordic has launched Nasdaq First North Sustainable Bonds, the first market focusing on sustainable bonds that can be socially or environmentally sustainable (by contrast with the green bond market that focuses almost exclusively on environmental sustainability). The launch follows the success of the Nasdaq First North Bond Market in 2017, with €1.7 billion raised (up 81 per cent from the previous year) bringing the total volume of sustainable bonds to €3.5 billion and the listing of nine bonds corresponding to an aggregate volume of €264 million.

This new market for green and sustainable bonds will aim to improve the possibilities for companies to attain external financing in a sustainable manner. To be eligible to list on the Nasdaq First North Sustainable Bonds market, issuers must comply with the sustainable criteria developed by Nasdaq together with Sustainalytics, a leading provider of ESG research and ratings.

The Criteria are comprised of four main components: 1) Use of Proceeds, in which funds raised in green, social or sustainable bonds need to go towards projects that deliver clear benefits to the environment, social welfare or both, 2) Third Party Review, which can include consultant reviews, verification, certification and rating and which must yield an adequate outcome, 3) Reporting of funded projects, ensuring transparency and focusing on the availability and frequency of satisfactory reports, and 4) Nasdaq’s reserved right to exclude or remove bonds from the sustainable bond market if they fail to meet the above criteria or which violate the UN Global Compact.

“In July 2017, the Swedish FSA [Financial Services Authority] revoked an earlier restriction for investment funds to invest in instruments admitted to trading on Nasdaq First North or similar MTF’s,” said Ann-Charlotte Eliasson, head of Nordic fixed income listings at Nasdaq. “By launching the Nasdaq First North Sustainable Bonds market, we hope that issuers will gain access to a wider pool of investors, while we at the same time are meeting an increased demand for green bonds among market participants.”

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