We are convinced that we can influence the development towards a more sustainable economy by supporting our customers in their transformation as they develop and thereby improving our own work. New thinking, innovations and financial assistance are needed, as well as responsible credit granting.
We believe that the transformation of large corporates, especially in sectors with a material carbon footprint, will be one of the main drivers of the transition to a low-carbon economy. Consequently, we have strong focus on supporting our customers with sustainable products and services, such as green bonds and other sustainability-themed products (read more below).
Responsible lending and risk management
Responsible financing and lending are cornerstones of SEB’s business, creating long-term sustainable value for customers and shareholders. SEB is committed to supporting its customers in their work on transitioning to sustainable solutions.
Knowing our customers
We take great care to know our customers well and view responsible financing and credit granting as a cornerstone of our business, creating sustainable customer and shareholder value. In the customer dialogues, we engage on sustainability aspects on a regular basis. The aim is to understand the customers’ challenges and opportunities so that we can make the appropriate credit considerations and be a better business partner.
Integrating risks and opportunities
We integrate risks and opportunities related to environmental, social and governance aspects into customer dialogues, policies and processes. According to SEB’s Credit Policy on Corporate Sustainability, sustainability risks shall be considered in all credit decisions, with focus on the repayment capacity of the customer, the underlying value of collateral, as well as potential reputational consequences for SEB.
Sustainability Policy Framework
SEB’s sustainability work is based on a solid governance structure and the Sustainability Policy Framework. This framework, that covers the Corporate Sustainability Policy, thematic policies, sector policies and instructions, provides guidelines on best practice and on the international conventions and standards that the bank encourages companies to follow. In 2022, extensive updates are being made to SEB's thematic policies, as well as to several sector policies. New sector policies are also launched, such as the Sector Policy on Transportation.
SEB adheres to the Equator Principles (EP), a voluntary set of guidelines used by financial institutions to assess the social and environmental impacts of large projects and to support their customers in managing them. In 2021, we conducted eight project finance transactions under the Equator Principles, four in category B (projects with potential limited adverse environmental and social risks) and four in category C (projects with minimal or no social or environmental impacts). We were not involved in any category A transaction (projects with potential significant adverse environmental and social risks).
Engaging with customers
We engage in constructive and concrete dialogues about our customers’ needs in relation to sustainability challenges and opportunities. We are convinced that we can make the greatest positive impact by being engaged in our customers' transition journeys.
A proof that our customers appreciate our advisory services is the Prospera survey focusing on banks’ sustainability advice (published in 2021 and 2022), where SEB two years in a row was ranked number one by companies as well as institutions in the Nordic region.
Our approach to climate change
SEB believes that climate change is one of the most serious global challenges the world is facing. We support our customers in their transformation towards sustainable solutions.
Sustainability financing solutions
Enviromental, social and governance aspects are incorporated across a broad range of financial solutions in the bank. Among the products we offer are green bonds, social bonds, sustainable bonds, sustainability-linked bonds, green loans and sustainability-linked loans.
As one of the innovators behind green bonds, SEB has an ambition to drive the green financing market. Over the years, we have gradually developed our role as a global thought leader and has proactively contributed to setting the standard for this financing vehicle. In 2021 SEB had a leading position in the Nordic market with an 18 per cent share of global transactions by Nordic banks and underwrote an aggregate volume of USD 6.2bn.
Among corporate customers, performance-based solutions such as sustainability-linked loans and bonds are increasing in the Nordic market and especially in Sweden. The financing cost for these type of products is linked to the customer's ability to perform on pre-defined sustainability-related KPIs. These could be linked to for example climate-related or social targets.
SEB's green loans are issued for the purpose of financing and/or refinancing projects within the EU, the UK and the Nordic region. The loans promote the transition to low-carbon and climate-friendly development, as well as improvements to the environment and ecosystems.
In 2021, SEB’s green loan portfolio grew to SEK 23bn (20.8), eligible green assets according to SEB’s Green Bond Framework. The proceeds are used to finance projects that contribute to lower carbon emissions and support the UN Sustainable Development Goals. More than 40 per cent of the green loan portfolio finances renewable energy projects, while green buildings, sustainable forestry and clean transport account for 27, 15 and 14 percent, respectively. In 2021, the bond contributed to a reduction in carbon dioxide emissions by 220,000 CO2e reductions (tonnes).
In January 2022, SEB published its updated Green Bond Framework which defines eligible assets that can be financed by green bonds issued by SEB. In February 2022, the bank issued a green bond of EUR 1bn under the updated framework, refinancing its first green bond from 2017.
SEB was the first bank in Sweden to launch green mortgages, which offer a lower interest rate for people who live in climate-smart houses. The loans are available to anyone with housing that fulfils specific requirements, for example the Swedish National Board of Housing, Building and Planning’s energy classification criteria, homes with the Nordic Swan ecolabel, Sweden Green Building Council certification, and passive house certification. In 2021 the volume of green mortgages increased to close to SEK 8bn (4).
SEB offers the possibility to apply for green construction loans when financing residential and commercial properties of any size. Previously, we have offered this funding for major building projects. SEB uses green funding to finance the properties that are classified as green.
Solutions supporting social development
Several products that we offer support social development such as equality, diversity and inclusion. These could be social bonds, social impact bonds or fixed income product where the issuer uses the proceeds for the purpose of financing, or refinancing, projects that generate positive social outcomes.
One example of a social financing is the Health Impact Bond, issued by Region Stockholm. The money, 30 million kronor, is used to finance preventative measures focusing on lifestyle habits for people at risk of developing type 2 diabetes.
Health Impact Bond
Sustainable financial products