Region Stockholm is the largest regional and municipal issuer of green bonds in the Swedish bond market. Stockholm County Council (current Region Stockholm) issued its first green bond already in 2014 and have 8 outstanding green bonds with a total outstanding volume of almost SEK 12 billion. Region Stockholm 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 percent of Region Stockholm'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 bonds issued took place in May 2019 when Region Stockholm issued two times SEK 1.0 billons in two green bond notes with a 6-year and a 6-year and 8 months maturity. It was the seventh and eighth green bond issued by Region Stockholm.
Projects that benefit from the proceeds of these green bonds issuance include projects supporting green transportation and green buildings. Roslagsbanan's expansion programme, accounting for 70 percent of use of proceeds, will increase capacity by almost 100 percent 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 percent of use of proceeds conferring to Region Stockholm plan to provide for future health and medical care demand.
Green bond projects
In May 2014, Stockholm County Council (current Region Stockholm) was the first Conty Council in Sweden to issue a green bond. Since then seven more green bonds have been issued.
The table below is continuously updated with capital generated in Region Stockholm'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 Region Stockholm. 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 goals of the programme are:
- Increased capacity by almost 100 per cent from 2017 to 2030 to meet increasing travelling needs
- Allowing an 8 trains per hour service, for the most frequented stations
- Reduced sensitivity to traffic disruption
- Confining with noise limits indicated in the Government's Infrastructure Bill for new railway construction
- Adapting stations and existing carriages for accessibility
- Improved 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 re-used. Recycled glass is also used as lightweight fillers. Wildlife preservation is also a key focus area.
Here are some of the activities and investments in wildlife preservation that have been carried out so far:
- Two nature passages
- Approximately 11 fauna passages under the railway
- One playroom for sea trout
- Approximately 400-500 evacuation pipes in cable wells
- One hotel for salamanders
- Several culverts are demolished to create open ditches
- Many stems are saved as insect hotels
- A preserved and protected woodland, key habitat for rare and endangered species
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 track creating a better living environment for up to 10 000 people.
Chopin, which is part of Karolinska University Hospital in Huddinge is a state-of-the-art building designed for advanced healthcare with the latest medical technology. The hospital, which is located in the south of Stockholm, is being modernized according to Region Stockholm's plan to accommo- date for future health and medical care demand. The new 29 000 sqm large building contains cutting edge technology and equipment for demanding surgery with 23 operating theaters and a capacity of 18 000 surgeries per year. The new building will also host radiology and a sterile technical section. The design of the building is that surgery have close access to intervention facilities and advanced image diagnostics.
The Chopin building has been built with separate flows for patients, materials and personnel leading to increased efficiency, higher quality and increased availability. The new central sterile service department also add to patient safety. The facility is built with the patient in focus and is supporting new ways of working leading to higher satisfaction for both patients and employees. The building has also been built to let in more daylight, which contributes to improved working conditions for the employees. Due to the advanced care that will be given in the facilities, the demands on technical equipment and ventilation systems are exceptionally high, to attend to various demands on temperature and air purification for various care needs.
The construction of the new surgery building begun in 2016 and is estimated to be completed in 2020. The building is constructed in accordance to Miljöbyggnad Gold, where 13 of 15 indicators are targeting the Gold level and the rest are targeting the Silver level. For example, the calculated energy use in the building is 75 kWh/sqm, being 35 per cent lower than the legal demands. Another example is that 98 per cent of the energy use is from renewable sources.
Södertälje Hospital is part of the ongoing extensive development of Region Stockholm's health and medical care services. Two new treatment buildings of Södertälje Hospital were completed during 2017, including among others a new intensive care facility, a new emergency and a new cesarean section. This allows 7 500 additional emergency visits, increasing the total to 42 500 visits/year and making it one of the most modern hospitals in Sweden. The hospital has a central and expanded role, as a combined emergency and local hospital, for people living in the southwest part of the region.
The project has received the preliminary certifica- tion Miljöbyggnad Gold. Between 2017 and 2019, a verification process is conducted to confirm that the theoretical values specified in the certification application are correct. 10 of 15 indicators are tar- geting the Gold level while the rest are targeting the Silver level. For example, the estimated energy use is 85 kWh/sqm, being 25 per cent lower than the legal demands. The project has built geothermal cooling and heating which is an environmentally good alternative to meet the hospital's need for cooling and heating.
The Regions facilities management company Locum performs building reviews throughout the year. The reviews are aimed at ensuring the energy and building performance that the hospital was designed for, and to identify any low performing areas. Through the reviews, a fast handling is ensured, and the lifespan of the facility is prolonged.
New Karolinska Solna
New Karolinska Solna (NKS) is one of the world's most sustainable university hospitals both when it comes to facilities and to the concept of patient flows. The revised structure of the system of hospitals in Stockholm address the healthcare needs for an increasing population in Stockholm, where the most highly specialized care will be provided at certain units, such as NKS. Single patient rooms, an increased number of operating rooms and space for two helicopters are examples of improvements that will fulfill future needs for advanced healthcare. The focus is on good indoor environment to ensure that patients and staff have good conditions.
To achieve the exceptional environmental and sustainability goals that is set for the hospital, the entire project has been carried out from a sustainability perspective, from the choice of materials to the design of the building.
One of the tools used is environmental certification of the buildings. Two types of certification schemes have been used; Miljöbyggnad issued by the Sweden Green Building Council, and LEED, an international
green building rating system. The aim is to achieve the Gold level in both systems. In September 2018, the
fourth and final construction phase was approved for preliminary Gold level certification in accordance with Miljöbyggnad. Final certification will be available when the entire building performance has been verified with measurements and follow-up that takes place 1-2 years after the building's completion.
NKS has been constructed for significantly reduced energy consumption, the target is 50 per cent below the requirements set by Sweden's Building Regulations. This means substantial savings, both financial and environmental, since the annual reduction in energy consumption is the rough equivalent of the total amount of energy used in 1 200 private houses. By switching to renewable energy, emissions of greenhouse gases will be minimized. 99 per cent renewable energy will be used, a large portion also stemming from own production through a large geo-thermal facility.
Another focus area has been to reduce the use of chemicals and hazardous substances. Thanks to the deliberate choice of flooring material, a significant reduction in the use of softeners with an adverse impact on health has been achieved (at least 70 000 kg compared with conventional construction). This is only one example of all the materials used in the construction.
Miljöbyggnad is a Swedish, third party reviewed certification system for sustainable buildings. It is based on three pillars: energy, indoor environment and construction materials and has 16 indicators including such as energy use, daylight and hazardous substances. The certification is available in three different grades: Gold, Silver and Bronze. Bronze corresponds in principle to the legal requirements already applicable, while Silver and Gold requires more. A unique characteristic of Miljöbyggnad is that a building cannot obtain a Gold rating if any of the individual indicators are rated Bronze. The purpose is to identify critical parts in the building and to encourage actions that improve performance. All Region Stockholm's new buildings are targeting Gold certification. On completion of the design stage a preliminary certificate is awarded. To be awarded a final certificate, the preliminary certificate must be verified no later than two years after the completion of the buildings in an extensive process.
Metro Red Line programme
The upgrade of the Metro's Red Line creates a possi- bility for more people to travel by public transport, reducing the emissions of carbon dioxide (CO2), one of Region Stockholm's key environmental goals. The upgrade of the Metro's Red Line aims to develop and strengthen capacity and thereby contribute to a more resilient and sustainable public transport. To achieve this goal, investments are being made in the following areas:
- Upgrade of two depots, Hammarby and Nyboda
- Upgrade of two stations, Norsborg and Hallunda
- Building of new depot in Norsborg
- New attractive vehicles which are more energy efficient than older models
In addition to develop and strengthen the capacity on the red line the travelers will be able to ride more comfortably and safer than before. Almost 100 new vehicles will be taken in to traffic with start during 2019, with full effect year 2022. To maintain the new vehicles, depots have been built and upgraded.
Except the initiatives mentioned above, the travel environment has been improved in the stations Norsborg and Hallunda with new glass sections with automatic doors, new glass walls between lifts and escalators and new public artwork which light up the stations.
Extension of the Metro in Stockholm
The extension of Stockholm's Metro is the largest investment in the subway system in modern times. 19 kilometers 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 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-fueled means of transport. During the project, environmental and sustainability aspects have been considered in every area. The Metro extension will have a significant climate impact during its construction phase, but from a life-cycle perspective, the effect is positive considering the avoided carbon emissions during years to come. Multiple measures are planned to reduce the climate impact in the construction phase, such as optimization of material selection and resource consumption as well as reduction of the number of transports. The goal is to reduce the climate impact with a total of 25 % of the carbon emissions from the very start of the project to the finished construction.
Region Stockholm's Extended Metro Administration is environmentally certified according to ISO-14 001. Through climate calculations, Region Stockholm 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 is used to ensure that Region Stockholm'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.
 CEEQUAL is a sustainability assessment, rating and awards scheme for civil engineering, infrastructure, landscaping and public realm projects. CEEQUAL was developed by the British industrial association Institution of Civil Engineering (ICE) and was launched in 2003 in UK and Ireland.
 The rating Very Good is the second highest rating on the scale and means that the project will receive more than 60 per cent, but less than 75 per cent of the total points.
Depot for extended Metro in Högdalen
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 these measures will make it possible to increase the number of vehicles. 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 direct carbon dioxide emissions in Region Stockholm. Multiple measures are also planned to reduce the indirect climate impact in the construction phase of the depot. The project has the objective of achieving the rating of Very Good in the certification system CEEQUAL as a minimum. An above-ground garage, with a timber frame is planned, which will provide an estimated climate improvement of around 165 tons of carbon dioxide equivalents compared with a steel frame. On one of the above-ground garages a green roof is an idea of how to delay stormwater. 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 optimizations 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.
Region Stockholm's 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 Region Stockholm 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.
Region Stockholm's framework for green bonds received the highest possible rating, dark green, by CICERO (Center for International Climate and Environmental Research - Oslo) - the independent institute that conducted the assessment published in August 2018. A dark green rating is allocated to projects and solutions that correspond to the long-term vision of a low carbon and climate resilient future. The new green bond framework highlights Region Stockholm´s work for Agenda 2030 and specifies how the work with green bonds is done and reported.
Read more about Regions Stockholm's framework as well as CICERO's assessment in the attachment to the right under Bilagor.
Green development projects in Region Stockholm
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
Region Stockholm is pursuing a long-term environmental work with significant reductions of hazardous chemicals and greenhouse gases. Carbon emissions from Region Stockholm has decreased by almost 70 percent since 1990, and by 45 percent since 2011.
Green bonds are an important tool for Region Stockholm to mitigate climate-related challenges and solutions while securing green development projects in the county.
Concrete results of Region Stockholm's overall environmental work:
- 90 percent of Region Stockholm's transport uses renewable fuel.
- 96 percent of Region Stockholm'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 percent since 2011.
- 36 percent of Region Stockholm's patient food is organic.
*All figures are in accordance with the 2017 environmental report.
Nordic Position Paper - guide to green bonds impact reporting
In 2016, Region Stockholm, in cooperation with other Nordic public issuers of green bonds, began an effort to formulate a common approach to feedback reporting. The cooperation is founded on the conviction that a common Nordic position will offer reporting standards for issuers and valuable insight for other green bond issuers as well as the investor market. There is also a value in sharing experiences and expertise.
The objective is to develop a transparent, harmonized and relevant approach to reporting the effects of green bonds. The group's ambition is to continue to develop the cooperation between the Nordic issuers of green bonds, and to continually refine the impact guide published January 2019.
Signatories are: City of Göteborg (Sweden), Kommunalbanken (Norway), Kommuninvest (Sweden), Municipality Finance (Finland), Norrköping Municipality (Sweden), Örebro Municipality (Sweden), Svensk Exportkredit (Sweden), Municipality of Lund (Sweden), Region Skåne (Sweden) and Region Stockholm (Sweden).
Read more about the Nordic Position Paper in the attachment to the right under Bilagor.