This is how green loans should contribute to climate change

"Follow the money" is often said, and the money is big in the financial market.

The largest is the global loan market.

A new report from the Stockholm School of Economics shows the benefits of influencing the loan market to have a better climate effect for the money. 

- The fossil-intensive companies finance themselves via the loan market rather than the stock market, and if you look at the world, the global loan market is much larger than the stock market, so we need to understand how that money can be greener, says Emma Sjöström who is co-author of the report.  

In the report, the researchers from Handels show examples of oil companies that have had a hard time being listed on the stock exchange - but who at the same time have been able to take out loans for significantly larger amounts than the listing had brought in.

Therefore, it is more effective to act for change in the loan market where fewer decisions can affect larger amounts.

So-called green bonds, ie loans where the money goes precisely to environmentally friendly purposes, are now growing faster in Sweden than, for example, the USA.

It can, for example, be a real estate company that lends to environmentally friendly houses, or the Swedish state that borrows for environmental investments.

- Our goal is to be carbon neutral in how we invest money by 2050. We have set this so that we will achieve returns and sustainability, says Kristin Magnusson Bernard, CEO of Första AP-Fonden, which invests in green bonds as part of the value portfolio. 

Risk of “green washing”

Through the four large AP funds, which manage our pensions, the Swedish people own bonds, ie loans, worth SEK 456 billion.

Green bonds account for eight percent of the value on average.    

However, there are no uniform rules for what makes a green loan just green.

The risk of scams, so-called "green washing", is significant. 

- It is important that you do your homework and do a company inspection so that the product in question lives up to the criteria you have decided, says Joshua Kendall, head of sustainable development and management, at the fund manager Insight Investment, to SVT.