Green Bonds for Low-Impact Building Projects

Swedish property company Vasakronan issued the world’s first corporate green bond, and is financing investments to develop low-impact, climate-friendly building projects.

In November 2013, Sweden’s largest property company, Vasakronan, issued the world’s first corporate green bond, raising $160 million. Since then, the investments have continued to grow, and by the end of 2015, Vasakronan’s total investments approved for fi nancing by green bonds totaled more than $725 million. The proceeds of the investments are fi nancing environmentally certified construction, renovations, and certifi cation upgrades to existing properties. Valued at $13 billion, Vasakronan’s portfolio comprises 183 properties and an area of 2.5 million m2.

Vasakronan’s framework ensures all building projects obtain LEED certification, complying with the environmental standards for design, construction, operation, and maintenance for green buildings. According to Vasakronan, its buildings have reduced their energy use by 47% since 2008.

Relevance of solution

According to Vasakronan, buildings are responsible for 40% of energy use in Sweden. Through the issuance of green corporate bonds, the company provides the capital market with the opportunity to reduce this figure by investing in energy-effi cient construction and retrofi ts, such as window upgrades, additional insulation, locally sourced building materials, and green roofs.

Triple Bottom Line

Environmental

Vasakronan’s corporate green bonds can help Sweden achieve its goal of reducing energy use by 80% by 2050, compared to 2014.1

Social

Vasakronan’s investments in energy efficiency include demand-controlled heating and ventilation, which makes for a healthier indoor environment.

Economic

Energy-saving upgrades,such as those financed by Vasakronan, automatically come with cost savings for building owners, such as motion-sensing lighting, which can save 15% to 30% on lighting costs.2


Sources

  1. Sayigh A. “Sustainability, Energy and Architecture: Case Studies in Realizing Green Buildings.” (2014.)
  2. ENERGY STAR. “Invest in Energy- Efficiency Measures that Have a Rapid Payback.” (Undated.)