“Sweden has long been the leading country in green bonds, and it is great to see that the government is now taking this step. I think we can expect investors to be eager to be part of the ambitious green investments that the Swedish government is making”, says Aaron Maltais, Program Director for the Stockholm Sustainable Finance Centre and Senior Research Fellow at the Stockholm Environment Institute.
The largest share of funding for the sovereign green bond will be allocated to maintenance and reinvestment in the railway system. Funds will also be allocated to innovative projects such as the Hybrit initiative for fossil-free steel production, a collaboration between SSAB, LKAB and Vattenfall, with the support of the Swedish Energy Agency. This project has the potential to revolutionise one of the most polluting industries in the world. The steel sector accounts for some 7% of global CO2 emissions and 10% of emission in Sweden.
The government has commissioned an independent review of the framework governing green bonds from Cicero, Center for International Climate Research. The rating given is the highest on a four-point scale, dark green.
“I expect that reporting from the Swedish government will maintain a high standard and be linked to Sweden's overall environmental objectives. This is important. Our latest research from SSFC, shows that all too often there is a disconnect between green bond frameworks and organisational level sustainability targets, and that there is still much variation in the quality of reporting. The more high-quality reporting, the better for the future of green bond markets”, says Aaron Maltais.