State-owned Swedavia has raised one billion kronor in a green bond.
But now there is criticism that the money could lead to increased capacity at Arlanda and Landvetter airports.
One of those who has declined to invest in the bond is Fredric Nyström, head of responsible investments at Öhman funds.
– What Swedavia is financing with its green bond will lead to increased flight capacity, and we do not want to encourage that, he says.
The point of green bonds is to finance projects that contribute to environmental sustainability. But when Swedavia's green bonds were reviewed by the independent review institute Cicero, the scheme received the second lowest rating on their scale: light green, which is one step above failing.
Cicero warns investors because the bond framework allows investments in a new pier at Arlanda. The buildings themselves receive a good climate rating, but they are being built to accommodate more passengers and increased air traffic.
– Our mission is to ensure availability in Sweden when it comes to flights. We must meet the demand that exists here, says Mats Påhlson, CFO at Swedavia.
TT: Do you understand that some people find it strange that air traffic can increase with money from a green bond?
– We do it in the best way, we do it in a greener way. That must be the goal of our investments. And it is completely transparent, says Påhlson.
At the same time, the aviation industry as a whole must also adapt to reduce its climate impact, he points out.
According to Mats Påhlson, the money from the first green bond that Swedavia has now issued will not go to the new pier at Arlanda, but will likely go to the expansion being made at Landvetter in Gothenburg. The exact projects will probably be announced this spring.
However, future issues can go to the Arlanda pier, entirely in accordance with the framework - which allows a total of 15 billion SEK in green bonds.
Swedavia's goal is for its own operations – not air traffic – to be free of fossil carbon dioxide emissions by the end of this year.
– It costs money to make climate investments. Green bonds are one way of broadening our financing options and thereby achieving lower financing costs, says Mats Påhlson.
Cicero gives Swedavia's own climate work a good grade – and that they are pushing for the industry to change so that aviation will eventually become fossil-free. But Cicero warns that there is a high risk that this change will not happen, and then the investments could instead lead to increased emissions. Therefore, the final grade is only weakly green.
“Our job as an external assessor is to point out the risks for investors, then it is up to them to decide what risks they tolerate,” says Christa Clapp, head of climate finance at Cicero.
– But if we don't allow any green bonds from the dirtier sectors, we will never solve the climate challenge.
Jakob König, project manager at the international network Fair Finance Guide, which, with the support of Sida, reviews green investments, does not believe that small savers who choose green funds expect their savings to go towards expanding an airport.
– The problem is that it is not particularly transparent towards savers. When you save in a green bond fund, you hardly expect that the money can be used to increase the capacity of an airport, that is not how the information material for this type of fund looks, says König.
He instead believes that savers imagine that their money is going to finance projects linked to trains, electric cars and wind turbines.
– Not to make a very climate-damaging industry a little less climate-damaging, he says.
Helena Lindahl, manager at SPP Fonder, is another of the investors who chose to reject Swedavia's green bond.
– What I struggled with was that it helps to increase capacity, that you can fly more aircraft in a simpler way, says Lindahl.
However, she is positive about other parts of Swedavia's initiatives, such as making the buildings energy-efficient and climate-smart.
– It's a borderline bond, because it belongs to an industry that is one of the culprits in terms of climate. If they had more clearly targeted the bond at increasing the use of biofuels, I would have liked it better.
TT: Is it right to call it a green bond, when the money can go towards increasing the airport's capacity?
– Well, it's a gray area. And that's why I chose not to invest in this green bond. I find it hard to digest.
Source: TT
