Growth in sustainable debt has accelerated in recent years, with the rise of green and sustainability-linked loans and bonds helping to drive the development. While corporates in Sweden and Finland were first-movers, Denmark is rapidly catching up, with sustainability-linked loans inching towards becoming the new norm for corporate lending.
Someone ready to meet that demand is Isabella Frenning Willis, the Denmark lead on Nordea’s Sustainable Finance Advisory team. She came to Nordea with significant sustainability-related experience, previously as a sustainability consultant at KPMG, where she advised companies on climate risk management, carbon footprints and sustainability reporting. Before that, she worked as an ESG manager at a Danish pension fund, MP Pension, gaining the investor perspective.
When it comes to her role at Nordea, Willis is focused on working with companies on choosing relevant ESG targets for their loans and bonds. Under sustainability-linked structures, a company’s borrowing costs are tied to its progress on meeting certain set and measurable targets. If the company meets those key performance indicators (KPIs), it gets a discount; if not, it pays a premium.
“What’s important in this role is the ability to work with the companies on ambitious targets that are relevant to their long-term position and contribution to the green and sustainable transition,” she says.
She emphasises that the KPIs need to be material and ambitious enough that the sustainability-linked loans and bonds live up to their labels.