Sustainability Report 2019
Kommuninvest’s basic concept and vision includes encouraging social development that is sustainable in the long term. By offering sustainable financing solutions, we foster the efficient use of tax revenues, financial stability and the local government sector’s work with the Sustainable Development Goals.
Our view on sustainability builds on the values of the Swedish local government sector, and our actions are conducted in accordance with the Local Government Act and other relevant legislation. It is therefore consistent with the international framework of the ILO Fundamental Conventions, the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, and the UN Global Compact.
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.
Kommuninvest’s role as the local government debt office and the node for financial cooperation in the Swedish Local government sector, means that we maintain relationships with a number of stakeholders who affect our operations in various ways and who are affected by our operations. We maintain an ongoing dialogue to identify the sustainability issues with which the Group should work. Our dialogue with stakeholders involves regular meetings with members, customers and employee delegates, as well as with representatives of government ministries and national authorities. Kommuninvest also conducts regular satisfaction surveys among key stakeholders, including members, customers, employees and investors.
Swedish municipalities and regions are our most important 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 officials, generally with specialists in economics and finance.
Specific sustainability surveys are conducted on a regular basis. The overarching results of the two surveys conducted to date are presented on page 15 in the PDF.
Governance of sustainability work
The Head of Sustainability is responsible for managing, developing and reviewing Kommuninvest’s sustainability work in close cooperation with the Executive Management Team and the department managers, 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 specified in supplementary policies and instructions relating to occupational and personal safety, conflicts of interest, IT 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 risk is the risk that Kommuninvest’s operations will directly or indirectly affect their surroundings negatively in terms of business ethics and corruption, including money laundering and terrorism financing, climate and environment, as well as human rights, including working conditions. Kommuninvest is primarily exposed to sustainability risks related to ethics, IT security and so-called green-washing, that is, the risk that environmental and climate-related investment projects that it funds fail to meet sustainability requirements.
Kommuninvest’s actions to address sustainability risks are largely governed by national and international regulations and guidelines alongside the Society’s Ownership Directive, internal instructions and policies. With regard to green financing, the Company’s sustainability risk is managed through its Green Bonds Framework, including the expert committee responsible for evaluating and approving investment projects for green financing.
Direct and indirect influence
Kommuninvest has both a direct and indirect sustainability impact.
Kommuninvest controls the direct impact, meaning this lies within the Company’s direct decision-making mandate and efforts can provide concrete qualitative and quantitative effects. Direct impact includes, for example, customer and employee relations, business travel, office premises, local collaboration, etc.
The indirect impact is defined as Kommuninvest’s sustainability impact through its balance sheet, primarily through lending operations and business relationships with borrowers, investors and counterparties. This influence is mainly related to the local government authorities’ choice of investments and how these contribute to a sustainable society.
Although Kommuninvest has limited direct impact, its indirect impact is extensive, with the organisation comprising some 100 employees at the head office in Örebro, while total assets amount to slightly more than SEK 470 billion.
Three perspectives in sustainability work
The Group’s sustainability work is based on three perspectives:
- Sustainable financing, supporting municipalities’ and regions’ efforts in financial, environmental and social sustainability, as well as in fostering financial stability.
- Responsible operations, ensuring that the Group lives up to its Code of Conduct, stakeholder expectations and the laws, regulations and directives applicable to the operations.
- Sustainable organisation, safeguarding a good working environment and employee health, good management and employee collaboration, as well as an agile organisation.
Performance indicators related to sustainability are presented on pages 22–23 in the PDF.
The Global Goals
Municipalities’ and regions’ extensive efforts in sustainable development also entail Kommuninvest’s operations meeting, in many ways, the UN Sustainable Development Goals. A mapping conducted in 2019 shows that the Group has a direct or indirect impact on 15 of the 17 global goals and on about 50 of the 169 sub-goals.
Stakeholder priorities and satisfaction
The 2019 sustainability survey showed that Kommuninvest is perceived to perform well in the areas of sustainability that stakeholders consider most important. As with the preceding survey, conducted in 2016, stakeholders felt that Kommuninvest should primarily prioritise green financing and responsible, ethical conduct. On the whole, stakeholders’ perceptions of Kommuninvest’s performance had improved in all of the areas of sustainability studied.