NIB at COP23: Customers see opportunities in green financing

On 14 November, NIB co-organised the Nordic Finance Day at the UN Climate Summit COP23 in Bonn, Germany. During the panel discussion “Financing the green transition: What is the colour of money?”, industry experts discussed the role of the financial industry in combating climate change and promoting green financing.

“The essence of green bonds is transparency, meaning that the proceeds go to projects that have positive environmental impacts”, said Doris Kramer, Vice-President of Investment Strategies and Sustainability at KfW and member of the Executive Committee of the Green Bond Principles.

Speaking at NIB’s panel debate “Financing the green transition: What’s the colour of money?” during the Nordic Finance Day at COP23 in Bonn, Kramer admitted that KfW could have funded many projects without green bond financing.

“However, the fact that we are sitting here and discussing the environment and green bonds is very valuable and meaningful in itself,” Kramer said.

NIB’s panel hosted four participants: Esko Kivisaari, Deputy Managing Director of Finance Finland; Doris Kramer, Vice-President of Investment Strategies and Sustainability at KfW and member of the Executive Committee of the Green Bond Principles; Kristina Alnes, Senior Advisor, CICERO; and Thomas Wrangdahl, First Vice-President and Head of Lending at NIB.

Asked why the financial industry is getting more attention in the fight against climate change, Kristina Alnes, Senior Advisor at CICERO, explained that for many years, the focus of CICIERO’s efforts had been on policy makers.

However, “…even with the Paris agreement, a significant gap exists between what policy makers are willing or able to do and what science tells us is necessary to avoid dangerous climate change. We began working with bankers to bridge this gap.”

Esko Kivisaari, Acting Managing Director of Finance Finland, and a member of the EU’s High-Level Expert Group on Sustainable Finance, pointed out that the thinking in the corporate world is also evolving.

“Ten years ago, diesel was considered good for the environment. Today, it is clear that we need to get rid of this technology.”

“We need to improve the definition of what sustainable is, and create proper incentives for investors to put money into sustainable projects.”

Thomas Wrangdahl, First Vice-President and Head of Lending at NIB, spoke about NIB’s mandate to provide long-term lending to projects that improve competitiveness and the environment of the Nordic-Baltic region.

“We see that some customers increasingly care about green financing, but others remain sceptical, saying the colour of money is always the same. However, more and more start seeing opportunities in green financing during the lending process with us”, Wrangdahl said.