Sustainability in budgetary borrowing builds on government commitment.
Many institutional investors globally are committed to sustainability targets or principles such as the UN Principles of Responsible Investment (PRI). Even sovereign bond investors are increasingly incorporating ESG (environmental, social, and governance) considerations into their investment risk analysis and decision-making. Expanding regulation is pushing the financial markets to focus more and more on sustainability.
The Government of Finland is committed to national and EU-level sustainability targets. The best additional value we can provide to investors is to gather relevant, forward-looking information about the Government’s sustainability targets as well as pointing to the key policy measures set for achieving them. So not just aims but means, too. The focus in our funding, however, is on maintaining liquidity. Being a relatively small issuer, safeguarding the liquidity of the benchmark bond curve is essential. That is why the current funding strategy does not include the issuance of thematic or green bonds.
We want to help RFGB bond investors make informed and independent investment decisions, integrating ESG factors in their investment decision making process. There are several indices, indicators, rating reports and analyses on sustainability in Finland available to investors. In the new ESG section on our website, we have collected external links and data to one, easily accessible place.
We want to help RFGB bond investors to make informed and independent investment decisions, integrating ESG factors in their investment decision making process.
One highlight of the year is the fact that Finland ranked first in the Sustainable Development Report 2021 by the UN and the Bertelsmann Foundation. In monitoring the progress in Finland’s target of becoming climate-neutral by 2035, a key report on a national level is the Annual Climate Report that the Government will submit to Parliament each year. The report sums up information on the trends in emissions in Finland, implementation of climate policy and achievement of emission reduction targets.
By tackling climate risks, enhancing social cohesion, and supporting good governance, a state can support better economic performance in the long run.
We have also gathered many international comparisons and rankings to complete the picture of the relevant environmental, social and governance factors that describe the Finnish society. Most of them are not new to sovereign bond investors. Governance factors in particular have traditionally been of interest to many RFGB investors. Finland is in the top range of countries by many measures: the rule of law, stable institutions, global competitiveness, and social equality.
Sustainability themes are topical, but they are also by nature tightly incorporated into the overall economic performance of the country. By tackling climate risks, enhancing social cohesion, and supporting good governance, a state can support better economic performance in the long run.