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PLACING STOCKHOLM ON THE MAP 

FOR SUSTAINABLE FINANCE

SHIFTING GLOBAL FINANCIAL FLOWS

Implementing the Paris Climate Agreement and the Sustainable Development Goals (SDGs) is expected to require tens of trillions of dollars of investments over the next 25 years. Since the Paris Agreement was finalised in 2015, much of the conversation has shifted to how countries are expected to finance the implementation of these climate targets. How do global financial flows need to shift to support the global sustainability agenda?

Being at the centre of these dynamics, financial actors, ranging from banks to asset managers, pension funds, multilateral funds and many others have a crucial role to play. This has materialised in a growing presence of the financial sector in climate and sustainability debates.

SWEDEN AND SUSTAINABLE FINANCE

In 2016, China’s G20 presidency set a new bar for green finance by establishing the G20 Green Finance Study Group (GFSG). The GFSG recommendations are the first G20 Leader’s Communique in sustainable finance. 

Sweden has been actively engaged with the G20 GFSG, both as an ‘observer’, via the Ministry of Finance, and as a ‘knowledge partner’, by sharing its insights and experience in green finance to date, drawing on a mix of private and public initiatives. 

Sweden has become a front-runner in sustainable finance in many ways: its financial institutions have been some of the first active in the green bond market (SEB, Nordea, Kommuninvest, Vasakronan), its research programs are widely covering the topic (MISUM, MFS, SSE, SEI, MISTRA, Wallenberg Foundation and VINNOVA), and its development agency, SIDA, is exploring public-private partnerships for sustainable investing

GREEN BONDS

The International Finance Corporation (IFC), part of the World Bank Group, has also been part of the G20 process, and recently partnered with asset management company Amundi to launch the world’s largest green-bond fund dedicated to emerging markets—a $2 billion initiative aimed at unlocking private funding for climate-related projects. 

The bond closed at $1.4 billion in March 2018. Within that context, IFC is investing up to $325 million in the Amundi Planet Emerging Green One (EGO) formerly known as the Green Cornerstone Bond Fund (GCBF), which will buy green bonds issued by banks in developing countries. Amundi will raise the rest from institutional investors worldwide and provide its services in managing emerging-market debt. The fund aims to be fully invested in green bonds within seven years. The GBCF program will link closely to the Sustainable Banking Network (SBN), a network managed by the IFC since 2012 and aimed at disseminating best practices and knowledge on sustainable finance. Outstanding green bond issuance stood at $221bn worldwide at the end of 2017, according to the Climate Bonds Initiative, amid a broader category of ‘climate-aligned’ bonds valued at $895bn.
All the above activities and expertise place Sweden on the map of sustainable finance. Especially Stockholm as its finance centre has a visible role to play in the international sustainable finance debate and can support the development of sound scientific research based financial instruments. Within this context, SSFC serves as a collaborative hub for Swedish experience, research, and leadership in the sector.

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