Impact Report 2018
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STOCKHOLM COUNTY COUNCIL GREEN BOND IMPACT REPORT 2018 STOCKHOLM COUNTY COUNCIL GREEN BOND IMPACT REPORT 2018 1 TABLE OF CONTENTS 3 GREEN BOND IMPACT REPORT, MARCH 2018 4 EXECUTIVE SUMMARY 6 COUNTY COUNCIL’S ENVIRONMENTAL PROGRAMME 2017–2021 6 STOCKHOLM COUNTY COUNCIL’S GREEN BONDS 7 STOCKHOLM COUNTY COUNCIL’S FRAMEWORK FOR GREEN BONDS 7 IMPROVED FUTURE REPORTING ON GREEN BONDS 8 FEEDBACK ON THE GREEN BONDS AND GREEN FINANCE 9 INVESTOR MEETINGS 10 STOCKHOLM COUNTY COUNCIL’S PROJECTS FOR GREEN INVESTMENTS GREEN BOND IMPACT REPORT, MARCH 2018 “Stockholm is experiencing rapid growth and Stockholm County Council is now making historic and necessary investments in healthcare and public transport. Green bonds are a good fit for our environmental efforts. As a major actor, we need to be conscious of making investments that are of a sustainable nature.” Malin Frenning, CEO Stockholm County Council “The County Council’s investments must be made with the smallest environmental impact possible. The investments are well suited to green bonds where we turn to investors who value our environmental efforts. Through clear and transparent reporting for green projects, we hope to provide investors more reasons to choose green investments.” Frida Korneliusson, CEO Stockholm County Council Treasury “Actors like the Stockholm County Council are essential for leading the way and demon- strating it is possible for the world to reduce climate emissions sufficiently to remain below a global warming of 1.5–2 degrees, set by the Paris Agreement.” Charlotta Brask, Head of Sustainability at Stockholm County Council STOCKHOLM COUNTY COUNCIL GREEN BOND IMPACT REPORT 2018 3 EXECUTIVE SUMMARY Stockholm County Council reports it’s Green Bonds impact in accordance with the Nordic Public Sector Issuers: Position Paper on Green Bonds Impact Nordic Public Sector Issuers: Position Paper Reporting, published in October 2017 by a group of Nordic public sector green on Green Bonds Impact bond issuers. Any deviations from the Position Paper recommendations will Reporting October be indicated in our reports. 2017 For more information: sll.se > Choose language > English > investor relations > funding programmes > Nordic issuers release guide on green bonds impact reporting GREEN BONDS ISSUANCE AND GREEN PROJECT PORTFOLIO 7 000 6 000 5 000 4 000 SEK million 3 000 2 000 1 000 0 2014 2015 2016 2017 Disbursed to projects/total amounts approved to projects SEK 1.1 bn green bond (2014) SEK 1.8 bn green bond (2015) SEK 1.5 bn green bond (2016) SEK 2.0 bn green bond (2017) All green bonds are fully invested. GHG IMPACT AND GREEN INDICATORS, DIVIDED BY DISBURSED AMOUNTS FOR GREEN BONDS GHG emissions Disbursed reduced/avoided amounts to Impact CO2e 1 Project category CO2e /year (tonnes) Other result projects, SEK mn (tonnes)/SEK mn Green Buildings 13 600 3 353 4 Renewable energy (own production) 4 400 Clean transportation 6 100 1 5522 4 (excluding Roslagsbanan) Waste management n/a See individual reports Total 19 700 4 9052 n/a (Reduced emissions from Renewable energy are excluded from this total as it is already partly included in Green buildings) Disbursed amounts w. GHG impact 4 9052 4 SEK mn Annual renewable energy 30 000 MWh generation, MWh Annual energy savings, MWh 6 900 MWh (compared to national building requirements) 1 Calculations have been made on CO2 emissions, with a GWP warming potential of 1. Thus the value in CO2 equals the value in CO2e (Carbon dioxide equivalents). 2 Due to new impact report guidelines, there is no updated information at the moment about GHG emissions reduced/avoided for issued bond 2014, 2015 (Roslagsbanan). Hence, the disbursed amount for Roslagsbanan is not part of 1 552 mn and not part of 4905 mn. Also due to very low amount disbursed to New depot Högdalen, it is not part of the impact figures. 4 STOCKHOLM COUNTY COUNCIL GREEN BOND IMPACT REPORT 2018 Key procedural aspects • Each project is selected according to the Stockholm County Council Green Bonds Framework available on sll.se > Choose language > English > investor relations > funding programmes > green bond > framework for green bonds • Stockholm County Council reports on a project basis, and in Swedish kronor (SEK). • For this document, the reporting period ends on 31 December 2017. Key reporting methodology • Stockholm County Council reports on the basis of the share of the project’s total investment cost financed with green bonds (net of redemptions). • Impacts are based on outstanding disbursed amounts to projects in Stockholm County Council Green Bonds 2014– 2017 with exception of Roslagsbanan (2014 and 2015). Our ambition is to include this impact parameter in next report. • Impact is principally reported on expected impact (ex ante), unless clearly stated as ex post. 5 STOCKHOLM COUNTY COUNCIL’S ENVIRONMENTAL PROGRAMME 2017–2021 Stockholm County is a dynamic and rapidly takes national and global responsibility for the growing region requiring major investments in production of goods and services that are procured. public transport and healthcare to facilitate successful development. The County Council aims The County Council’s environmental programme to contribute to sustainable development in the covers five areas: region, by way of limited environmental impact. • Sustainable procurement • Climate commitment The County Council is taking a comprehensive • Healthcare approach to reducing environmental impact from • Public transport and other transports properties and installations, pharmaceuticals, • Properties and installations textiles, food and travel. The County Council also STOCKHOLM COUNTY COUNCIL’S GREEN BONDS In May 2014, Stockholm County Council was the Any financing raised by the County Council within first county council in Sweden to issue a green bond. the green bond framework is earmarked for A green bond has been issued each year since. environmental projects and is held in a separate tra- ceable account that is allocated for investments that Green bonds are a way of financing investment meet specific environmental criteria. projects with a particular environmental focus. They are a tool for raising awareness of climate- The Eligible Projects are selected jointly by the related challenges and solutions while safeguarding Stockholm County Council Treasury and the green development projects in the county. In terms Sustainability Department. They are then approved of risk, return, legislation and documentation, green by a Steering Group for Green Bonds consisting of bonds have the same characteristics as other invest- executive managers from the the County Council’s ments. They currently account for only a small per- local bodies, strictly following the following four centage of the overall bond market, however interest steps: and demand for green bonds is growing rapidly. • Stockholm County Council Treasury initiates the screening process and a project group is formed. • The project group for green bonds determines the ISSUED GREEN BONDS portfolio of green projects to be financed by a Year Loan amount Issued green bonds potential green bond issuance. 2014 SEK 1.1 billion 6 years • The Stockholm County Council Sustainability Department evaluates all the proposed projects 2015 SEK 1.8 billion 6 years to ensure compliance with laws and regulations, 2016 SEK 1.5 billion 5 years and 4 months Stockholm County Council environmental and 2017 SEK 2.0 billion 5 years social policies as well as the Stockholm County Council Green Bond Framework. • The Steering Group for green bonds has final authority in determining the final list of eligible green projects, to be financed by green bonds. 6 STOCKHOLM COUNTY COUNCIL GREEN BOND IMPACT REPORT 2018 STOCKHOLM COUNTY COUNCIL’S FRAMEWORK FOR GREEN BONDS The county council’s green financing complies with a framework for green bonds. The framework stipu- sll.se > Choose language > English > investor lates how the selection process of green projects is relations > funding programmes > green to be conducted, how the money is to be managed in bond > framework for green bonds separate accounts and how the communication and reporting on the projects will ensure transparency for investors. IMPROVED REPORTING ON GREEN BONDS In 2016, Stockholm County Council began, in Signatories are: City of Göteborg (Sweden), cooperation with other Nordic public issuers of Kommunalbanken (Norway), Kommuninvest green bonds, an effort to formulate a common (Sweden), Municipality Finance (Finland), approach to feedback reporting. The cooperation Norrköping Municipality (Sweden), Örebro Munici- is founded on the conviction that a common Nordic pality (Sweden), Svensk Exportkredit (Sweden), position will offer valuable insight for other green Municipality of Lund (Sweden), Region Skåne bond issuers as well as the investor market in gene- (Sweden) and Stockholm County Council (Sweden). ral. There is also a value in sharing experiences and expertise. The objective is to develop a transparent, harmoni- sed and relevant approach to reporting the effects of green bonds. The group’s ambition is to continue to develop the guide for Nordic issuers of green bonds published in the second half of 2017. STOCKHOLM COUNTY COUNCIL GREEN BOND IMPACT REPORT 2018 7 FEEDBACK ON GREEN BONDS AND GREEN FINANCE The first green bond issued by Stockholm County In June 2017, the County Council’s fourth green Council in 2014, funded two investment projects bond was issued in the amount of SEK 2.0 billion with a particular environmental focus: the Roslags- and pertains to three projects: the construction of banan expansion programme and the new construc- New Karolinska Solna, the upgrade of the Metro’s tion and renovation of Södertälje Hospital. The Red Line and the establishment of a depot in proceeds from the first green bond, SEK 1.1 billion, Högdalen as part of the expansion of the entire has been fully invested as of 31 March 2015. subway network. The second green bond, in the amount of SEK 1.8 The table below is continuously uppdated, on sll.se, billion, was issued in May 2015 and was intended for with Stockholm County Council’s green investment three projects: the Roslagsbanan expansion pro- expenditures.