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Kristina Forsbacka
Kristina Forsbacka, PhD student at Luleå University of Technology. View original picture , opens in new tab/window

Green and climate bonds have potential to become more efficient

Published: 29 June 2018

There has been an immense growth in the green bond market and the investor demand for green projects keeps growing. However, a Nordic legal framework for green bonds is missing. This is something that will be adressed in a new research project at Luleå University of Technology.

The research project "Climate finance and sustainable finance. A legal analysis of contractual terms and conditions for climate bonds and green bonds; focus on the financial markets in the Nordics" will run over two years. 

– According to the EU Commission around 180 billion Euro a year of additional investments in energy efficiency and renewable energy is needed to achieve EU's 2030 climate targets. Mobilisation of private capital to fund sustainable investment is essential, says Kristina Forsbacka, PhD student in law at Luleå University of Technology and lawyer with many years of practical experience in international climate finance.

The project is financed by Nasdaq Nordic Foundation, the Nordic Investment Bank and Folksamgruppen.

Investigating the frameworks

Frameworks for green bonds and climate bonds have been developed by market actors and the Nordic countries have been in the forefront. The EU Commission recently presented a legislative proposal for a EU classification system for sustainable activities (a taxonomy) and a proposal to harmonise regulations regarding enhanced investors' duties for institutional investors and asset managers. However, it is still unclear what the legal requirements are for a green bond. The market is therefore potentially not as efficient as it could be. The frameworks could to be clearer, to ensure that the environmental impact that green bonds promise to deliver also is delivered.

–  I will investigate and analyse  green bond frameworks  with focus on climate bonds. In addition, I will analyse how EU regulations and other recommendations can be implemented, and if coordination and standardization is possible, says Kristina Forsbacka.

– According to the Paris Agreement capital flows shall be made consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. If the high climate ambitions are to be achieved capital flows will need to be directed towards the sustainable activites. This is why this research is important, Kristina Forsbacka finishes.

The research is carried out in cooperation with Stockholm Sustainable Finance Centre, a collaboration between the Stockholm Environment Institute (SEI) and the Stockholm School of Economics (SSE). A reference group with representatives from the financiers, Nasdaq Nordic Foundation, the Nordic Investment Bank, Folksamgruppen and also institutional investors AP2, AP4, AP7 and Alecta have been tied to the project.

Supervisors are Malou Larsson Klevhill at Luleå University of Technology, who was principal secretary in the Swedish Government's Green Bonds Official Report (SOU 2017:115), and Stefan Lindskog, President of the Supreme Court.


Kristina Forsbacka

Kristina Forsbacka, PhD Student

Organisation: Law, Social Sciences, Department of Social Sciences, Technology and Arts