Sustainable financing solutions play a vital role in the transition towards a carbon‑neutral economy. At SEB, we work closely with our customers to support projects and investments that drive progress towards a more sustainable future.
At SEB, we are convinced that by supporting our customers, we can play our part in driving the transition towards a more sustainable economy. Achieving this change requires new thinking, innovation, financial support, and responsible lending to fund the necessary investments. Sustainable financing products are key solutions that enable us to support projects and investments that contribute to the transition towards a carbon-neutral economy in line with the Paris Agreement.
Concrete examples of these products include green loans and bonds, as well as loans and bonds with interest rates linked to sustainability targets. Green loans are granted to finance environmentally friendly projects and investments. In 2020, SEB’s green loan portfolio grew to €2.5 billion. SEB has also helped develop the sustainability-linked loan market, which has grown significantly in recent years.
SEB was involved in developing the first green bond together with the World Bank more than ten years ago. Our goal is to continuously innovate and develop this market. Over the years, we have strengthened our role as a global thought leader and proactively contributed to setting standards for this financial instrument. The latest trend is sustainability-linked bonds, which tie financing to a company’s sustainability targets, such as emissions. This type of financing offers companies a flexible funding channel, as the funds can be used for general corporate purposes, unlike green bonds, where funds are earmarked for predefined green projects.
Over the past five years, we have seen more and more companies integrate sustainability targets into their financing. In 2017, less than 5% of bonds were linked to sustainability, whereas by Q1 2021, the figure exceeded 15%. The main drivers of this change are investor demand and corporate transformation, with companies increasingly willing to commit financially to their sustainability goals. Bonds offer numerous benefits to issuers: the opportunity to highlight sustainability ambitions, increased investor demand, and a way to stand out from competitors. All these elements also lead to lower financing costs for the company.
We are here for our customers and are happy to discuss financing needs and suitable sustainable financing options.
Green Bonds are an investment vehicle that integrates the fiduciary element of Fixed Income products with climate awareness, giving mainstream investors access to environmental-related investment opportunities. Find out more at sebgroup.com.
SEB’s fund company integrates sustainability into all investment decisions – both to create value for our customers and because we, as an asset manager, have a responsibility to do so. At sebgroup.com we tell you more.
Our business is governed by a set of policies and instructions. Within the Corporate Sustainability area, we abide by, among others, the Sustainability Policy, the Environmental Policy and the Human Rights Policy. Find out more at sebgroup.com.
Reach out to us if you have questions regarding our sustainability work
Anssi Kiviniemi