The long-awaited EU Green Bond Standard (GBS) – intended as the “golden standard” for green bonds – has been approved and is set to apply from end-2024. The voluntary EU GBS tries to change the ambiguous nature of what is considered ‘green’ as it lays down uniform requirements for bond issuers that wish to use the label “European Green Bond” or “EuGB” for their bonds. For bond investors, the new standard should enable them to more easily determine whether their investments are sustainable, reducing the risk of greenwashing, and facilitate comparison. In this edition of the Nordic Sustainable Quarterly, we present our initial thoughts on the EU GBS, its usability, and potential challenges.
The appeal of Nordic sustainable bonds continues to gain strength. So far this year the share of sustainable bond issuance relative to total corporate issuance has continued to grow in the Nordic markets, representing close to 35% of total corporate bond issuance YTD.
The Task Force on Nature-related Financial Disclosures (TNFD) recently presented a new disclosure framework to assess nature-related issues. The TNFD recommendations are structured to allow companies and financial institutions to get started. In the coming years we expect this disclosure framework to gain importance. In a survey carried out by TNFD, more than 86% of respondents said that they could start reporting TNFD disclosures for the financial year 2025.
In a new publication produced by Danske Bank Credit Research we present our view on the main ESG risks facing the 16 Swedish real estate companies under our coverage. New features in the report include special sections on direct physical climate risks, the EU Taxonomy, the forthcoming Energy Performance of Buildings Directive (EPBD), the Corporate Sustainability Reporting Directive (CSRD), and an analytical tool to benchmark governance risk. In terms of relative value, we prefer the following names in the sector: Balder, Castellum, Cibus Nordic Real Estate, Emilshus, Fastpartner, and NP3.