Sweden’s largest forest owner
Sveaskog, Sweden’s largest forest owner is fully committed to sustainable forestry. With the help of Danske Bank, Sveaskog has developed a Green Bond Framework, which is in line with ICMA’s Green Bonds Principles. The Green Bond Framework allows Sveaskog to access the green bond market in an effective way and raise funds for its sustainable forestry operations. The revenues from its first green bond issued under the new framework funded green projects that helped to capture and store more than 4.5 million tonnes of CO2 emissions within the first year.
The positive CO2 impact of forests
Sustainably managed forests preserve biodiversity and act as a carbon sink. Balanced harvesting and replacement of older trees that have less ability to bind CO2 with new saplings ensure that the CO2 impact of the forest remains positive. Sustainable forestry also requires that a certain part of the forest is used for nature conservation. Sveaskog uses an above average part of its productive forest for nature conversation.
With its first Green Bond issue under its new framework Sveaskog has raised SEK 1bn. The dual-tranche transaction was launched in the autumn of 2017, had a tenor of five years and was well received by institutional investors. Sveaskog managed to achieve a funding advantage or “greenium” of 8 basis points. Danske Bank acted as sole lead manager for the bond issue.
“The bond was quickly over-subscribed and we are very pleased with the investor interest. We see this as an acknowledgment of the business we conduct, the positive impact that an active and sustainable forest management has on the climate in the near future and in the longer term, "said Per-Olof Wedin, CEO of Sveaskog.
Please see Sveaskog’s Green Bond Framework and DNV GL’s second opinion for more information.