Fabege was the first Swedish property company to opt exclusively for green financing. Fabege is now embarking on the next step along with Handelsbanken, as the first to take out a taxonomy-adapted loan for the Signalen 3 property in Solna.
In order to meet the requirements for a taxonomy loan, Fabege has conducted a comprehensive analysis of potential risks to the property based on changes to the climate, i.e. material climate resilience risks such as flooding, soil erosion, heat loads and extreme weather events such as storms. In addition, the property has been equipped with a building automation and management system and has received an energy performance certification of levelA, which only 1.2 per cent of office buildings in Sweden had achieved by the end of 2020. To obtain an energy performance certificate with a rating of levelA, the building must exceed the legal requirement for energy efficiency by at least 50 per cent. The requirements for an approved taxonomy loan also include what are known as minimum safeguards. This means that the business is managed in accordance with OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the ILO Declaration on Fundamental Principles and Rights at Work, the eight fundamental ILO conventions and the international human rights framework.
“The financial world has a great opportunity to steer developments in a more climate-friendly direction, and as borrowers we have significant potential to contribute to this. Since Fabege achieved 100 per cent green financing last year, we are now taking the next step and extending our sustainability responsibility in financing via a taxonomy-linked loan. We’re delighted to be able to do this together with Handelsbanken, with its responsible approach to sustainability work,” said Åsa Lind, Head of Treasury at Fabege.“The taxonomy and related regulations classify and impose requirements on activities related to consolidated reporting and opportunities for green financing. The EU Commission is aiming to bring about a swift transformation of the market through these regulations, which affect investors, companies and financial institutions, and the next twelve months will see a rapid increase in activity in green financing structures that adapt to the taxonomy,” commented Tobias Lindbergh, Head of Sustainable Finance at Debt Capital Markets, Handelsbanken.
Sustainable finance involves financing projects and assets related to environmental and social sustainability and corporate governance (ESG). So far, it has primarily included green or sustainability-linked loans, namely green loans that finance or refinance specific green projects, or sustainability-linked loans with requirements to achieve certain agreed sustainability-related outcomes in relation to a company’s operations.
The EU taxonomy is a tool for classifying which investments are environmentally sustainable. The aim is to ensure that the financial sector has common guidelines regarding which economic activities can be called ‘green’. To be classified as green, it must contribute significantly to one or more of the six defined environmental objectives, not cause significant damage to any of the other objectives, and satisfy certain minimum sustainability requirements.The current focus is on climate and the environment, but is expected to be extended to include social factors in due course.