Marylou Costa
Journalist
Happy visuals Goteborg
The local authority of Gothenburg seeks to highlight its green references
Gothenburg, the second city of Sweden, highlights its environmental references by continuing to put his money into play.
In 2022, the city of Göteborg, became what is supposed to be the first local government in the world to contract a “loan linked to sustainability” or SLL.
It is a form of funding set for a set of annual environmental and social improvements agreed between a borrower and its banks.
The four target zones of Gothenburg are efforts to make renewable energy the only source of heat production in the city, which makes the fleet of electric council vehicles, reducing energy consumption in the poorest buildings of the municipality, such as hospitals and schools, and the improvement of the poorest districts of the city.
Meet the annual improvement levels agreed in these sectors and, for everyone, Gothenburg obtains a discount on the annual costs which it pays for the loan of 0.1% or approximately 100,000 kronor ($ 10,500; £ 8,000). But miss one of the targets of a certain amount and he must pay a fine of the same amount.
In 2022 and 2023, Gothenburg managed to avoid a financial penalty, but the figures recently published for 2024 show that it has missed its target for renewable energies. And he is therefore about to be sentenced to a fine of 150,000 kroner.
However, this is offset by the discounts he obtains to continue to achieve levels of improvement for energy consumption and social improvement. To electrify the vehicles of the council, although it has missed its objective of improvement, it did not do it enough to be sentenced to a fine.
Fredrik Block, portfolio director of the city of Göteborg, said that the local authority has deliberately set “ambitious” objectives.
“You are targeting high and you ask the whole organization to strive towards this target. We do not proceed as quickly as we expected, but we take a step at a time. The objective is always to be close to carbon -free by 2030.
“We do not actually do it for money. We do it to show the important work of the city and that we progress every year. We want to show the world how it is – that these are the problems, and these are the right things.”
Fredrik block
Fredrik Block says that the city highlighting its environmental work makes it more attractive for other potential investors
Improving the poorest areas in the city – and if the council has achieved its objectives – are measured by annual residents. People are asked about their feelings about the security and cleanliness of a region.
Key initiatives have included making housing safer, the introduction of surveillance cameras and the increase in police presence as a measure of crime prevention in city regions like Hjallbo and Biskopsgarden. Located in the north of the city, they have high levels of crime and unemployment and large populations of immigrants.
The Social Housing Agency Framtidin, which finally belongs to the city of Göteborg, says that it takes the work of improvement very seriously.
“For some of these vulnerable areas, we actually have the majority of housing,” said its research director and development, Lars Bankvall.
“We are more or less the only official body in these areas. There is no one else there, only us.
“I see us as perhaps the most powerful tool in the city, because we have a lot of financial resources. We are involved in everything.”
But Faduma Awil, a social worker who now provides career coaching in a job center in Göteborg, fears that the increase in cameras and the police presence sends the bad message to young people in the disadvantaged areas of Gothenburg – and could see an increase in racial profiling.
“What will our children think when they see cameras everywhere in Hjallbo, but none in a Swedish district? How will they feel when they are constantly watched by the police?” she said.
“What are you going to tell them? You show them that there is a difference between them and the native Swedes.”
Ms. Awil is also not convinced that resident surveys are effective or precise. And it believes that the city puts a disproportionate effort in its environmental objectives, to the detriment of the improvement of conditions in disadvantaged areas.
“People in these areas do not care about the environment. They have to go to school. They need to work. They need to eat,” said Awil, who migrated Somalia in Sweden in 1987 as a child.
Jonas Bjorn
The municipal council is trying to improver the poorest parts of Göteborg, like Biskopsgarden
The negotiation of a SLL is a rigorous and complex process – which has taken the city of Gothenburg per year to be done, with no less than six major Nordic banks involved.
This is the difficulty of acquiring a SL that the number issued worldwide dropped by 56% in 2023, according to data from the supplier of new Bloomberg financial.
Mats Olausson is the main sustainable advisor to the Swedish bank Seb, which is the main lender of the Gothenburg SLL.
He said that SEB refused SLL potential borrowers, because the objectives offered by the customer were not ambitious enough. However, he adds that SLLs are difficult for businesses or local authorities that obtain one successfully.
“It’s sad if a business puts a lot of resources to the design of a SLL, then it turns out that the only advertisement they get is negative,” he said. “You run the risk of being fired in dirt for not having done a good enough job.
“It is not interested in anyone to have too ambitious and fundamentally impossible objectives to achieve, or for companies that do not have the right governance in place to implement the actions that will be the constituent elements of the real strategy.”
A company that is satisfied with its SLL is the Danish consulting firm Emagine. He borrowed 10 million pounds sterling in 2021, funds that helped him acquire six other companies around the world.
Its binding objectives include the increase in the number of women’s women leaders by 16% and the 6% reduction in employee turnover over the seven -year period. It does it thanks to leadership and mentorship programs.
By achieving the objectives, Emagine benefits from a reduction in interest rates, explains Lars Bloch, the company’s financial director.
“If we do not meet the objectives, we would have landed with interest penalty rates. We also accept that not achieving sustainability objectives could affect the reputation of the company, because we have made a public commitment.
“It should not be a question of engaging in the loan to obtain a discount on funding – there must be an ambition behind the objectives.”
Back in Gothenburg, the city’s current environmental and social objectives take place until 2030. Mr. Block says that the detailed annual reports of the SL show the future potential investors in the city what difference would their money make.
“Banks want to give money to sustainable cities, so packing our progress in our SLL reports is the way I make the city beautiful for investors,” he said.
“I cannot change the dedication of the city, but I can change the way investors examine our sustainability work and make it more attractive to them.”
Learn more about global trade stories
Source link
