New policy to communicate NIB's view on environmental and social issues

Stakeholders are invited to comment on NIB’s revised environmental policy, before it is launched as a new Sustainability Policy and Guidelines. Johan Ljungberg, Head of Environment at NIB, explains the rationale behind the updated policy and the new name as he welcomes the public to review the new policy.

Why did NIB revise its environmental policy?

“We want our guidelines to be as updated as possible. The current policy and guidelines have been effective since 2008, and it is common to revise the policy about every third year. International Financial Institutions such as NIB harmonise their respective environmental policies. It is also a promise to our customers that the policies and guidelines are similar, to make the process simpler, especially in cases of co-financing.

The process itself is not just a matter of writing down a list of technical demands. This is a tool to communicate NIB’s view on environmental and social issues. The internal process also helps raise in-house awareness of these issues.”

What does the inclusion of “Sustainability” in the policy name reflect?

“The new name should better mirror NIB’s mission: the Bank promotes sustainable growth of its member countries by providing long-term complementary financing, based on sound banking principles, to projects that strengthen competitiveness and enhance the environment.

Sustainability is made up of environmental, economical and social aspects. This policy covers the environmental and social aspects, while we have other financial policies that cover the economic aspects.

Climate change mitigation is highlighted in the new policy. This is one of the cornerstones of NIB’s lending, and is part of a sustainable future. NIB finances projects within the sectors of infrastructure, telecom, public transport, renewable energy and energy efficiency. The shift from a pure environmental policy to a sustainability policy is a natural response to this. The social dimension is important for the long-term viability of projects.”

What are the most important changes in the new Sustainability Policy and Guidelines?

“We have aimed at clarifying what we expect from the customers and what the customers may expect from us. The list of commitments is a new way of presenting the policy with a clear division between the policy and its guidelines. The revised guidelines are a compliance tool which more clearly defines the projects which best meet NIB’s environmental and social requirements.”

The updated policy includes an exclusion list. Why?

“NIB has always had an exclusion list, but we have only applied it to loan projects via financial intermediaries. With the new policy, the exclusion list is applicable to all projects. The list has also been expanded to include the use of fossil fuels in large power plants.

An exclusion list is a clear statement of those projects which should not make up part of NIB’s portfolio.”

The policy and guidelines state that NIB requires a significant amount of information from its customers to live up to its environmental mandate. Do you expect any reactions from potential customers on the new policy?

“Most of our customers have a good understanding of the material that NIB requires. NIB is a long-term lender and sustainability is a long-term aspect. Environmental analysis is an integrated part of the Bank’s risk assessment. The environment is not a satellite. It is an integrated part of business- for us as well as for our customers.”

The new policy and guidelines will be available for public viewing. Do you expect any reactions from the public?

“We will publish the policy and guidelines on our website for 30 days, and it is open for all to comment on. Not only our member countries, bur other stakeholders, companies, associations and organisations are invited to comment. We had the same procedure when we launched the former policy and we received a few comments. I hope for some feedback this time as well.”