The city of Sweden was fined for missing an environmental target

Gothenburg, the second city of Sweden, continues to put his money and even emphasizes environmental identity information.

In 2022, the city of Gothenburg was believed to be the first local government in the world “sustainability connected credit” or SLL.

This is a kind of financing for a number of annual environmental and social improvements agreed between a debtor and banks.

Gothenburg’s four targets are the only source of renewable energy of the city’s heat production, making the council’s own vehicle fleet electric, reducing energy use in municipal buildings such as hospitals and schools, and improveing ​​the poorest neighborhoods of the city.

To meet the annual improvement levels agreed in these sectors and Gothenburg for each one receives a discount on the annual fee paid for 0.1% or approximately 100,000 crowns ($ 10,500; $ 8,000). However, he misses one of the targets with a certain amount and has to pay the same amount of fine.

In 2022 and 2023, Gothenburg managed to avoid financial penalties, but the newly released figures for 2024 show that it has missed its goal of switching to renewable energy. And so it’s about to be fined 150,000 crowns.

However, this is balanced by discounts to continue to reach improvement levels for energy use and social improvement. While missing the improvement goal to electrify the council’s vehicles, he did not do it enough to be fined.

Fredrik Block, a portfolio manager in Gothenburg, says local authority intentionally set “ambitious” targets.

“You target high and make the entire organization strive for this goal. We do not move as fast as we expect, but we take a step every time. The goal is still to be close to carbon until 2030.

“Actually, we don’t do this for money. We do it to show the important work of the city and we make progress every year. We want to show the world how it is – these are problems and these are good things.”

Improvements in the poorest regions of the city – and whether the council has achieved its goals – is measured by annual established surveys. People are asked their feelings for the security and cleanliness of a region.

Key initiatives include housing, bringing more surveillance cameras and increasing the presence of police as a crime prevention measure in the areas of the city such as Hjallbo and Biskopsgarden. Located in the north of the city, they have a high level of crime and unemployment and large immigrant population.

Ultimately, the public housing agency, which belongs to the city of Gothenburg, says Framtiden, which is taking the improvement work very seriously.

“For some of these vulnerable areas, we actually have the majority of the housing,” Research and Development Manager Lars Bankval says.

“We are more or less officially in these regions. There is no one else there, only us.

“Perhaps I see us as the most powerful tool of the city, because we have too many financial sources. We are involved in everything.”

However, Faduma Awil, a social worker who now provides career coaching in an employment center in Gothenburg, is concerned that increasing cameras and police presence send the wrong message to young people in Gothenburg’s deprived regions and may see an increase in racial profile formation.

“What will our children think when they see cameras all over Hjallbo, but none in a Swedish neighborhood? How will they feel when they are constantly watched by the police?” says.

“What will you tell them? You show them that there is a difference between the indigenous Swedes.”

MS AWIL has not been convinced that established surveys were effective or accurate. And he thinks that the city has made an disproportionate effort to its environmental goals at the expense of improving conditions in insufficient areas.

Ms. Awil, who migrated from Somalia to Sweden in 1987, said, “People in these regions don’t care about the environment. They need to go to school. They need to work. They need to eat.”

It is a meticulous, complex process to negotiate a SLL – including six major Scandinavian Banks that buy Gothenburg a year.

This is the difficulty of acquiring a SLL in which the global number given in 2023 decreased by 56% globally. According to data Financial news from Bloomberg.

Mats Olausson is a senior sustainability consultant at Sweden Bank Seb, the leading lending of Gothenburg’s SLL.

Seb said that the customer has turned down potential SLL borrowers because the recommended targets are not ambitious enough. Nevertheless, he added that SLLs are difficult for companies or local authorities who have successfully acquired.

“It is sad for a company to put too much resources for designing a SLL, and then it turns out that the only presentation they receive is negative.” “You have a risk of withdrawal because it doesn’t do a good job.

He continued: “For companies that do not have the right management to have the actions that are extremely ambitious and impossible to obtain on a fundamental, or to implement the actions that will be the building blocks of the real strategy.”

A company who is satisfied with SLL is Danish Management Consultancy. In 2021, he borrowed £ 10 million, which helped buy six companies around the world.

The binding objectives are increasing the number of female leaders in the organization by 16% and the 6% reducing turnover of the total working turnover for a long time for seven years. He does this through leadership and mentoring programs.

Lars Bloch, the chief finance manager of the company, takes advantage of the interest rates of emagine by meeting the targets.

He continued: “If we did not reach the targets, we would go down with interest penalties. In addition, not meeting the sustainability targets, we can harm the reputation of the company because we are in public commitment.

“This should not be about committing the loan to obtain a discount on financing – it must be ambition behind the goals.”

In Gothenburg, the current environment and social goals of the city last until 2030. Mr. Block says annual SLL reporting shows what money to future potential investors in the city.

“Banks want to give money to sustainable cities, so packing our progress in our SLL report is how I make the city beautiful for investors,” he says.

“I can’t change the credit value of the city, but I can change how investors look at our sustainability work and make them more attractive for them.”