What we’ve done so far
In this section we present some of our achievements with a sustainable perspective, that SEB has accomplished so far. They range from very broad initiatives to small steps in our daily work.
Renewable energy
We are committed to financing new clean tech, energy efficiency and renewable energy transactions. In 2011, SEB provided SEK 17bn in dedicated financing of renewable energy projects and manufactures of renewable energy equipment. About 80 per cent of the financing of renewable energy equipment manufacturers were concentrated to wind and solar energy while well over 90 per cent of the financing of renewable power producers were for bio energy and wind power.
In 2011, SEB granted over EUR 15 million in renovation loans for apartment buildings in Estonia and Latvia, especially targeting energy savings. On average, the financed projects provide 40 per cent savings in energy cost per building. More buildings are being completely renovated with complex work to significantly improve energy efficiency.
Supporting SME
A survey, performed by our Business Economist during spring 2011, showed that small and medium-sized enterprises (SME) see a clear customer demand on environmental and socially responsible products. They believe those issues will become even more important in the future. These aspects already affect their business orientation and profitability.
Our current transactions within the SME sector range from financing renewable energy projects to financing development and manufacturing of products and technologies that address a wider range of sustainability concerns. Examples of the companies we serve are engaged in climate-friendly engine technology, weather forecasting solutions that contribute to reduced energy consumption, and recycling systems.
Profiled offerings for private individuals
For the retail market, SEB offers some climate friendly products. Since 2006 in Sweden, we offer a Green Car Loan for financing at subsidised interest rate levels of cars that meet national environmental certification criteria. In 2011, we approved some 1,500 Green Car Loans. In autumn 2011, we also launched a new Green Leasing product in the Baltic markets, granting favourable leasing terms for new environmentally friendly cars meeting EU environmental criteria.
Equator Principles
In 2007, SEB adopted the Equator Principles (EP), a voluntary set of guidelines used by financial institutions to assess the social and environmental impact of large projects and to help their customers to manage them. Signatory financial institutions are required to apply the Principles to project finance deals amounting to more than USD 10 million.
The Principles, which typically apply to complex installations such as power plants, refineries and waste treatment plants, have contributed to developing and operating such large projects in accordance with good international practice.
During 2011, SEB was involved in twelve financings reported under the Principles. SEB also participated in the consultation process, together with the Equator Principles Association and other signatory banks, regarding an assessment of whether the Principles should apply also to corporate loans tied to specific assets. In October 2011, a tailored EP training was arranged for 30 advisors and client executives in the international team.
Responsible investments
We support sustainable development by offering investment products designed to meet a variety of concerns and responsible investment preferences among SEB’s customers. Assets under management in the 15 funds we offer with a socially responsible investment profile amount to almost SEK 15bn. The funds are managed using a combination of negative screening, positive screening, ESG integration and thematic approach.
Managing sustainability risk
Assessing the environmental and social impacts of providing finance to our customers is embedded into our overall risk management processes as environmental criteria have been included in our credit policy since 1997. In 2004, we broadened our perspective to include other sustainability aspects such as human rights, international labor standards and reputational risks. A special section on credit policy emphasizes our social responsibility. We will continually strengthen our assessment of sustainability risks and opportunities in our credit decisions as we implement our coming sector policies and position statements.
Integrating sector policies and position statements
In 2009, the development of our sector policies and position statements was initiated. Six sector policies and three position statements were formally adopted by the Group Executive Committee in February 2011. They regulate our view on key issues and industry sectors that are sensitive from an environmental and social perspective. The policies highlight relevant international conventions, guidelines and standards that we wish the companies we do business with to adhere to.
By including environmental and social factors in our business decisions and discussions with customers, we are better equipped to mitigate risks and seize opportunities.
Our primary objective is to establish a platform for a proactive and future-oriented dialogue with our customers and portfolio companies on sustainable development – we want to work towards improved business practices.
Offering Socially Responsible Investment (SRI) funds
We support sustainable development by offering investment products designed to meet a variety of concerns and responsible investment preferences among SEB’s customers. Assets under management in the 15 funds we offer with a socially responsible investment profile amount to almost SEK 15bn. The funds are managed using a combination of negative screening, positive screening, ESG integration and thematic approach.
The norm-based screening is the foundation for most funds, and combined with other approaches depending on the preferences of the clients. We also apply company engagement to these products, with the aim of improving company performance related to ESG.
Green Bonds
In 2008, SEB pioneered the issuance of Green Bonds, working closely with the World Bank on its inaugural Green Bond issue. Since then, SEB has assisted the World Bank and its affiliate the International Finance Corporation in issuing a total of USD 2bn in Green Bonds (close to 60 per cent of total global investments of USD 3.4bn).
These bonds fund investments in countries throughout the world, and are designed to mitigate climate change or help people and communities adapt to it. At the end of 2011, 88 investors had invested in Green Bonds through SEB, ranging mainly from Pension Funds, Life Companies, Insurance Companies to Asset Managers and Swedish Municipalities.
The World Bank Green Bonds are designed to raise additional funding for projects or programs that support low-carbon activities in World Bank client countries. They respond to growing interest from institutional investors for highly rated fixed-income products that support sustainable development. A key feature valued by many investors is the due diligence process that the World Bank environmental specialists conduct to identify and monitor green bond supported projects.
Source: YouTube, sebgroup, Green Bond at World Expo Shanghai 2010.
Offering Green Car Loan to Swedish customers
Since 2006, SEB has offered Green Car Loan to customers in Sweden, designed to encourage our customers to purchase more efficient and less environmentally damaging vehicles. With the Green Car Loan, customers can finance the purchase of cars that meet local environmental certification criteria, at subsidized interest rate levels. In 2010, 60% of total approved Car Loans where Green Car Loans.
Co-founding Sweden Green Building Council
Buildings are estimated to account for between 30 and 40% of energy used globally. As a large provider of commercial property financing, it is our duty to encourage sustainable building practices and energy efficiency in buildings. During 2009, we therefore co-founded the Swedish Green Building Council together with eleven partners. The organisation aims to support the switch to greener property construction and real estate management by influencing decision-makers, disseminating knowledge and developing various supportive tools. One important task is to champion the development of commonly accepted green building standards.
Financing residential apartment buildings
We provided financing for the construction of three municipal residential buildings in Riga, with a total credit of 12.75 million Euros. The houses are 12 stories high and accommodate about 260 family flats supervised by the City. This was a joint venture between SEB, the Riga City Council and Riga Pilsebuvnieks. The social dwellings opened in early 2010 and the were reserved for people who were on the waiting lists for new apartments since their old ones were found to be in too bad condition, but could not afford to buy an apartment on their own.
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