30 March 2020
Norwegian public sector lender Kommunalbanken Norge (KBN)'s 2018 green bond impact report builds on a strong track record of reporting among Nordic issuers.
One of the main innovations in its latest report – the third that it has produced to date – is the mapping of impact to the UN Sustainable Development Goals, the bank said.
In addition, the report's use of infographics presenting key figures was praised by investors and has inspired similar approaches by some of its peers, KBN claimed.
KBN is one of several Nordic financial institutions that published The Nordic public sector issuers position paper on green bonds impact reporting. The third instalment of the paper was published in February 2020, to provide guidance on green bond reporting best practice.
Its own impact reporting is conducted according to the methodology presented in this position paper.
It reports on the impact of a $2.2 billion portfolio of loans financed by proceeds from KBN's green bonds. The bank's 'green project portfolio' consists exclusively of loans to Norwegian municipalities and county council or regions.
The largest share of this portfolio, by project type, (50.2%) is dedicated to financing new 'green' buildings. The next largest share is dedicated to low-carbon transportation projects (28.7%) and water and wastewater management (12.5%).
KBN calculates its impact on individual projects based on the disbursed and outstanding green loan to a project as a share of the total project cost.
It attributed a portion of the overall impact of its green financing to each of its green bonds, based on total outstanding bonds divided by the total outstanding amount disbursed to projects.
For example, 23% of the impact achieved by its $2.2 billion portfolio of loans was attributed to its $500 million, 10-year notes issued in 2015.
KBN has so far issued five green bonds, worth a combined total of $2.2 billion, according to Environmental Finance's bond database.
Torunn Brånå, head of green finance at KBN, said: "We consider coherent and transparent impact reporting to be a precondition for a well-functioning labelled bond market and will strive to move the front of this exercise also in the future."