Record ESG Bond Sales in Nordics Mask “Worrying” Concentrations

The Swedish real-estate industry is behind 50% of the country’s traded debt, much of which issued under “climate-friendly” labels. “ESG is now firmly a key strategic focus area for all large Nordic corporates,” said Povl Bak-Jensen, head of the bond syndicate desk at Nordea Bank Abp, which arranged most of the region’s deals, including in green bonds. While Nordic borrowers sold a record €13bn of bonds tied to ESG in the first quarter, for some investors the real estate isn’t worth the risk. Among investor concerns are the risk that ESG bonds are used to refinance old debt. Investors want to know whether the old debt, which is now being refinanced with a green bond, aligns with the current principles.