Green bonds

Stockholm County Council (SCC) is one of the largest county council and municipal issuers of green bonds in the Swedish bond market. SCC issued its first green bond already in 2014 and have 6 outstanding green bonds with a total outstanding volume of almost SEK 10bn. The County Council specifies investment objects with an environmental focus in green bonds, so investors know that their money is being spent on projects that are good for the future.

Green bond update

Currently over 50% of SCC's debt portfolio is green financing; green bonds and loans tied to environmentally friendly projects from the European Investment Bank and the Nordic Investment Bank, with the ambition to grow the green financing part of our debt portfolio even further.

The latest Green bond issued took place in November 2018 when SCC issued SEK 2.5bn in a green bond note with a short 3-year maturity. It was the sixth green bond issued by SCC. The size of this bond was the largest green bond from municipalities or county councils ever in the Swedish market. Investor interest from investment funds and pension fund managers was strong and Swedbank Robur, Swedbank Treasury, AP1 and Nordea Investment Management were among the key institutional investors.

Projects that benefit from the proceeds of this Green Bond issuance include projects supporting green transportation and green buildings. Roslagsbanan's expansion programme, accounting for 70% of use of proceeds, will increase capacity by almost 100% from 2016 to 2030, reduce noise levels, decrease sensitivity to traffic disruption, and improve safety in the rail system. A new hospital building at Huddinge Hospital, accounting for 30% of use of proceeds conferring to SCC plan to provide for future health and medical care demand.

Green bond projects

In May 2014, Stockholm County Council was the first county council in Sweden to issue a green bond. Since then five more green bonds have been issued.

The table below is continuously updated with capital generated in Stockholm County Council's green investments.

Roslagsbanan expansion programme

The Roslagsbanan expansion programme aims to develop and strengthen the capacity of a historical railway line that is of great importance for public transport in the north-eastern sector of Stockholm county. Creating the opportunity for more people to travel on public transport by train is more climate-smart compared with travelling by bus, but above all considerably better than driving a car.

The overall goal of the programme is to:

  • Increase capacity by almost 100% from 2016 to 2030 to meet increasing travelling needs.
  • Allow for a 8 trains per hour service, for the most frequented stations.
  • Reduce sensitivity to traffic disruption.
  • Confine with noise limits indicated in the Government's Infrastructure Bill for new railway construction.
  • Adapt stations and existing carriages for accessibility.
  • Improve safety in the rail system.

In addition to promoting sustainable travel, the programme includes many environmental initiatives. The project has a large focus on the re-usage of materials; rail and sleepers, ticket machines and catenary posts are all re-used. Recycled glass used are also used as lightweight fillers. Wildlife preservation is also a key focus area and wildlife passing tunnels have been built under the tracks as well as insect hotels and one hotel for salamanders.

Noise disturbance is one environmental aspect that can have a negative impact on the individual's well-being and health. Noise poses a problem to public health, and the Roslagsbanan expansion programme
involves a substantial effort to introduce noise-protection measures along the
entire track creating a better living environment for up to 10 000 people.

Huddinge hospital (CHOPIN)

Huddinge hospital is being modernized as part of SCC's plan to accommodate for future health and medical care demand. A new surgery is being built (29,000 gross floor area) with 23 operating theaters with a capacity of 18,000 surgeries per year at Karolinska hospital in Huddinge in the southern part of Stockholm. The new building will also host radiology and a caesarean section at the obstetrics department with a capacity of 7,500 births per year.

It is built with separate flows for patients, materials and personnel leading to increased efficiently, better availability and higher quality. The facility is also supporting new ways of working and built with the patient in focus.

The construction of the new surgery building begun in 2016 and is estimated to be completed in 2019 and is being built in accordance with the Sweden Green Building Council Gold standard, a Swedish environments certification system for buildings with three grades: bronze, silver and gold. The examination includes energy consumption, use of materials and indoor environment.

New construction and renovation of Södertälje Hospital

Södertälje Hospital is being expanded and modernised to create more modern, more efficient premises. The project is intended to meet the estimated increased need of care capacity in the immediate area by 2020. An important starting point for the project is that the hospital should allow greater flexibility for the future. The technical systems are duplicated to cope with outages in more than one section.

One of the major challenges is to implement the project on a relatively small property while the hospital remains fully operational.

A key goal of the project is to meet the requirements of the Sweden Green Building Council's Gold level of certification and to support achieving the County Council's environmental goals including having an energy consumption that is at least 30 per cent lower than that specified in Boverket's regulations for new buildings. The regulations for new building specify 125 kWh/m2 per year, whereas the forecast for the new Södertälje Hospital is 76 kWh/m2 per year.

Other goals in the project are to:

  • Achieve greater interactivity and process orientation for cohesive outpatient care and sterile technology.
  • Achieve better logical links between inpatient care, emergency department and treatment functions
  • Create generally designed wards for greater flexibility.
  • Ensure that the working environment for staff meets current demands without reducing the available range of care.
  • Use the building materials assessment systems to ensure approved materials are incorporated in the buildings.
  • Reduce energy consumption over time.
  • Dispose of waste in an eco-friendly way.
  • Ensure that transport over which Locum has influence is effective and environmentally friendly.
  • Avoid substances with a detrimental impact on health and the environment.


New Karolinska Solna

Construction of New Karolinska Solna (NKS) was begun in the summer of 2010. In order to safeguard the very high environmental and sustainability goals that have been set, the whole project is being carried out from a sustainability perspective. One of the tools used to this end is environmental certification of the buildings. Two systems of certification are being used for NKS: the Sweden Green Building Council and the international system LEED. The aim is to achieve the Gold level in both systems. In September the fourth and final construction phase was approved for Gold level certification in accordance with the Green Building Council. A preliminary certificate can thus be issued for the entire installation after an extensive third party inspection has been carried out by the certification body Sweden Green Building Council.

One aspect of the Green Building Council system is to reduce the energy requirements of the heating, cooling and maintenance of the installation. This is being done at NKS to such a degree that much less of the energy requirements permitted by legislation (Boverket's Building Regulations) will be needed. This will mean substantial savings, both financial and environmental, since this annual reduction in energy requirements is the rough equivalent of the amount of energy used in 1,200 private homes. The fact that the energy that must still be used is 99 percent renewable and does not give rise to global warming emissions means that the maintenance of NKS will be climate-neutral.

Another focus area is to reduce the use of chemicals which have a detrimental impact on health and the environment by inspecting all the construction materials used. Thanks to the deliberate choice of flooring material, the use of softeners harmful to health (phthalates containing allergy-causing and hormone-disruptive properties) has been reduced by at least 70,000 kg compared with conventional construction – and this is only one of all the materials used in the construction.

The Green Building Council

The Green Building Council is a Swedish certification system for building installations where the focus lies on energy, the indoor environment and construction material. Clear follow-up of supplier deliveries and reduced maintenance costs is one of the issues for which the Green Building Council is known.

A building can achieve the Bronze, Silver or Gold level. On completion of the construction planning a preliminary certificate is awarded. In order to be awarded a final certificate, the preliminary certificate must be verified no later than two years after the commissioning of the installation.

Metro Red Line programme

Creating a possibility for more people to travel by public transport entails a considerable reduction of carbon dioxide emissions (CO2) in the atmosphere, which is one of the County Council's main ways of reducing negative environmental impact in the County. The upgrade of the Metro's Red Line aims to develop and strengthen capacity and thereby contribute to sustainable public transport. To achieve this goal, investments are being made in

  • A new service command centre and new service command system.
  • An increase in the number of depots.
  • New quieter vehicles that are more energy efficient than older models.

Metro Red Line

Depot for extended Metro in Högdalen

The extension of Stockholm's Metro is the largest investment in the subway system in modern times. 19 kilometres of new track and 11 new stations divided into four sections are being built and, around 2025, Metro service will operate between Nacka C, Barkarby station and Arenastaden. More vehicles and garaging points with greater capacity for servicing these vehicles are needed for the Metro extension. Today, the number of vehicles and depot capacity fall short of the requirements necessary for the successful extension of the planned Metro.The extended Metro will be a resource-efficient and climate-smart travel alternative to fossil-fuelled means of transport. During the project, environmental and sustainability aspects have been taken into account in every area. The Metro extension will have a large climate impact during its construction phase, but from a life-cycle perspective, the Metro will have a clearly positive effect with reduced resource consumption and reduced climate burden for the county's residents. Multiple measures are planned to reduce the climate impact in the construction phase, such as optimisation of material selection and resource consumption, reduction of the number of transports, etc. The climate burden from the extended Metro will be reduced by at least 25% during the project's implementation and no serious work environment accidents will occur.

The County Council's Extended Metro Administration is environmentally certified according to ISO 14 001. Through climate calculations, the County Council monitors the climate impact of stations right from the design stage. The project's sustainability coordinator provides support and monitors sustainability issues in every project. The certification system CEEQUAL will be used to ensure that the County Council's strategic environment work is integrated into the planning and project engineering of all sub-projects. The objective is to achieve the rating of Very Good as a minimum.

The Depot-Vehicle project has the task of reinforcing the capacity at the existing Högdalen depot by several measures, promoting the resilience and capacity of the overall Metro system. The Högdalen maintenance facilities "garaging points" will be expanded and the connection possibilities to the depot will be extended to be accessible to both the Green and the Blue Lines. All of these measures will make it possible to increase the number of vehicles which is much needed. The project is vital for ensuring that the finished Metro lines will be fully operational for the scheduled launch of service. At the same time, an upgrade is being performed on the vehicle fleet and the transport systems. Reinforcing sustainable transport systems reduces the level of carbon dioxide emissions in Stockholm County. The project has the objective of achieving the rating of Very Good as a minimum.

Multiple measures are planned to reduce the climate impact in the construction phase of the depot. An above-ground garage, with a timber frame is planned, which will provide an estimated climate improvement of around 165 tonnes of carbon dioxide equivalents compared with a steel frame. It has also been engineered to enable the installation of solar cells on buildings above ground and placing the entrances to the garage below ground, cutting the heating costs. Constant optimisations are made to reduce resource consumption, especially the amount of concrete that is used. The use of light concrete is an important aid for reducing the number of heavy transports in the construction phase.

CEEQUAL is a sustainability assessment, rating and awards scheme for civil engineering, infrastructure, landscaping and public realm projects.

CEQUAL was developed by the British industrial association Institution of Civil Engineers (ICE) and was launched in 2003 in the UK and Ireland. 2 The rating "Very Good" is the second highest rating on the scale and means that the project received more than 60%, but less than 75 % of the total points.

The framework for green bonds

Green bonds were first issued by the World Bank in 2008 following development of the concept together with SEB in 2007.

Green bonds are a way of borrowing money for investment projects with a particular environmental focus. They are a tool for raising awareness of climate-related challenges and solutions while at the same time safeguarding green development projects in the county. In terms of risk, return, legislation and documentation, green bonds have the same characteristics as other investments offered on similar terms. They still account for a small portion of the overall bond market, but both interest in, and the market for, green bonds are growing rapidly.

The money that the County Council borrows within the framework of the green bonds is earmarked for environmental projects and is held in a separate traceable account that is only used for investments that meet specific environmental criteria.

There has been great interest in the Stockholm County Council's green bond transactions from Swedish and international investors with focus on sustainability. Among the investors are investment funds and pension fund managers.

Stockholm County Council has participated in a Nordic initiative for reporting in 2017. Read more about this.

Green development projects in the County Council

Investments that are eligible for funding with green bonds must lead to reduced energy consumption and a lower carbon footprint. The investment projects to be funded by the green bond are selected by the Growth, Environment and Regional planning in consultation with the Treasury department. The projects lie within four identified project areas:

  • Sustainable public transport.
  • Sustainable buildings.
  • Waste management.
  • Water management.

Environmental work audited by independent climate institute

Stockholm County Council is pursuing long-term and award-winning environmental work and in 2013 was named Sweden's greenest county council. A green bond is an important and obvious step for the County Council to raise awareness of climate-related challenges and solutions while it secures green development projects in the county.

The independent research institute CICERO in Oslo has audited Stockholm County Council's environmental work and approved the environmental areas that the County Council is focusing on as green investments.

Concrete results of the County Council's overall environmental work:

  • 90 % of the County Council's transport uses renewable fuel.
  • 96 % of the County Council's properties use renewable energy for heating, cooling and electricity.
  • All central procurement processes include environmental requirements, where relevant, in accordance with the environmental programme. The Code of Conduct is another important tool for more sustainable procurement.
  • Carbon emissions from public transport have decreased by 55 % since 2011.
  • 36 % of the County Council's patient food is organic.

*All figures are in accordance with the 2017 environmental report.

Nordic issuers release guide on green bonds impact reporting

A group of ten Nordic public sector issuers have released a joint position paper on green bonds impact reporting. Developed with the primary aim of assisting Nordic public sector borrowers, the signatories hope that it will prove useful also for issuers from the private sector and from other countries as well as for the investor community. The position paper, which has been 14 months in the making, was launched at the OECD Green Investment Financing Forum in Paris on 24 October 2017.

The paper has been developed by a working group comprising public sector green bond issuers from the four Nordic countries Denmark, Finland, Norway and Sweden. They include the local government funding agencies Kommunalbanken (Norway), Kommuninvest (Sweden) and MuniFin (Finland); the Swedish Export Credit Corporation (SEK); and six Swedish municipal or regional issuers including City of Gothenburg, the municipalities of Lund, Norrköping and Örebro, Region Skåne and Stockholm County Council. Denmark's municipal lending agency KommuneKredit has been part of the working group but intends to comply at a later stage.

The paper proposes an outline for reporting environmental benefits of green bond investments. It provides guidance on general matters such as to report on actual impact when feasible, to distinguish between reduced and avoided emissions, and to report impact in relation to the share financed by green bonds. The paper also recommends issuers to report impact in relation to amounts disbursed and outstanding, as opposed to amounts committed.

The paper furthermore provides suggestions for metrics and indicators relevant to eight different project categories. This effort builds upon reporting approaches suggested by the Green Bond Principles and multilateral development banks, but adds indicators for categories such as clean transportation and green buildings, that have previously not been addressed.

As a first step toward approaching social impact, the paper includes a few social impact indicators on a 'nice to have' basis.

The paper has benefited from input from CICERO Center for International Climate Research, the Nordic Investment Bank, SEB, and Crédit Agricole CIB as well as several investors throughout the process.

The issuer group intends to manage the position paper as a live document, to be updated on a regular basis. The group encourages feedback and will seek to develop its methodology to provide as relevant and appropriate impact reporting as possible. Events to introduce the paper to issuers and investors are planned for a number of cities, with Frankfurt, London, Paris and Stockholm confirmed at time of the launch.