Green loans are loans meant for sustainable, environmentally friendly purposes, such as reducing CO2 emissions, or purposes contributing to the green transition in society such as developing new environmentally friendly technology.
Some examples of green loans to personal customers:
A loan for an electric car
A loan for installing solar cells on the roof of a house
A loan for improving the thermal insulation of a house so that less energy is spent on heating
Some examples of green loans to companies:
A loan to build a solar park
A loan to build zero emission buildings
A loan to ensure growth of a company working with water cleaning technology
What is the definition of a green loan from Nordea?
Green loans are loans that fulfil the criteria in Nordea’s Green Bond Framework. The criteria are based on internationally recognised green bond standards. By creating a green loan, Nordea essentially gives the loan a quality label. In doing so, Nordea sets strict criteria for how to use the proceeds from the loan and how to report its environmental impact.
What is the connection between green loans and green bonds?
When a bank lends money to businesses or consumers, it needs to find the money somewhere – to fund the loans. This can be done by issuing bonds. Green bonds are bonds where the money from the bonds is earmarked for sustainable purposes such as funding green loans to consumers or businesses. This is also known as green financing.
Green bonds are popular investment objects for large institutional investors such as pension funds wanting to support the transition to a sustainable future. To ensure that the loans funded by our green bonds truly are sustainable, Nordea has developed a green bond framework.
Nordea introduces green corporate loans at reduced rates with the European Investment Fund
Small and medium-sized companies in Finland and Sweden are now offered green loans at reduced interest rates thanks to a collaboration between Nordea and the European Investment Fund.
ESG analyst: Green buildings is the way of the future
Green buildings have generated a lot of buzz, but do they live up to the hype? Nordea ESG analyst Martin Zistler says yes and explains why building green is the way of the future.