Stockholm (NordSIP) – As the EU’s sustainable finance regulations begin to come into effect, the need for specialist advisors who understand the new rules becomes increasingly important for their successful implementation by financial institutions.
Few people are likely to be as well-suited to this task as Åsa Knudsen Sterte (Pictured) who joined SEB as a Senior Advisor at SEB Climate & Sustainable Finance in February. Prior to taking this new role, Knudsen Sterte worked as Deputy Director and sustainability coordinator at Sweden’s Ministry of Finance. In that capacity, she represented the Swedish government as a member of the High-Level Group (HLG) on Financing Sustainability Transition.
Moving Back to the Private Sector
As a member of the HLG, she actively participated in the negotiations behind the Sustainable Finance Disclosures Regulation (SFDR) and on the Taxonomy. According to Knudsen Sterte, she was also the Ministry of Finance’s point person for developing the green framework for the issuance of the state’s first green bond, where she collaborated with SEB.
Knudsen Sterte has also worked at the Riksbank and the National Institute of Economic Research. In the private sector, she worked as an institutional account manager at Handelsbanken between 2005 and 2007, followed by almost another two years as a financial consultant at Agenta.
“It is a privilege to now get the opportunity to implement in practice the regulations I have been part to develop,” Knudsen Sterte says. She chose SEB because of the banks’ embrace of sustainability not as charity, but rather as a necessary condition for creating future financial returns and a positive economy, Knudsen Sterte explains. At the bank, her responsibilities will focus on customers with products such as sustainability-linked loans and bonds, green bonds and social bonds, she adds.
SEB’s new advisor also hopes to be able to contribute to customer dialogue. In this task, she is encouraged by the fact that the bank’s employees worked with the taxonomy at the expert-group level, as well as people who developed the Impact Metric Tool model to analyze portfolios based on the taxonomy.
Momentum for Sustainability-Linked Products
According to Knudsen Sterte SEB has seen rising demand for sustainability-linked products both in bonds and loans. “I definitely believe that the linked products are good complements to the more established use of proceeds products as it widens the flora of sustainable products to cater for different financing needs and situations of companies,” she tells NordSIP.
“SEB was one of the coordinators of the ICMA working group behind the development of the Sustainability-Linked Bond Principles (SLBP) which provide international market guidelines for the structure of an SLB and corresponding principles for sustainability linked loans (SLL) has been developed by the Loan and Market Association (LMA),” Knudsen Sterte adds.
“Crucial for the development of this market would be to adhere to these principles and ensure that the selected KPI:s and the related targets are really relevant, core and material to the issuer’s overall business and reflects a true high ambition in their sustainability strategy going forward. This is the way to create confidence and trust in these instruments and to avoid the reputational risk of greenwashing. This is also where we as a bank have the opportunity to be a constructive speaking partner to our clients. This would even be of extra importance in the loan market where the transparency requirements are less than in the public bond market,” she says.
Balancing the Regulation
Considering the recent EU sustainable finance regulations that came into effect and the path ahead for market regulators, Knudsen Sterte acknowledges that “there are going to be plenty of challenges for authorities and regulators going forward.”
“The obvious one now for the Commission would be to balance the delegated act for climate and adaptation in taxonomy regulation between the requirements in the level one text, the scientific analysis behind the technical screening criteria and the political pressure from member states and different industry sectors fearing they will be cut-off from finance,” she explains
“My personal view is that while there are room for improvements in the draft presented by the Commission last year, parts of the criticism stem from misunderstandings on the envisaged use of the taxonomy. In this context I believe the forthcoming advice from the sustainable platform on how the taxonomy could promote transition will be crucial,” she concludes.
Image courtesy of SEB