Green Voices of Nasdaq Nordic: Branching Out in the Green Bonds Market .

For the green bond market to become mainstream, it needs to diversify, according to Helena Lindahl, senior portfolio manager at SPP Fonder.

Green Voices of Nasdaq Nordic: Branching Out in the Green Bonds Market

The Nasdaq Nordic Sustainable Bond Market is flourishing due to our continued commitment to the environment, society and a more responsible future. With over one hundred green and sustainable bonds listed, it is a testament to the extensive integration of sustainable practices amongst Nordic companies.

Nasdaq’s sustainable bond listings offer high transparency that makes it easier for investors to invest and manage risk, which goes hand in hand with our overall mission to provide fair, transparent and efficient markets.

In this series, called Green Voices of Nasdaq Nordic, we are providing a platform that allows our green bond issuers and investors to share their stories. This story shines a light on SPP Fonder’s investments in green bonds and the need to further diversify the market.

Green bonds are gaining traction as an attractive asset to hold for many investors and fund managers seeking to improve their portfolios’ sustainability levels. But for sustainable investing to become commonplace, there needs to be greater diversification within the broader green bond market, according to Helena Lindahl, senior portfolio manager at Swedish investment management firm SPP Fonder.

The growing appeal of green bonds stems from the transparency they provide, allowing investors to track the sustainability projects that are being funded, such as solar energy developments.

For SPP, sustainability analysis is at the core of investment management, and it is integrated into the entire management model, providing managers with access to sustainability data for more than 3,600 companies. The analysis also incorporates the UN’s Sustainable Development goals.

Companies around the world are setting their own sustainability goals, such as working to reduce carbon emissions, turning toward renewable resources sources of energy, and employing other methods that align with the Paris Agreement, which aims to limit the global temperature increase by strengthening the response to climate change. Should companies lag in these efforts, they may face activist investors or shareholder proposals. With the rise of environmental, social and governance (ESG) initiatives, the green bond market has grown and should continue to do so as it expands to additional industries.  

“If you look at how the market has evolved, you would see that a large share of what has been issued in the green bond market has been used for energy efficiency, the buildup of solar panels and windmills and other renewable energy sources,” said Lindahl. “But I would like to see more projects for waste management, water infrastructure and so forth.”

Money in the Marketplace

The Nordic region is at the forefront of sustainable investing, with many companies working on a variety of green projects, including renewable energy sources and sustainable forestry, which is why Lindahl primarily invests in the area. SPP has developed a unique, in-house screening process to identify green bonds suitable for their portfolios, said Lindahl, who manages the SPP Green Bond Fund and the SPP Corporate Bond Fund. The firm first invested in green bonds in 2012, around the time when the green bond market started to recover following the 2008 financial crisis.

Since then, interest in green bonds has grown, but there are still challenges to overcome.

“The largest obstacle for green investments and making sustainable investments overall is that the world as a whole invests too little money in renovating our common infrastructure to make it compliant with the Paris agreement,” said Lindahl. “So, it’s a lack of overall projects.”


Helena Lindahl

“We need a more diversified market, and we’re slowly approaching that, but it’s moving too slowly,” Lindahl said.

There is a welfare issue that may be the reason why other countries and regions are behind the Nordics in terms of sustainable investing.

“The Nordic countries may be really good at sustainability and care so much about sustainable issues because of the [gross domestic product] per capita,” Lindahl said. “And I think that is a direct function – if you live in a pretty rich country or are a very rich company in comparison to most other places on this planet, you have the resources, and you have the funds to spend a lot of time thinking ahead.”

Along with the welfare issue, the general mentality around the green bond market has to shift to achieve greater diversification, and companies and investors should incorporate sustainable investing into their mainstream investing strategies, especially if global sustainability ambitions, such as those established in the Paris agreement, are to be met.

Not a Niche Product

“I think it’s wrong for the market to speak about green finance and speak about sustainability investment as a niche product because I think that if we are to be anywhere near the goal of the Paris agreement, we need to make Green finance and sustainability investments the new way of investing,” Lindahl said.  


The SPP portfolio manager believes companies should embrace the green bond market not only because it will finance sustainability projects, but also because it will provide bondholders will the transparency they seek when evaluating the risks of an investment and could even bring more investors into the marketplace. Lindahl would like to see corporations use the green bond market as a tool in their financing box, and look to see what they can fund with green bonds.

“I would like to invite a number of corporations to the green bond market because I think, in short, transparency is the new green,” Lindahl said. “If a corporation can offer more transparency when they [borrow] money from institutions, I think we will gain a lot of insight into the corporate activity and then will rank higher in our [sustainable] holdings.”

With the movement toward sustainable, transparent investing accelerating, Lindahl believes it will become part of mainstream investing.

“I think that movement is so strong that investing in a sustainable fashion will become a hygienic hurdle if you are going to manage someone else’s money,” Lindahl said. “We have a really strong tailwind – we have the regulators on our side, we have society on our side – so I wouldn’t want to invest in any other way.”

Nasdaq’s Role in Sustainability

The Nasdaq Sustainable Bond Market was launched in July of 2015 with a total volume of 740 million euro.  In 2017, €1.7bn ($1.9bn) was raised on the Nasdaq Nordic Sustainable Bond Market, up 81% from 2016. We facilitate infrastructure, monitor issuers and foster dialogue to ensure the continued growth of the markets. 

Bonds can be listed on Nasdaq Sustainable Bond Market if a set of criteria are fulfilled. The respective criteria are based on the green and social bond principles (the GBP and SBP), for which ICMA acts as secretariat, and have been developed in cooperation with Sustainalytics, a global leader in environmental, social and corporate governance research. Issuers that wish to list green, social or sustainable bonds on our sustainable bond market go through the same process as traditional bond issuers. However, the issuer must supply Nasdaq with information regarding the bond or bond framework as well as the third party’s review when applying to list. 

To learn more about the listing process visit our website.

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