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The Nordic Investment Bank's continuous efforts to strengthen its environmental bond framework exemplify the importance of transparent and credible solutions in sustainable finance for both investors and issuers.
The Nordic Investment Bank (NIB) is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden. With an explicit mandate from its owners to promote productivity gains and environmentally sustainable projects in the Nordic-Baltic region, NIB focuses on financing projects that benefit the environments of Nordic and Baltic countries.
NIB entered the green bond market in 2011. Driven by its mission, it has become one of the largest issuers of green bonds in the Nordic-Baltic region, raising funds for environmental lending through its NIB Environmental Bonds.
As global environmental concerns intensify, there’s a growing demand among fixed-income investors for investment opportunities that support sustainable development. Recognizing this shift, NIB sought to develop a solution that would address key environmental challenges while meeting the needs of investors who were prioritizing sustainable projects. The goal was to create a transparent, credible framework that would attract environmentally conscious investors and support impactful projects across its member countries.
In 2011, NIB developed its Environmental Bond Framework (NEB framework), which sets out clear criteria for project selection, governance, management of proceeds, and transparent impact reporting. Under this framework, the bank issues Environmental Bonds and Blue Bonds. The proceeds of these bonds are used to finance projects that benefit the environment and support the transition to a low-carbon economy. In 2024, NIB updated its NEB framework, marking the third revision since the framework's inception. The updated framework refines the eligible project categories, integrating more closely the technical requirements of the EU Taxonomy. It also aligns with NIB’s recently renewed climate strategy, which the bank hopes may help it accelerate capital allocation toward green assets.
The seven eligible project categories under the updated NEB framework include renewable energy; clean transport; water management and protection; green buildings; sustainable fuel production and infrastructure; climate change adaptation; and sustainable technology, innovation, sustainable manufacturing, and carbon capture storage.
To provide investors with greater transparency into its environmental bond framework and to help demonstrate its commitment to maintaining high environmental standards in its green financing initiatives, NIB secured a Second Party Opinion (SPO) from S&P Global Ratings. The SPO provides an independent assessment that the bank’s framework aligns with recognized market standards. This independent assessment may help enhance transparency, a critical factor for investors in the green and sustainable finance space.
S&P Global Ratings confirmed that NIB’s environmental bond framework is fully aligned with the Green Bond Principles (GBP). S&P Global Ratings also assessed NIB’s framework as Dark green according to its Shades of Green methodology, confirming that NIB’s activities correspond to the long-term vision of a low-carbon, climate-resilient future.
View the Second Party Opinion for Nordic Investment Bank“We found the Second Opinion process with S&P to be very smooth and appreciated the opportunity it provided for in-depth discussions between S&P professionals and NIB environmental analysts, ensuring thorough elaboration on sustainable matters.”
Luca de Lorenzo, Head of Sustainability & Mandate at NIB
Following a green bond framework update in 2024, NIB issued a five-year €750 million NIB environmental bond, the largest green bond in the bank’s history. The transaction attracted strong investor demand with a broad distribution across geographies and investor types. Overall, 2024 stands as a record year for NEB issuance.
NIB's continuous efforts to strengthen its environmental bond framework exemplify the importance of transparent and credible solutions in sustainable finance for both investors and issuers. NIB has aligned its framework with recognized market standards like the GBP and the EU Taxonomy, and has secured independent assessments such as the SPO, to help achieve its objective of attracting environmentally conscious investors. NIB’s success demonstrates how sustainable bonds may help drive positive environmental impacts.
