2023
KOMMUN INVEST I SVERIGE AB
Annual Report
z
The Annual Report for Kommuninvest i Sverige AB (publ) is presented on pages – On pages – “Kommuninvest” refers to the Kommuninvest
Cooperative Society andor to Kommuninvest i Sverige AB From page and onwards it refers to Kommuninvest i Sverige AB unless otherwise stated
The Annual Report for the Parent Society the Kommuninvest Cooperative Society is available at wwwkommuninvestorg
While every care has been taken in translation of this report readers are reminded that
the original report signed by the Board of Directors and the CEO is in Swedish
INTRODUCTION
Kommuninvest in brief .................................................................................................................................................................................
Chairman’s statement
...................................................................................................................................................................................
President’s statement
...................................................................................................................................................................................
Our mission
..................................................................................................................................................................................................................
SUSTAINABILITY REPORT
Sustainability report
..................................................................................................................................................................
Environmental and climate work
...............................................................................................................................................
Social sustainability
.....................................................................................................................................................................................
Governancefinancial sustainability
....................................................................................................................................
Sustainability indicators
........................................................................................................................................................................
Auditor’s opinion
..............................................................................................................................................................................................
BOARD OF DIRECTORS’ REPORT
Business focus .....................................................................................................................................................................................................
Local government loan financing
..............................................................................................................................................
Lending
..........................................................................................................................................................................................................................
Funding
.........................................................................................................................................................................................................................
Liquidity management
............................................................................................................................................................................
Organisation and employees
.........................................................................................................................................................
Financial position
.............................................................................................................................................................................................
Proposed distribution of earnings
...........................................................................................................................................
Risk and capital management
.......................................................................................................................................................
Corporate governance report
.......................................................................................................................................
FINANCIAL STATEMENTS
Table of contents financial statements and notes ............................................................................................
Income statement and Statement of comprehensive income
..........................................................
Balance sheet
........................................................................................................................................................................................................
Statement of changes in equity
...................................................................................................................................................
Cash flow statement
....................................................................................................................................................................................
Notes
.................................................................................................................................................................................................................................
Five-year summary
.......................................................................................................................................................................................
Alternative performance measurements
.......................................................................................................................
Signatures
..................................................................................................................................................................................................................
Audit Report ...........................................................................................................................................................................................................
Working together
for better terms
Kommuninvest’s role entails oering secure and
cost- eective financing to its members and customers
– Swedish municipalities, regions, municipal companies
and other local government actors.
Basic concept
Together municipalities and regions can
borrow more securely and inexpensively than
each of them could individually Together the
local government sector can also increase its
expertise in financial management
280
+15
Kommuninvest is owned by
munici palities and regions
SEK 512 bn
Lending to customers amounted to
SEK billion at the end of
Kommuninvest has
the highest possible
credit rating AAAAaa
and a stable outlook
Green Loans
Green Loans were
introduced in for
financing environmental
and climate-related
investments Since the
launch the volume of
Green Loans has grown
to SEK billion
Organisation with clear
division of roles
Kommuninvest comprises two parts
The Kommuninvest Cooperative Society
(theSociety) and the credit market company
Kommuninvest i Sverige AB (the Company)
Kommuninvest Cooperative Society
Administers membership and the joint
and several guarantee and is responsible
for capital acquisition
The Board of Directors consists of
elected politicians from municipalities
and regions
Kommun invest i Sverige AB
Conducts the financial operations including
funding lending and liquidity management
The Board of Directors consists of individuals
with expertise in areas such
as public administration capital markets
and business development
Social Sustainability Loans
Social Sustainability Loans were launched
in to promote the development of social
sustainability in the local government sector
During the year the volume of granted
financing increased by SEK billion
Since
Since its inception in Kommuninvest has
helped reduce the Swedish local government
sector’s funding expenses by many billions of kronor
Ultimately this has benefited citizens
who have had access to improved public
services at both the local and regional levels
AAA
Aaa
3Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
KOMMUNINVEST IN BRIEF
Stable development
despite turbulent times
External developments have had a major impact on
local government finances over the past year. When the financial markets
were shaken in the spring of 2023, Kommuninvest held strong and
was able to conduct all of its funding as planned, despite market unease.
The year presented multiple challenges, largely in
the shape of external uncertainties. We experienced con-
tinued war in Ukraine, a greatly worsened security situa-
tion in Israel and Gaza, continued high ination, rising
interest rates and an occasionally volatile market, both
global and locally. Although the nancial markets were
profoundly shaken in the spring, Kommun invest held
strong and was able to conduct its funding as planned,
despite market unease. External developments had a
major impact on local government nances. Increased
ination and rising interest rates impacted costs and
contributed to a strained economic situation for muni-
cipalities and regions in .
Borrowing trend and increased investment
in environmental projects
Despite the external challenges, local government invest-
ment is needed for the future and our lending operations
developed well in . The total lending volume grew
by percent and, at the end of the year, amounted to
more than billion.
In October, we published our annual Local Govern-
ment Debt report. The report summarises developments
in investments, loans and debt in the local government
sector. Do take the opportunity to read it, if you haven’t
already! The forward-looking part of the report presents
a forecast of the debt trend in –. Looking
ahead, we see investment volumes growing at a relatively
good pace over the next few years, despite a challenging
external environment with decreasing development and
housing investment. Borrowing is expected to grow by
about percent annually between and and
byabout percent annually between and .
We also published two research reports during the year.
In March, we published the focus report, How high is
local government debt really? This report explains why
the Swedish local government sector stands out in a inter-
national perspective, in terms of its debt level. The key
reasons include Sweden’s decentralised welfare model
and its municipal companies’ extensive borrowing needs,
combined with the widespread use of internal banks. In
June, we published the report, Interest Rate Sensitivity
in Public Housing, which highlighted the importance of
adapting the sector’s debt management strategy to the
economic circumstances of each area of operations.
In , we noted increased need for investment in
environmental projects and we also experienced a break-
through year for Social Sustainability Loans. It is worth
mentioning, for example, that municipal housing com-
pany Botkyrkabyggen, in the Municipality of Botkyrka,
south of Stockholm, was granted a Social Sustainability
Loan of . billion earlier in the year. This involves
amajor long-term social initiative in the areas of Alby,
Fittja and Norsborg. In November, we also approved
asimilar Social Sustainability Loan to the municipal
housing company in Enköping.
In relation to total lending (based on disbursed volume),
Green Loans increased by almost percentage points in
, amounting to about percent at the end of the year.
Also at the end of the year, Social Sustainability Loans
had achieved approved investment projects, . bil-
lion in loans granted and . billion in loans disbursed.
Sustainable bond issuer
Over the year, we established ourselves in earnest as
sustainable issuer of Green Bonds in the market.
Wehave also issued Green Bonds in and , with
our issues continuing to meet strong demand in the
market. Having long-term investors is key to Kommun-
invest’s opportunities to secure cost-efcient funding of
the local government sector’s green transition. Kommun-
invest now has a total of billion outstanding in
Green Bonds – of which ve are denominated in ,
two in and four in .
Changes in the operations
The Annual General Meeting of the Kommuninvest
Cooperative Society was held in March, with a hybrid
setup, with in-person attendance in Stockholm. In connec-
tion with the Annual General Meeting of the Society in
March, Linda Frohm was elected as the new Chairman of
the Kommuninvest Cooperative Society and Erik Langby
was elected as the new Chairman of Kommuninvest
iSverige . Shortly thereafter, on April, Katarina Ljung-
qvist was appointed as the new of Kommun invest.
She took on the role of for both the Kommuninvest
Cooperative Society and for Kommuninvest i Sverige .
4
Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
KOMMUNINVEST IN BRIEF
Multi-year summary Kommuninvest i Sverige AB
Balance sheet total SEK billion
Lending (recognised value) SEK billion
Net profit SEK million -
Members total
of which municipalities
of which regions
Core Tier I capital ratio
Tier I capital ratio
Total capital ratio
Leverage ratio
Green Bonds ()
Uridashi ()
Private placement ()
ECP Euro-Commercial Paper
Programme ()
Swedish Benchmark
Programme ()
Benchmark funding
other currencies
()
FUNDING PORTFOLIO
BY PROGRAMME
MARKET SHARES
LOCAL GOVERNMENT LOAN FINANCING
Funding via
Kommuninvest
()
Bank funding
()
Funding through
proprietary
funding
programmes
()
Municipalities
()
Municipal
housing
companies
()
Other
municipal
regional
companies
()
Municipal energy
companies
()
Regions
()
LENDING PORTFOLIO
BY BORROWER CATEGORY
) Forecast regarding outstanding funding (figures in brackets refer to actual
outstanding funding in accordance with municipalities’ and regions’ own
Annual Reports as per December )
All charts refer to December Figures in parentheses refer to December
) Some lending to municipalities is on-lent to municipal
companies through municipal internal banks
5Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
KOMMUNINVEST IN BRIEF
Full speed towards
“Kommuninvest 2027”
Although 2023 was pervaded by strong inflation and rising
interest rates, we at Kommuninvest continued to be able to deliver stable
loans on favourable terms. It was also a year in which we initiated an
extensive development process for Kommuninvest’s future.
Now is the time to summarise the nan-
cial year. It was an incredibly exciting year in
itself, but also an important starting point for
the major development process initiated during
the year and that will give us an even better
Kommuninvest by .
It was also a particularly interesting year for
me personally. After eight years as a member of
the Board of Directors of the Company, I was
entrusted on March with taking over the
Chairman’s gavel, while, at about the same time,
on April, our new , Katarina Ljungqvist,
took ofce. In , our former , Tomas
Werngren, who has served us so well for very
many years, chose to move on to new challenges
outside Kommuninvest. Thank you Thomas for
all that you have done and for what you have
meant to Kommuninvest!
Of course was very much coloured by
the general economic situation among Swedish
municipalities and regions given strong ina-
tion, sharply increased interest rates, recession
concerns and central governments having to
show restraint to not make ination worse.
Over the year, our work within Kommuninvest
focused on three areas:
• Deliveries to members and customers in
the form of loans on favourable terms.
We enjoyed continued favourable develop-
ment in Green Loans as well as in Social
Sustainability Loans and were able to
provide good support and service for our
customers nancial work. We now have
a percent market share of the market
when we look at the combined loans
market for municipalities and regions.
• Persistent advocacy for Kommuninvest to
be spared the continued imposition of the
risk tax. Although we have a good dia-
logue with the Ministry of Finance, much
more must fall into place, requiring that
we also conduct advocacy efforts in
Brussels.
• We initiated an extensive development
process to modernise Kommuninvest and
to secure our operations for the future.
Looking ahead, we will, for example need
a new business system in place, as well as
other new IT support functions. In addi-
tion, all governance documents will be
reviewed and we intend to further sharpen
our customer focus. By , these efforts
will have been completed.
It is naturally highly satisfying for us to be able
to present a good nancial result for
despite a situation in which challenge posed
by the risk tax has continued to hit us with full
force. We have every reason to be proud of what
we within Kommuninvest achieved over the
year in terms of the operations, our nancial net
prot and innovative strength for the future!
Erik Langby
Chairman of the Board Kommuninvest AB
It is naturally
highly satisfying
for us to be able to
present agood
financial result for
2023 despite a
situation in which
challenge posed
by the risk tax has
continued to hit us
with full force”
6 Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
CHAIRMAN’S STATEMENT
I stepped into the role of for Kommunin-
vest in April . With my extensive back-
ground in banking and nance, I can bring
experience and skills from the nancial sector
into a new context with owners and customers
in the welfare sector. This has been both stimu-
lating and a real privilege. I would like to take
this opportunity to extend my gratitude for the
warm and open reception I received from my
colleagues and from the members and custom-
ers I have met over the year. Despite continuing
external challenges, brought great devel-
opment in business volumes and, particularly
gratifyingly, in sustainable nancing. For this
reason, I am all the more certain today that we
can be a powerful resource in the crucial rea-
lignment taking place in society, despite the still
challenging external environment.
Challenging external environment
Last spring, the nancial markets were deeply
shaken when rst Silicon Valley Bank collapsed,
followed by two more banks, as well as
Credit Suisse. In parallell, we continued to expe-
rience a challenging external environment, in
terms of the geopolitical, security, ination and
interest situation alike. Under circumstances
like those, it is necessary to keep several
thoughts in mind simultaneously. The geopoliti-
cal situation impacts domestic security, bringing
an increased risk of cyberattacks, for example.
Rising ination and interest rates impacted our
cost scenario and contributed to an arduous
economic position over the year, not at least for
municipalities and regions.
One thing that was clear over the past year
was that our robust business model held strong
even in a troubled external environment and an
arduous, high-ination economy in Sweden. For
our customers, we are a stable and transparent
bond issuer in the market and, backed by strong
owners, we are able to safeguard highly favour-
able lending capacity even in troubled times.
Maintaining a high level of preparedness to
address security and continuity is an issue grow-
ing continuously in importance and on which
Kommuninvest must stay focused.
Increased investments in the water and sewerage
sector, as well as in environmental projects
We perceive clear increases among investments
in operational premises and infrastructure by
Swedish municipalities and regions – particu-
larly in the water and sewerage sector, but also
in environmental projects. An example of oper-
ations recently granted a Green Loan is
Sjöbohem. Not only is self-sufciency in energy
achieved through electricity produced in-house
from renewable sources, an energy system is
also built that can store excess energy for later
use in the form of hydrogen gas. This is one of
many positive example of investments contri-
buting to the crucial realignment.
Lending growth increased towards the end of
the year, ending up at slightly more than per-
cent for the year, higher than forecast. We fore-
Maintaining a high
level of prepared-
ness to address
security and
continuity is an
issue growing
continuously
in importance and
on which
Kommuninvest
must stay
focused”
Challenging international
situation, strenuous economy
and urgent realignment
Rising inflation and interest rates impacted our cost scenario and
contributed to an arduous economic position over the year, not least for
municipalities and regions. We are a stable and transparent bond issuer in
the market and, backed by strong owners, we are able to safeguard
highly favourable lending capacity even in troubled times.
7Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
PRESIDENT’S STATEMENT
see a slightly lower growth rate going forward
and expected it to be about percent over the
next three years. Allowing for a continued
challenging external environment, forecasting
declining development and housing investment,
we still expect investment to grow at a relatively
good pace – particularly given the need for
realignment to a sustainable society.
More greens projects and a breakthrough
for Social Sustainability Loans
During the year, the Municipality of Botkyrka
and public housing company Botkyrkabyggen
were granted a Social Sustainability Loan of
. billion. This involves a major long-term
social initiative in the areas of Alby, Fittja and
Norsborg. It is highly gratifying that the public
housing company in Enköping has also been
granted a similar Social Sustainability Loan.
Both of these initiatives have contributed
strongly to the year’s increase of billion
ingranted nancing.
Net profit
We are pleased to have again delivered a
positive operating prot for . This was
achieved despite the continued extensive and
negative impact of the risk tax. Operating prot
amounted to slightly less than million
following the positive impact of unrealised
changes in market value of about
million. Rising interest rates over the year
also helped strengthen net prot through
signi cantly higher net interest income. In our
assessment, the risk tax will continue to burden
earnings in and we will, over the year,
continue our pro-active efforts for Kommun-
invest not to be subject to this tax.
Kommun invest i Sverige
Katarina Ljungqvist
President and CEO
8 Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
Through our lending, we provide conditions for Swedish
municipalities and regions to invest cost-efciently in wel-
fare. Kommuninvest’s share of local government sector bor-
rowing has increased in recent years. Today we account for
percent of lending to the local government sector. This is
explained by the fact that an increasing number of munici-
palities and regions have joined as members, generating
additional economies of scale which, in combination with
superior accessibility and good advice, strengthen Kommun-
invest’s competitiveness.
1. Funding
Kommuninvest raises funds on an ongoing basis, both in
Sweden and in the international capital markets. The local
government sector’s inherent stability combined with our
members’ joint and several guarantee undertaking means
that our repayment capacity is deemed highly secure. From
acredit risk perspective, Kommuninvest’s funding is regarded
as equivalent to the Swedish central government’s funding.
The low risk, combined with Kommuninvest’s history and
good reputation in the capital market, affords us access to
nanciers who generally lend to us on benecial terms. To
safeguard our lending and to always be able to offer good
new lending capacity, we always maintain aliquidity reserve.
2. Loan application and credit check
When one of Kommuninvest’s customers decides to borrow
money for one or more investments, the municipality or the
region contacts Kommuninvest to apply for a loan. Nor-
mally, our lending is not linked to any specic purpose.
As we know our customers well, we have a good knowl-
edge of their nancial situation. We provide credit based on
lending frameworks and credit decisions. The lending frame-
works indicate the total credit scope for each municipal/
regional group. If needs arise beyond that lending framework,
an in-depth analysis is performed. The lending frameworks
are thus dynamic and part of a continuous and active credit
process. Credit decisions are to be kept within these limits.
3. Green Loans and Social Sustainability Loans
Kommuninvest runs two sustainable nancing programmes.
These are designed to foster local and regional sustainability
efforts. Green Loans are provided for environmental and
climate initiatives, while Social Sustainability Loans are pro-
vide for social initiatives. For municipalities and regions to
be granted loans within these programmes, the investment
projects concerned must meet predetermined criteria and
be included in one of the dened project categories. Loan
applications are examined by the Environment Committee
or the Social Sustainability Committee, as relevant. In turn,
Kommun invest’s sustainable lending is nanced by funding
through special bonds that are acquired by Swedish and
international investors. To date, a large number of Green
Bonds have been issued. Social bonds are issued when the
volume of social lending has grown sufciently large.
4. Disbursement of loans
Thanks to our close cooperation with our customers and our
efcient and highly digitalised credit provision, it takes only
a short time between the customer’s loan application and the
disbursement of the loan. Whether it concerns a Green Loan
or a Social Sustainability Loan, we handle the specic admin-
istration and documentation required to operate sustainable
nancing programmes – such as for external review and for
the reporting of the impact to investors.
5–6. Advice and debt management through KI Finans
Throughout the term of the loan, the borrower is in continu-
ous contact with our nancial advisers and has access to all
of Kommuninvest’s combined expertise. In the web-based
nancial management service Finans, our customers have
access to transaction management, analyses and reporting of
liabilities and assets.
How Kommuninvest
helps build welfare
Kommuninvest accounts for most of the loan financing for
the local government sector’s investments. This applies to housing, schools,
nursing homes, swimming pools and infrastructure, among other things.
9Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
OUR MISSION
Investment needs
Kommuninvest is always able to lend money to munici-
palities and regions. When a municipality or region has
estimated the expense of the investment/s, an applica-
tion is submitted for a loan from Kommuninvest. If an
investment project contributes to a favourable impact
on sustainability, a Green Loan or Social Sustainability
Loan may be relevant.
Funding
Disbursement of
loans
Advisory
service
KI Finans
Green Loans
and Social
Sustainability
Loans are approved
by the relevant
committees
–
Dialogue with
financial advisers
on loan application
and the opportunity
to borrow
s ustainably
Continuous
debt management
through KI Finans
10 Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
OUR MISSION
512
SEK bn
Of which percent are Green Loans
Lending
Helps to meet
Sweden’s
sustainability
targets.
2,586
users of
KI Finans
Helps all of
Sweden live.
Creates stable
finances in
municipalities
and regions.
Contributes to the
general build-up of
welfare in Sweden.
373
SEK million in
distributable funds
1) Dividend expected to be distributed in 2024,
for the 2023 financial year.
Number of members Kommuninvest’s
market share
0
10
20
30
40
50
60
2023201820152012
0
50
100
150
200
250
300
2023200719971987
Kommuninvest’s share of local government funding
2014 2017 2022
The compilation refers to Kommuninvest’s share of borrowing among
all of Sweden’s municipalities and regions, including both members and
non-members. Most of the municipalities and regions with no borrowing
from Kommuninvest are non-members, meaning they are not entitled to
raise loans from Kommuninvest. Data for 2023 were not available at the
time of publication.
– – –
11Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
OUR MISSION
Our view on sustainability builds on the Swedish local govern-
ment sector’s mission and actions are conducted in accordance
with the Local Government Act and other relevant legislation.
It is therefore consistent with the international framework of
the Fundamental Conventions, the Guidelines for
Multinational Enterprises, the Guiding Principles on
Business and Human Rights, and the Global Compact.
Towards more complete integration of sustainability
It is becoming increasingly clear that the nancial market can
inuence the transition to more sustainable societies. The ’s
action plan for nancing sustainable growth, launched in
, is now being implemented at a high rate in regulations
also being implemented by those affected. The action plan
aims to direct capital towards sustainable investments, to man-
age nancial risks caused by climate change, environmental
degradation and social vulnerability, and to promote transpar-
ency and a long-term perspective in nancial and economic
activities. The Company’s work to be able to meet the manda-
tory and voluntary regulations that are planned, including new
requirements for the integration of sustainability factors in
strategies and business processes, as well as new ofcial report-
ing, have been in progress within the Company since .
Itis also increasingly important to consider sustainability in
the funding market. Among other things, Kommuninvest can
rely on good sustainability ratings from three leading players.
Financing, knowledge, responsibility
Kommuninvest contributes through effective and sustainable
nancing of municipal investments in long-term sustainable
welfare in Sweden’s municipalities and regions. A strong
ownership structure and the joint and several guarantee
provided by the Society’s members allow us to cost-efciently
and stably fund our operations. Our members’ extensive
societal mission and borrowing needs, as well as Kommun-
invest’s position, being responsible for a sizeable proportion
of members’ funding, generate economies of scale.
We support our members’ sustainability work with nanc-
ing products clearly focused on environmental and social
sustainability and that contribute to the development of
market practices. Since its launch in , Kommuninvest’s
green nancing programme has grown to become one of the
largest in the Nordic region. Since , a new product has
been offered, Social Sustainability Loans, aimed specically
at fostering systematic work with social initiatives. In addi-
tion, during , the rst steps were taken towards integrat-
ing “ factors” into provision of credit, initially by taking
environmental and climate factors into account.
We are also working to build knowledge on debt manage-
ment, as part of good nancial management in the local gov-
ernment sector. By extension, this should give elected repre-
sentatives the best possible room for manoeuvre in delivering
welfare services to citizens. Given its socially benecial role,
it is crucial that Kommuninvest be governed clearly to ensure
the operations are conducted responsibly.
Stakeholder dialogue
We maintain a continuous dialogue with those stakeholders
who, in various ways, inuence and are affected by our oper-
ations, to identify the sustainability issues with which the
Group should work. Our dialogue with stakeholders involves
meetings with members, customers and employee delegates,
as well as with representatives of government ministries and
national authorities. We also conduct surveys among key
stakeholders on an ongoing basis, including members, cus-
tomers, employees and investors, both more traditional satis-
faction surveys as well as more distinct sustainability surveys.
Swedish municipalities and regions are our most impor-
tant stakeholder group. As members, they own and govern
our operations, although, when they choose to borrow from
us, they are also our customers. In their capacity as owners,
our dialogue with members is conducted mainly with elected
politicians. In their capacity as customers, our dialogue with
members is conducted mainly with local government of-
cials, generally with specialists in economics and nance.
Theresults of the latest stakeholder survey are included in
the Annual Report.
As part of our preparations for new demands on sustain-
ability reporting in accordance with the ’s Directive
(Corporate Sustainability Reporting Directive) and to meet
the requirement that the information submitted shall take the
“double materiality principle” into account, the Company is
planning a more comprehensive stakeholder survey. The new
requirements regarding sustainability report are applic able
for the Company as of the nancial year.
Governance of sustainability work
The Sustainability Manager is responsible for managing,
developing and reviewing Kommuninvest’s sustainability
work in close cooperation with the Executive Management
Team and the department heads, who are responsible for taking
sustainability aspects into account within their respective
areas of responsibility. Guidelines for sustainability work are
detailed in a Sustainability Policy adopted by the Company’s
Board of Directors, and are further specied in supplemen-
tary policies and instructions relating to occupational and
personal safety, conicts of interest, security, equality and
diversity, bribery and hospitality, and regulatory compliance.
Sustainability work is reported annually to the Board, and is
supplemented by reviews on topical themes.
Sustainability report 2023
Our sustainability work builds on the expectations of our stakeholders and on our mission
to finance local government development and investment for a beneficial and sustainable
society. The ambition is to integrate sustainability throughout our operations.
SUSTAINABILITY REPORT
12 Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
The sustainability work considers the environment and climate, social aspects and governance, focusing partly on
the core operation of sustainable financing and partly on the work within the organisation. Sustainable financing refers
to the oering to members/customers and investors, and includes both traditional lending and sustainable financing
programmes, as well as consulting, research and education, focusing on the financing of welfare investments. That the
operations are conducted responsibly, in accordance with applicable laws, regulations and directives, as well as with a
sustainable organisation able to meet stakeholder expectations and that is in focus for the more internally-oriented work.
Vision
Finance the development of the local
government sector and investments
for a sound and sustainable society
Owner directives
Take economic, social and environmental
sustainability into account throughout
the operations, in terms of both the direct
and indirect eects.
Climate plan
Provide tools and support enabling the
municipal and regional sectors to achieve
Sweden’s target of climate neutrality by 2045.
Sustainability framework and overarching objectives
SUSTAINABILITY REPORT
13Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
To support Kommuninvest’s mission to nance the local
government sector’s development and investments for a ben-
ecial and sustainable society, environmental and climate
efforts are afforded a broad allocation. This spans lending
and credit risk management, including sustainable nancing
programmes, to advice, research and analysis and also
includes the operations’ own environmental impact.
Contribute to the realignment of the
local government sector
As the local government sector’s largest lender, Kommun-
invest is able to contribute to society’s realignment process,
in which the local government sector plays an important role
because it is under its auspices that a considerable part of the
basic social infrastructure is managed and developed. Many
local government authorities have stated targets entailing
climate -neutrality as early as in – the development of
target-oriented investment plans is in progress. Investments
in, for example, energy systems, trafc systems and property
portfolios are affected
To reect the current realignment process among mem-
bers, Kommuninvest has adopted a climate plan stating that
Kommuninvest shall provide tools and support enabling the
municipal and regional sectors to achieve Sweden’s target of
climate neutrality by .
Environmental and climate work
Kommuninvest has continued its eorts to comprehend and value the financial impact of
environmental and climate factors on local government borrowers, and has introduced an
initial version of environmental and climate factors in its credit assessment.
The target means that the municipal and regional operations financed by Kommunin-
vest shall have no net emissions of greenhouse gases into the atmosphere in 2045.
To monitor progress in the desired direction, eorts have been initiated to enable the
calculation and subsequent follow-up of the financed emissions, including how they
relate both to Sweden’s long-term and intermediate targets. The focus is initially on
the lending portfolio, because that part of the balance sheet has the clearest connec-
tion to the greenhouse gas emissions that Kommuninvest finances.
Climate targets
Kommuninvest shall provide tools and support
enabling the municipal and regional sectors to achieve
Sweden’s target of climate neutrality by
SUSTAINABILITY REPORT
14 Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
Kommuninvest elects to follow Sweden’s climate objectives
as we represent the entire local government sector in nanc-
ing matters and not all Swedish municipalities and regions
have chosen to adopt more specic climate targets oftheir
own with earlier deadlines than those set nationally.
Kommun invest supports local climate efforts regardless
ofthe chosen target date.
The target entails the municipal and regional operations
nanced by the Company not having any net emissions of
greenhouse gases into the atmosphere by . As a conse-
quence, the Company has initiated work to be able to calcu-
late its nanced greenhouse gas emissions and to set interme-
diate targets. In , the ambition is to have established an
exit value for greenhouse gas emissions in the loan portfolio.
The climate target is part of the Company’s climate plan,
which stakes out the direction in which Kommuninvest, in its
role as a credit institution, can foster the local government
sector’s environmental and climate realignment. The plan
indicates several of the operations’ functions as relevant in
being able to offer support, knowledge and tools. Further-
more, in its climate plan work, the Company must act via all
the communication channels at its disposal, including its dia-
logue with customers, follow-up with members, and ongoing
public reporting.
Analysis of environmental and climate risks
This work is linked to extended demands that credit institu-
tions be required to take aspects of sustainability into
account when providing and monitoring credit, as stipulated
in the European Banking Authority’s () guidelines. As
mentioned, the agenda for establishing more sustainable
regulation of the nancial sector has largely been dened
through the ’s action plan for nancing sustainable
growth. Ultimately, it is a matter of how the nancial sector
can help achieve the Paris Agreement’s objective of limiting
global warming and supporting the capacity to adapt to the
consequences of climate change.
With regard to risks, the Company has been working
to identify and dene the environmental and climatic factors
with the greatest potential nancial impact on its borrowers.
At an initial stage, four factors have been indicated as more
highly prioritised, two of which are categorised as physical
risks (ooding, landslides and erosion, as well as polluted
water or shortage of drinking water) and two as transitional
risks (negative effects on water sources and/or incidence of
water, as well as greenhouse gas emissions.
Key gures have been developed to monitor developments,
in accordance with a method based on the ’s guidelines
and inspired by a dialogue with Kommuninvest’s corre-
sponding organisations in the other Nordic countries. Since
the autumn of , environmental and climate factors are
integrated into the Company’s credit approval and monitor-
ing processes.
Adapting Green Loans to the taxonomy
Kommuninvest launched a green nancing programme in
, the overall purpose of which is to promote the transi-
tion to a low-carbon and climate-resistant society. In ,
the programme received the Swedish Miljömålspriset envi-
ronmental objectives award for its contribution to the envi-
ronmental objective of limiting climate impacts. At the end
ofthe year, () investment projects had been approved
for Green Loans, corresponding to a total . (.)
billion in granted nancing. Of the granted funds, .
(.) billion had been disbursed by the end of the year, hav-
ing been nanced through Green Bonds outstanding for
avalue of . (.) billion.
Financing can be granted for investment projects within
any of the eight categories included in the Company’s Green
Bonds framework: environmental measures, water manage-
ment, climate adaptation measures, green buildings, energy
efciency, waste management, sustainable transport and
renewable energy.
Today, the largest category is green buildings, with the
energy performance of the buildings nanced to be at least
percent better than that required under national building
regulations. From , climate requirements have been
introduced for the construction phase of new construction
projects, meaning that concrete climate-oriented measures
are implemented in the construction project and that the
building’s climate impact during the construction phase has
been calculated.
In , the Company initiated efforts to gradually/par-
tially adapt the framework to the taxonomy, regarding
the terms for qualifying to receive Green Loans. The rst
stage of this adaptation entails all project categories for
which this is deemed possible and reasonable being required
to meet the criteria for “signicant contribution” in relation
to at least one of the ’s six environmental targets. In late
, a public remittance process was conducted with pro-
posals for updated terms for Green Loans. The Company is
addressing the proposals with the intention of publishing
anew framework for Green Bonds in .
Direct environmental and climate impacts
are low and decreasing
In addition to the measures being implemented to help
decrease indirect emissions through the nancial operations,
continuously decreasing our own direct climate footprint
remains a priority. In focus are the ofce operations, which
are predominantly conducted on our own premises, and
business travel. Installation of solar panels, new ventilation
fans and replacing electrically powered cooling units with
district cooling have helped reduce electricity consumption
by percent since , and overall energy consumption by
percent. Business travel remains at signicantly lower levels
than before the pandemic, and the proportion of train jour-
neys has increased. In , the total climate footprint fell
short of tonne
CO
e per employee for the rst time, and was
also below tonnes
CO
e for the operations as a whole.
SUSTAINABILITY REPORT
15Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
Kommuninvest’s nancing offering means that essential wel-
fare investments can be implemented in a more appropriate
manner and at a lower cost for taxpayers. This reinforces the
welfare society with, for example, new or refurbished nurs-
ing homes, schools, homes and care facilities.
For Kommuninvest to be able to meet its stakeholders’
expectations in the long term, it is crucial to have a sustaina-
ble organisation. Our high level of ambition and the insight
that each employee can make a difference are what guide us in
this work. Communicative leadership, committed employee
collaboration and a focus on skills are essential for success.
Among other things, this entails striving for an organisa-
tion characterised by a strong culture and favourable work-
ing conditions, with healthy and motivated employees and
managers and in which continuous learning is stimulated. It
also entails fostering equality, diversity and development and
being an inclusive (non-discriminatory) workplace. For sev-
eral years, Kommuninvest has been working pro-actively
with the health concept Sustainable Daily Life, seeking to
promote a healthy lifestyle, with a balance between work,
leisure and parenting.
Societal commitment and local coordination
To meet stakeholder expectations regarding sustainability/
and to enhance the impact of our efforts, we engage in
relevant social issues and collaborate with others. Among
other things, we are engaged in the strategic innovation pro-
gramme Viable Cities, which focuses particularly on nanc-
ing aspects for the towns and cities working on Climate
contract . We are collaborating with Public Housing
Sweden and the environmental institute within the
framework of a project developing a climate roadmap for
public housing companies. We are also a member of the tech-
nical committee linked to the development of a Swedish
standard for measuring electrical power output. We have
also established cooperation with special-interest and sector
organisations in the local government sector, such as)
and Swedish Water (Svenskt Vatten.
Our local collaboration programme focuses on education,
culture and leadership – we seek partners with a pronounced
social commitment and values matching ours.
A social financing market in Sweden
As a result of demographic changes, increased segregation
and an increased number of socio-economically vulnerable
areas, Swedish municipalities and regions are facing signi-
cant challenges. Considerable local differences in people’s
conditions and living conditions exist, with the challenges dif-
fering between different types of municipalities and regions.
To foster development towards increased social sustain-
ability in Swedish municipalities and regions, Kommuninvest
launched Social Sustainability Loans in . This product
makes it possible to nance socially oriented investments
through loans, in a manner promoting improved governance,
measurement of the effects and follow-up of the work. Social
Sustainability Loans can help strengthen local or regional
sustainability work, show its benet and facilitate the
development of practices, collaboration and measurement
of effects.
Developed infrastructure for sustainable investments
Kommuninvest seeks to participate in various ways in the
development of market practices for nancing social invest-
ments. Among other things, this is done within the frame-
work of the standardisation work on measuring the effects
ofinitiatives being conducted by the Swedish Standards Insti-
tute (), to develop a shared terminology and harmonised
approaches. The Company is also represented in a working
group linked to the national initiative to coordinate Sweden’s
Agenda process. The working group’s mission is to
propose how incentives and structures for nancing solu-
tions could be developed to help accelerate change with
aparti cular focus on social sustainability objectives.
Growth for Social Sustainability Loans
At the end of the year, () Social Sustainability Loans
applications had been approved, corresponding to a total of
. (.) billion in granted nancing. The volume of dis-
bursed loans increased to . (.) billion. The nancing
applications granted during the year comprised long-term
initiatives in housing and living environments in Botkyrka
and Enköping, a call centre in Tanum and a sports facility
inGävle.
Social Sustainability Loans seek to foster a culture of
assessing effects in the local government sector and
syste matic social sustainability work on issues including
knowledge building and development of methods. The
experience gained from the initial years of the programme
is that con siderable potential exists.
Social factors in the credit process
A process has been initiated to examine the data available
forassessing the social risks associated with the Company’s
borrowers. The purpose is to end the process regarding how
these indicators affect members’ nancial position and, by
extension, that of the company, to then develop a model for
assessment of social risk in the credit process. The aim is to
complete a rst version of such assessment factors in .
Social sustainability
The Company’s financing creates the conditions for the most central welfare services in society
to be maintained. The work to manage social factors in the business also includes social aspects
of employer responsibility, the role in the local community and a new and growing social
sustainability financing programme.
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Helping develop a
culture of impact
measurement
Kommuninvest’s members and customers have observed that social sustainability
initiatives are measured, followed up and evaluated on a relatively small scale
within the local government sector.
Through the application process for Social Sustainability Loans (SSLs),
borrowers are given support in developing an “e ect chain” by breaking down
the long-term objectives for a particular target group into planned initiatives,
anticipated results and desired e ects, see the illustration below.
In Kommuninvest’s long-term undertaking to request feedback on investments
and social initiatives, Social Sustainability Loans contribute to continuity in review
procedures and possible systematic approaches in an area where the connection
between what is carried out and what is achieved is not always obvious.
“Although we conduct a number
of activities for our tenants,
we rarely follow up on these or
measure their e ects. We have
now gained an opportunity to
learn a new process that ’forces’
us to plan, document and follow
up our initiatives. We hope that
this process will help us work
more systematically. It should be
evident what worked well, what
challenges remain and what we
should avoid next time.”
Johan Anund, Social Housing
Coordinator, Tanums Bostäder AB.
From the loan application “Upgrading of
the Höjden Area in Tanumshede”
Long-term objective Starting point Target group Social initiative Outcome E ect
What is the long-term
objective?
What are the needs/
challenges – what do we
want to improve with
our initiative?
For what group of people
do we seek to achieve an
improvement/transition?
What do we do to bring
about an improvement/
transition?
What change do we expect
among the target group?
What part of the change
can be attributed to the
initiative (and would not
otherwise have arisen)?
Member municipalities
Member municipalities with SSLs
Other municipalities
A well-developed culture of measuring eects
Kommuninvest’s members and customers have observed
that social sustainability initiatives are measured,
followed up and evaluated on a relatively small scale
within the local government sector.
Through the application process for a Social Sustain-
ability Loan, borrowers are given support in develop-
ing an “effect chain” by breaking down the long-term
objective for a target group into planned initiatives,
anticipated results and desired effects, see the illustra-
tion below.
Kommuninvest’s long-term undertaking to request
feedback on investments and social initiatives imple-
mented means that Social Sustainability Loans also
contribute to continuity in review and possible
systematic approaches in an area where the connection
between what is carried out and what is achieved is
not always obvious.
Given that Kommuninvest does not require the
desired effects to actually be achieved, borrowers also
have an opportunity to review and change initiatives if
the results were not what had been desired and antici-
pated. Even in those cases where the desired results are
not achieved, Social Sustainability Loans therefore
have the potential to contribute to collective learning
and to the development of the local social sustain-
ability work.
“Although we conduct a number of activities for our tenants, we rarely follow them
up or measure their effects. We have now gained an opportunity to drum in a new
procedure. This process ’forces’ us to plan, document and follow up our initiatives.
We hope that this process will help us work more systematically. It should be evident
what worked well, what challenges remain and what we should avoid next time.”
Johan Anund, Social Housing Coordinator at Tanums Bostäder , from the application
“Upgrading of the Höjden Area in Tanumshede”
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With regard to the governance/nancial sustainability dimen-
sion, our work has a broad scope and essentially refers to:
• protecting Kommuninvest’s ability to offer cost-
efcient and stable nancing of public investments
• advice to promote good nancial management,
gover nance in nancial balance and sound nancial
manage ment
• long-term analysis for sustainable municipal nances
• to conduct a responsible business, in line with the rules
that apply and to live up to the demands and expecta-
tions that may be imposed on a leading actor.
Strategy for long-term member benefit
Kommuninvest works long term to optimally full the task
of nancing the Swedish local and regional sectors’ develop-
ment and investing in a benecial and sustainable society in
the best possible way.
Against the background of an analysis of global trends, the
Company’s starting position and a vision for the future, three
strategic areas have been identied that, combined with
amotion study, form the basis of the Company’s strategic
business plan.
The three strategic areas that have been identied empha-
sise the importance of the Company being the local govern-
ment sector’s lender, that the Company must offer sustain-
able and efcient loan nancing, and that the Company
must have a simple and value-generating organisation.
Increasing awareness on local government financing
To increase knowledge of the local government sector’s long-
term nancial conditions, we conduct our own research and
publish reports detailing trends in local government invest-
ments and their nancing, including funding and debt
analyses. The data are made available in public databases.
Knowledge is disseminated on an ongoing basis by means of
seminars and individual meetings. We also collaborate with
higher education.
Among other things, Kommuninvest has for several years
partnered with the University of Örebro to promote research
on the local government sector’s debt management and
nancial conditions, and we nance both a chair and
post-graduate studies. Kommuninvest is also part of the
reference group afliated with the university’s Master’s
programme in Sustainable Business
Good governance and sound debt management
Financial management is of great importance in being able to
secure long-term sustainability in the local government
sector’s nances, which is particularly important given the
challenges the local government sector faces as a result of
demographic changes and an uncertain economic environ-
ment. Kommuninvest continuously adds new knowledge in
this area, through continuous support in analysis and consid-
erations. In , an updated advisory material was pre-
sented for those designing or revising a nance Policy in the
local government sector. Several reports were also published
on themes concerning local government debt and local govern-
ment debt management, as well as a focus report on interest
rate sensitivity and economic conditions in public housing.
Reports from Kommuninvest’s Research Working Group
Among other things, Kommuninvest’s Research Working
Group seeks to nance research projects assessed as interest-
ing and signicant and that address the challenges faced by
the local government sector. Within the framework of this
programme two new reports were published during the year
– one on the spread of reforms in the local government sector
and one on productivity trends in municipal companies. The
research should be able to contribute to a more efcient utili-
sation of public resources.
Responsible operations
A clear division of responsibilities and a focus on owner con-
trol, corporate governance and ethics shall help the Group to
comply with the laws, regulations and rules applicable to the
operations. Control and review activities are designed to
meet the demands that can be made on a systemically impor-
tant player. The work builds on the following circumstances:
• A clear division of responsibilities between the parent
organisation and the business operations. The Society
addresses membership and ownership matters, while
the Company addresses business issues.
• Annual ownership directives indicate the Company’s
course ahead. Risk appetite is low and professional
conduct, strict ethical requirements and good business
practices are to permeate the operations.
• Clearly regulated requirements on matters of corporate
governance, risk management and compliance, including
in areas such as money laundering and anti-corruption.
Governance/financial
sustainability
Kommuninvest oers financial services and products that support the work of the munici-
palities and regions regarding good financial management and sustainable development. This
provides conditions for public funds to be used as eciently as possible, to increase the stability
of the financial system and to promote the local government sector’s sustainability work.
SUSTAINABILITY REPORT
18 Kommuninvest i Sverige AB, reg. no. 556281–4409Annual Report 2023
• Integrated sustainability work, in terms of both direct
and indirect impact.
• Commitment to relevant societal issues and coordi-
nation with others, to meet stakeholder expectations
and increase the effect of our efforts.
Ethics at the fore
We shall run nancially sound and sustainable operations.
Both the Company’s Sustainability Policy and Code of Con-
duct emphasise the importance of ethical and responsible
action. Our success depends on the trust of members, cus-
tomers, counterparties, investors, employees and authorities.
Any conicts of interest are to be identied and handled
efciently and effectively to prevent negative impacts on
customers, members or the Company.
With regard to tax matters, the Company’s actions must be
responsible, correct and transparent. The Company shall not
participate in transactions or make products available that
may be questionable in relation to applicable tax legislation.
Where there is any doubt, the Company shall refrain from
participating. Ethics shall always be taken into account.
Anti-corruption and anti-money laundering measures
A risk-based approach is applied to ensure that the Compa-
ny’s products and services are not used for money laundering
or terrorist nancing. Suspicions of serious irregularities that
could entail or lead to abreach of law are to be reported.
Such violations can also be reported anonymously via a
whistleblower function handled by an external party.
No suspicions of corruption or money laundering were
identied during the year.
The Company’s compliance department works to monitor
and control the Company’s compliance with laws and other
regulations. The department also provides advice to the
Company’s Board of Directors, and personnel, as well
as providing training in the area to enhance employees’
knowledge and vigilance.
Educational initiatives support our work
Employees and managers at Kommuninvest are expected
toparticipate in the educational courses that are offered to
ensure that the Company as a whole, as well as its individual
employees, have the knowledge required for the Company to
be able to full its assignment, including regulatory compli-
ance. A distinction is made between the educational needs of
new employees and those of other employees and managers,
as well as needs for refresher courses. A predominant share
of the courses offered in , and even in the preceding
year, focused on data security and cybersecurity, insider
information, bribery and corruption, as well as money laun-
dering and nancing of terrorism. Between and per-
cent of the employees offered these courses, took them.
Data security and cyber security issues have gained
renewed topicality following Russia’s invasion of Ukraine
in. Efforts to further raise the company’s preparedness
include information presented at internal company informa-
tion sessions, simulated phishing tests and awareness training.
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