Chief Sustainability Officer, SEK Svensk Exportkredit, Sweden
Swedish Export Credit Corporation (SEK) is an AA+ rated state-owned company that finances Swedish exporters, their subcontractors, and the exporters' foreign customers. On commercial and sustainable grounds, we strengthen the competitiveness of the Swedish export industry by ensuring access to stable financial solutions, sustainable financing, and by ensuring alignment with international sustainability guidelines when lending.
How can export finance play a role in promoting sustainable value creation in projects? Do you think that it is a topic that should have more international relevance?
ECA (Export Credit Agency) financing is a specific form of finance provided by government-backed agencies, to support domestic companies in international markets. ECAs offer loans, guarantees, and insurance to mitigate the risks associated with exporting goods and services. This support can help exporters compete more effectively in the global market, particularly in emerging and developing economies. Export finance has a huge potential to promote sustainable value creation by prioritizing funding for environmentally and socially responsible projects.
The ECA system has been and is instrumental in helping promote international trade. The global shift to clean energy, zero-carbon transport, and manufacturing will call for massive investments, requiring private and public interests to work together. The export finance system has the opportunity to play a key role in the coming decade(s) to bridge risks and uncertainties for international trade and for the export of goods and solutions that can help achieve societal development in a sustainable and low-carbon way.
Can you tell us about the offers that SEK uses to boost sustainable finance?
SEK promotes sustainable finance through various financial solutions aimed at supporting companies and projects that can accelerate the transition to a more sustainable future. These include green loans for environmentally beneficial projects like renewable energy, social loans for projects with social benefits such as e.g. healthcare and hospitals, and sustainability-linked loans, in which the loan links to a borrower's sustainability targets. We fund these activities by issuance of green bonds in the capital market.
Can you comment on how SEK participates in international collaborations for promoting and helping to set standards for sustainability in finance?
Collaboration is a key pillar in our strategy. Not merely because we believe joining hands with others is essential for growth but because international and domestic collaborations are vital in advancing sustainability efforts effectively as it helps enable harmonisation around what should constitute standards for responsible business practices. For example, as a member of Equator Principles and at the OECD, we participate in various practitioner groups on sustainability and E&S Due diligence. Our membership in the International Capital Market Association (ICMA) and adherence to their Green Bond Principles ensure our sustainable finance activities align with globally recognized standards. Furthermore, we co-founded the UN-convened Net-Zero ECA Alliance (NZECA) to help inspire leadership and dedication to achieving net-zero emissions in line with the Paris Agreement and the UN Sustainable Development Goals, but also as an effective way to develop methods for effective execution of decarbonizing our lending portfolio in line with our target of Net Zero 2045. Another example of collaboration, based out of Sweden but with international participation, is our participation in the Mistra Biopath, where we together with the industry and academia, collaborate to develop tools to support financial market participants to better understand its impact related to biodiversity.
Finally, how do you expect sustainability in projects to advance short-term? Do you think the international standards in that aspect should be enhanced?
Overall, the integration of sustainability into project planning and execution will continue to grow and mature. The drivers for this to happen and at what pace will differ between projects and companies, but the overall trend is clear: more companies recognize that adopting more sustainable business practices mitigates risks in companies' value chains and can help create new business opportunities. Stricter regulations, incentives for low-carbon projects, and technological advancements in clean tech and green materials will further drive this adoption. Additionally, rising expectations from investors, customers, and employees will push companies to prioritize sustainability.
When best practices are well-defined in a standard for reference, it becomes easier to assess the potential risks and returns of a project. Considering the speed of developments, not least technological, it is important that standards keep up with developments for it to play a relevant role in guiding decision-making and investments for more sustainable outcomes.
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