Baltic Green Bonds, EM Impact and Danish Dynamism
Stockholm (NordSIP) – Today we focus on green bonds, as Lithuania issues its first, which will be admitted to the Baltic Bond List by Nasdaq Vilnius and will have a maturity of ten years at a nominal value of €100. The green bonds are the first to be issued in the Baltic region, and funds from the issue will be used by Lithuania’s government to improve energy efficiency in apartment buildings. For this week’s Green Bond Review, NordSIP also met with Nordea‘s Anna Reuterskiöld, who shared valuable insights on the geenium and dampened our hopes somewhat for a burgeoning high yield market.
Meanwhile, Swedish state-led pension fund AP1 announced an investment in BlackRock‘s new Emerging Market Equity Impact Fund. Also in Sweden, Staffan Hansén and Åsa Wallenberg, CEOs of SPP and SPP Fonder respectively, challenge the Swedish government to set sustainability requirements for pensions and asset management in order to meet the missing capital for its climate initiatives.
Denmark’s government presented its new energy package last week in an effort to cover half of Denmark’s energy consumption with renewable energy by 2030. The plan includes reducing taxes on Danish electricity and the establishment of the largest-ever offshore wind farm in the country. Pending agreement for the plan in the Danish parliament, the Confederation of Danish Industry urged the government to go further. Meanwhile, Danish energy giant SEAS-NVE posted a bumper turnover for 2017, with the results positively influenced by the realignment of its investment portfolio towards sustainability and its emerging position as one of Denmark’s largest natural gas suppliers. Other investments include offshore wind farms and electrical vehicle chargers. Leca, a company that produces light clinker, a stony residue building material used in insulation material, drainage solutions and flowerbeds, among other things, is investing DKK100 million to make the product from waste wood instead of the 30,000 tonnes of coal it burns annually in order to offset CO2 emissions (NordSIP).
Heard on E-Street
Under pressure from the European Parliament (and influenced by the Nordics) to significantly boost 2030 renewable and energy efficiency targets, central European coal-dependent countries are resisting the toughening measures proposed in the European Commission’s Clean Energy Package for fear of endangering their economies (Politico). The engagement of India and the Nordics as a grouping, as opposed to bilaterally, demonstrated last month during Prime Minister Narendra Modi’s visit to Stockholm heralds a new era of cooperation that will help export Nordic expertise in clean technologies and environmental conservation to India, among other benefits (The Diplomat). Sustainalytics launched its new Carbon Risk Ratings, which measure companies’ exposure to and management of material carbon risks. The solution provides insights related to material investment risk that cannot be calculated through the traditional approach of carbon footprinting, and will inform the new Morningstar Portfolio Carbon Risk Score (Morningstar).
Question of the Week
Which Danish pension fund is set to exclude 1,000 fossil fuel companies worth DKK1 billion up to 2020?
Famous Last Words
“With the investments in companies violating human rights, pollution, corruption, or international law the UN is violating its own principles of responsible investment. It is irresponsible and a no-go to generate pensions from dirty profits for UN people [working] their whole life [to counter] the harmful impacts of companies violating social and ecological standards.” – Thomas Küchenmeister, managing director of Facing Finance, on revelations that the United Nations staff pension fund has around a billion dollars invested in companies whose activities are incompatible with core UN principles and programmes – such as the UN PRI. An analysis of the fund’s top 10 biggest shareholdings by Sustainalytics categorised them as either of “significant controversy” or “high controversy” despite the fund being awarded an A+ PRI rating last year (Guardian).
Always look behind you. Happy weekend,
Your NordSIP team
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