The City of Helsingborg updates sustainable bonds framework to address youth unemployment

Helsingborg was the first municipality in Sweden to launch a framework for sustainability bonds in 2023, that includes both environmental and social categories. Now, the social sustainability aspect is also being added to the city's sustainability-linked bond program. The framework update has been carried out together with Danske Bank.

The framework enables the issuance of bonds with terms linked to specific goals. On the one hand, a link is made to the goals of emission reduction and climate neutrality by 2030, which are described in the city's new climate and energy plan. On the other hand, the interest terms are also linked to the cross-administrative goal of reducing the proportion of young people who are neither working nor studying by 20 percentage points, in relation to the national average, by 2035.

"Completing your education and starting work as a young person is one of the most important steps on the path to an independent life. Most young people manage this transition well, but many will at some point be in a situation where they are neither studying nor working. For more young people in Helsingborg to have a path into working life and studies, new working methods, long-term efforts and close cooperation between different actors are required. Together, we can create better future opportunities for the city's young people, where preventive measures will be a central part of the strategy to prevent more young people from ending up in exclusion", says Henriikka Airaskorpi, acting labour market director, City of Helsingborg.

A few years ago, the discussion about environmental sustainability was more clearly separated from that about social sustainability. Today we know that the environment and public health are closely linked, and that social and environmental sustainability is a prerequisite for a long-term sustainable economy. To create a more equal Helsingborg, the city needs to focus on increased employment, security, integration, equality and improved living conditions for children and young people. Therefore, the aspect of social sustainability in the framework is linked to the proportion of young people who are not in education, employment, or training (NEET) in Helsingborg. The first bond that is issued under the updated framework is for SEK 400 million. It is specifically linked to the goal of reducing the share of NEET. Skandia and Swedbank Robur are the investors.

“By investing in this sustainability-linked bond, we actively contribute to creating better future opportunities for young people and promote strategies that counteract exclusion and support their path into working life and studies, says Mikael Elmqvist, Portfolio Manager Swedbank Robur.”

“By issuing a socially sustainability-linked bond with a special focus on reducing youth unemployment, Helsingborg is taking another step towards creating more opportunities for young people. The financing contributes to combining social efforts with community benefit and gives young residents better opportunities to enter the labour market, while at the same time Skandia's pension capital is safely invested at a market rate of return. This is an investment that benefits both the individual and the city's future, says Alexander Onica, Head of Fixed Income and FX at Skandia.”

The NEET objective is based on the ambition to increase young people's participation in society and working life. In concrete terms, this means focusing on preventive measures but also outreach efforts, which requires the involvement of several actors in society.

“In order to get all young people into further studies and employment, it is important that we catch them at an early stage and offer concrete alternatives for those in need. Through active and targeted cooperation, we create better opportunities for young people to find their way in society”, says Tony Mufic, director of education, City of Helsingborg.

S&P Global Ratings has carried out an independent review of the framework, a so-called Second Party Opinion. Their opinion confirms that the framework is in line with the International Capital Market Association's (ICMA) Sustainability-Linked Bond Principles, which ensures that the framework follows market practice. In addition, S&P Global Ratings assesses that the ambition, clarity and characteristics of the objective are "advanced", which represents their highest scoring.

“The City of Helsingborg was the first municipality in the world to list a sustainability-linked bond. Back in 2021, the city established a framework for sustainability-linked bonds where the interest terms were linked to emission reductions. Now the framework's goals are being updated and we are the first in the country to make a connection to social KPIs, says Marcus Nilsson, finance director of the City of Helsingborg. Through our work, we hope to be able to increase focus on the importance of social sustainability within the City of Helsingborg but also the opportunity to inspire other municipalities to add the social sustainability aspect to their bond programs”.

For questions, please contact

Niklas Bäckström, Financial Controller, City of Helsingborg
Phone: 072-379 39 36
E-mail: niklas.backstrom@helsingborg.se

Press Service, City of Helsingborg
Phone: 042 10 55 55
E-mail: press@helsingborg.se