New Framework for Green Bonds in Forestry


    In connection with the opening of the Nasdaq Stock Exchange on October 27, Sveaskog CEO Per-Olof Wedin ringed the bell for the new green bond on the Nasdaq Sustainable Bond list.

    Stockholm (NordSIP) – Sveaskog, Sweden’s largest forest owner, has just issued its second green bond of a total of SEK 1 billion. For the occasion, Danske Bank was hired to design a new framework for the emission of green bonds in the context of sustainable forestry.

    For bonds to qualify as green bonds, they need to be designed to fund or refinance a specific type of environmental project. The proceeds of the bonds must support initiatives with proven benefits that can also be measured and reported to investors. Together, Danske Bank and Sveaskog have developed a new green bond framework based on the International Green Bonds Principles. The Norwegian quality assurance and risk management company DNV GL has given a second opinion on the result, taking into account Sveaskog’s forest production, certifications and nature conservation programs.

    The bond gathered much enthusiasm, and 22 institutional investors subscribed to the new issue. The interest from banks and institutional investors in lending to projects that contribute to green bonds is increasing. According to Danske Bank, in 2017, green bonds will account for approximately 10 percent of the bond market in SEK (Swedish state excluded). This year, Danske Bank alone has contributed to opening investing opportunities of more than SEK 5 billion in green projects and other environmental initiatives. In addition to Sveaskog, the bank has also raised green bonds for Svensk Fastighetsfinansiering (SFF), the Nordic Investment Bank (NIB) and to the Swedish loans & savings bank SBAB.

    In a press release in Swedish, Lars Mac Key, responsible for sustainable products within the Danske Bank Department of Credit Capital Markets, says he is proud to have received a vote of confidence from Sveaskog. He believes the new framework takes a broad approach to all aspects of the lifecycle, from sustainable forestry research and increased use of forest products to investments in FSC-labeled forestry.

    Per-Olof Wedin, CEO of Sveaskog, was pleased with the keen interest among investors. He sees this as an acknowledgement of Sveaskog’s business and of the visible impact an active and sustainable forestry has on the climate in the short- and long-term.

    Jonas Ranneby, Portfolio Manager of Sustainable Corporate Bond at Alfred Berg, one of the institutions who purchased Sveaskog’s new bond, considers that Sveaskog handles its forestry in the best possible way, based on extensive screening in the sustainability field.


    Pictures (c) – Danske Bank

    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA is Editor-in-Chief for NordSIP and Managing Director for Big Green Tree Media. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.

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