Sweden says EU plan could hurt world's busiest green debt market

Sweden is fighting a draft European climate measure that it says could harm its world-beating green bond market.

"We pretty much drew the short stick here," said Helena Lindahl, a portfolio manager at Storebrand Asset Management who’s part of a fixed-income team managing around USD 18 billion. "I sincerely hope that the issuers will continue to issue green bonds, that this doesn’t put a halt to what we’ve accomplished over the past 10 years." Photo: PR: SPP

The European Commission, which wants to steer investors to socially and environmentally sustainable assets, is proposing that only buildings certified as super-energy efficient by national authorities be included in its taxonomy. Being excluded would make financing more expensive.

But national energy requirements differ and since Sweden imposes some of Europe’s toughest, the EU’s framework would ultimately dramatically shrink the pool of Swedish assets that could be funded with green bonds. The Swedish Bankers’ Association says the fallout could leave just 1 percent of the total eligible, compared with as much as 20 percent in other countries.

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