Helsingborg has established a sustainability linked bond framework to support its green transformation

The City of Helsingborg has established a framework for sustainability-linked bonds. The return on the city's bonds is linked to emission reductions within the geographical area of Helsingborg. The city has a target of net zero greenhouse gas emissions by 2035 and the trajectory of emission reduction is used as the key performance indicator for the bonds.

SEB Investment Management has purchased the first 500 million SEK bond issued under the new framework, brokered by Danske Bank.

¨To do this together with Helsingborg – the first municipality to create a sustainability-linked bond – is something we at SEB Investment Management are proud of. Municipalities have a key role in Sweden's climate transition, and by linking financing to a clear emission target that is more ambitious than the national agreements, we can contribute to a faster climate transition¨, says Martin Lundvall Head of Core Fixed Income and Investment grade at SEB Investment Management.

The framework describes how much the emissions (in tons of CO₂e) should be reduced yearly until 2035 in the geographical area of Helsingborg, based on the ambitious goals in the City of Helsingborg's climate and energy plan. This makes it possible to construct bonds that take into account whether we have reached the target for each year regarding emission reductions, if the emission reductions do not correspond to the target, the bond's coupon can be increased or an additional payment can be made once the bond has reached maturity.

Data from the national emissions database are used to track emissions. These figures are freely available online.

¨Within the geographical area of Helsingborg, emissions of greenhouse gases (in number of tonnes of CO₂e) have decreased by 52 percent since 1990. It is possible to achieve the ambition of net zero emissions by 2035, but to accomplish this our emissions must decrease at a faster rate in the coming years. Therefore, we need to concentrate on reducing emissions in crucial areas, such as fossil fuel-free transport, and take advantage of carbon sinks and transformative technology to store and sequester carbon dioxide¨, says Henrik Frindberg, environment director in the City of Helsingborg.

The sustainability-linked bonds will finance the municipality’s and the municipal companies’ strategy towards increased quality of life, a healthier environment and a sustainable Helsingborg.

¨We’re working broadly with these questions within the city's organization and together with important actors in the city. This can be seen, for example, in our work with local climate agreements and our innovation initiatives. In September we were finalists in the European Commission's EU Green Capital, and now we’re looking at whether we have the potential to become one of the 100 European cities to take the lead in climate change. This is an important step in the right direction, says Lars Thunberg, deputy mayor.

The City of Helsingborg has developed the framework in collaboration with Danske Bank and in accordance with the International Capital Market Association's Sustainability-Linked Bond Principles. S&P Global Ratings has given a Second Party Opinion on the framework.

¨Issuing sustainable bonds to fund our work towards net zero greenhouse gas emissions and a sustainable society, is an important step for us. We welcome all investors who will join in the transformation towards sustainability¨, says Marcus Nilsson, CFO in the city of Helsingborg

Press contact: 

Göran Heimer, Group treasurer in the city of Helsingborg, phone: +46 42 10 35 70