Sustainable investments with green bonds

Published 17 September 2019 by Mark Fletcher Photo by iStock
Environmentally-conscious investors can add sustainable investments to their portfolios with green bonds. Stora Enso has hopped on board with its Green Bond programme.

Going green is a popular trend in the business world. More and more investors are beginning to take ­sustainability seriously by investing their money in green bonds – earmarked loans to support environmentally-friendly and sustainable climate solutions.

Pasi Kyckling, SVP Group Treasurer at Stora Enso, how do you see the green bond market at the moment?

The general statistics for the green bond market signal that the market is growing significantly! There is a huge appetite for the sustainability market worldwide.

Stora Enso has initiated the Green Bond programme. Could you take us through what the programme entails?

Green bonds are a great match for our strategy at Stora Enso. Our green bond projects provide an opportunity for investors to invest in sustainable solutions that are controlled and managed by our company. The investments are used exclusively to finance specific green bond eligible activities.

Have there been any challenges for Stora Enso to adopt a green bond strategy?

We have had to be careful about not “greenwashing” everything, so each project is given careful consideration. We have identified six eligible categories in our green bond framework; for example, concrete and steel as part of a new production facility does not qualify, even though the facility may eventually produce renewable products. We have established internal governance with the Investment Working Group (IWG) to ensure we carefully evaluate all our investment projects from a green funding point of view.

Is there a way of seeing the direct impact of your investment?

In accordance with the Green Bond Principles, Stora Enso will provide an annual update on the activities related to its green bonds where we will aim to provide relevant information on how the investments are being used. Overall sustainability performance is reported annually in our sustainability report.

Do you believe that green bonds can make a difference?

I strongly believe that green bonds are a big step forward in a sustainable financing journey. By investing in green bonds, the investors can make sure their funds are used in a green way and through that make a real difference.

How does sustainability figure into what Stora Enso aims to achieve?

Sustainability is the primary driver for all of our activities, and we have turned sustainability into a competitive advantage. Our raw material – the trees – is renewable, recyclable and fossil-free. This provides us with a great advantage in addressing global megatrends and in leading business and industry towards the bioeconomy. 

What is a green bond?

  • A green bond is a loan from which a company collects money from investors. The company promises to use the collected money for green projects as defined in a corporate specific Green Bond Framework.

  • The Green Bond projects must be aligned with the international standards called Green Bond Principles (GBP) formulated by the International Capital Market Association.