Stockholm (NordSIP) – The Swedish Government, whichever political constellation the upcoming elections result in, is expected to deliver a comprehensive long-term climate policy action plan in 2023. It has to address the question of how to accelerate the Swedish industry’s climate transformation and mobilise the private and public capital needed to do it. In preparation for this, last year, the current Government tasked the Swedish Agency for Growth Policy Analysis (Tillväxtanalys), in collaboration with several other government agencies, with producing evidence and advice on the topic.
The supporting agencies are now starting to deliver on their assignment, providing analyses, conclusions, and suggestions. On 12 August, the Swedish Environmental Protection Agency (Naturvårdsverket) published a report proposing specific measures to facilitate the supply of capital for the business sector’s climate transition.
A call for clarity and coordination
The analysis points out several shortcomings in the existing financial market framework that prevent the efficient flow of capital toward climate solutions. One of the obstacles quoted in the report is the lack of clarity as to what support is available currently. Although there are plenty of government mandates, schemes and other initiatives aimed at facilitating climate change adaptation, these are somewhat opaque and poorly coordinated.
Another hurdle is the lack of consistent and relevant data, methodologies, definitions, and standards. There is also a need to examine the various instruments for providing capital, such as grants, loans, guarantees and venture capital.
“A review of government instruments for providing capital to business for climate change adaptation is necessary to ensure that they are useful and effective,” comments Nadine Viel Lamare, Climate Analyst at the agency and one of the report’s authors. “It also needs to be clear who is responsible for assisting stakeholders with the interpretation of the regulatory framework, such as the EU taxonomy,” she adds.
The agency believes that Sweden should advocate for an expanded EU taxonomy that includes all activities that have an environmental impact and clearly defines investments in transformation.
A national platform for sustainable finance
One of the measures proposed by the Swedish Environmental Protection Agency is creating an authority-led national platform for sustainable finance. The platform would serve as a permanent forum for collaboration, bringing together initiatives aimed at the financial market and the business sector’s climate transition.
“Similar platforms already exist in the Netherlands and the UK, integrating climate policy with the financial market in different ways,” says Viel Lamare. “A first task could be to investigate what kind of data business and financial actors need for their climate reporting and investment decisions, and how the authorities who own the data can make it available,” she explains.
A work in progress
The Swedish Agency for Growth Policy Analysis is still collecting the analyses and recommendations from the supporting agencies. It is expected to submit the full report to the Government on 15 September.
Meanwhile, on 15 August, the Government Office held a press conference unveiling the results of their own inquiry into financing the green transformation of the industry. Karl-Petter Thorwaldsson, Minister for Business, Industry, and Innovation, and Max Elger, Minister for Financial Markets, presented a report compiled by Hans Lindblad, Kersti Karltorp and Martin Janhäll. According to their conclusions, building the cumulative knowledge and experience base about financing the climate transitions is a top priority. More resources seem to be heading towards the agencies tasked with investigating the topic, judging by the proposals of the government experts.