Stockholm (NordSIP) – Nordea has launched a green loan programme, an initiative that means it will provide loans to promote sustainable investments amongst SME’s across several industries. While green bonds have been around for a number of years, this is the first such investment loan programme.
“We have over half a million small and medium-sized businesses as customers, and have regular interactions with them,” said Nordea chief of Nordic Business Banking Magnus Montan. “Sustainability is often highlighted, which indicates that demand for a product such as green loans is large and will continue to grow.”
The first customer to apply for green loans was K2A, an environmental housing provider. “To us, it is important to be sustainable across as much of our business as possible,” said Johan Knaust, K2A CEO. “The fact that we can now draw green loans means we can even green our financing, which is an important part of housing development. It is exciting to see the concept of sustainability finding new aspects of entrepreneurship.”
“Our green bonds and our cooperation [with K2A] became the incentive to launch the model for this loan programme, that we can now offer across several sectors,” Montan told Dagens Industri, the Swedish business daily. Nordea’s green bond was issued in 2017, providing a basis for green loans.
“The potential for green loans is big and growing,” he added. “Ever more want to make green investments and work sustainably, which is also a consumer demand. However, it is hard to determine the exact potential as we have just launched this and the market hasn’t matured yet.”
When a company applies for a loan, an internal evaluation is made by the bank to determine whether the loan can be classified as green. This is followed by an external evaluation relying on well-established environmental certifications approved by Oekom Research, Nordea’s independent auditor.
“The customer must be able to account for the positive impact the investment will have on, e.g., electricity or water consumption,” Montan added.
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