Photo: Ninni Andersson/Government Offices of Sweden
The Government has decided to task the Swedish National Debt Office with issuing green bonds by 2020. These are bonds that are used to fund budget expenditure on sustainable investments and projects. This bond issue will promote the Swedish market for green bonds and is part of the Government’s action to transition to sustainable development.
Green bonds have previously been issued in Sweden by both private and public entities. By 2020, the State will also issue green bonds. The Swedish National Debt Office, responsible for government debt management, has therefore been instructed to analyse how the issue should be carried out.
“The decision that the State will now issue green bonds is an important part of the transition to sustainable development. The financial market plays a key role in this transition, and the Government wants to improve the opportunities for sustainable investments by promoting the market for green bonds,” says Minister for Financial Markets Per Bolund.
The Swedish National Debt Office has also been instructed to work with the Government Offices to develop the ‘green framework’, which will distinguish green bonds from conventional ones. The expenditure items in the central government budget that will be funded by the green bonds will be defined and selected in the framework. They will subsequently be monitored through a reporting requirement.
According to the assignment, the selection of appropriate green expenditures should be based on the climate policy framework and the Government’s climate and environmental policy, which is monitored through national work on the environmental objectives that is reported to the Riksdag.
“This assignment marks the start of the preparations needed for the bond issue, such as the selection of which budget expenditures should be included and appropriate maturity,” says Mr Bolund.
The assignment is part of the January Agreement, which is a policy agreement between the Swedish Social Democratic Party, the Centre Party, the Liberal Party and the Swedish Green Party.
The Riksdag has decided that the financial system must contribute to sustainable development. The Government is working to make it easier for investors and private individuals to take well-informed and sustainable investment decisions, and to improve information concerning risks associated with climate change and sustainability.
Efforts to promote the development of a sustainable financial market included instructing an Inquiry Chair to analyse the market for green bonds and present proposals on how it could be developed. The report ‘Promoting the market for green bonds’ was presented on 10 January 2018. The Inquiry’s assessment was that the single most important promotion measure would be the issuance of green bonds by the Swedish State.