This guide will navigate you through the process, ensuring you make informed decisions to maximize your staking rewards while maintaining security and control over your funds.

Staking with Ledger: secure your ADA

For ADA holders prioritizing security, the Ledger Hardware Wallet emerges as the recommended choice. Storing your ADA on a Ledger not only cardano wallet fortifies your assets against online threats but also simplifies the delegation process. To stake Cardano using a Ledger, follow these straightforward steps:

Ensure your ADA is on the Ledger Wallet:

This is the foundational step to secure staking, safeguarding your tokens in a hardware wallet renowned for its security prowess.

Stake through a compatible interface:

Access a staking platform that supports Ledger devices. The integration allows for seamless and secure transactions directly from your hardware wallet.

Delegate with ease:

From the platform’s interface, select the option to delegate your ADA. You’ll be guided through selecting validators and confirming your staking choices, all while your Cardano remains secure on your Ledger.

This method combines the best of both worlds—enhanced security and user-friendly staking operations. By choosing a Ledger Hardware Wallet for your ADA staking, you’re not just earning rewards; you’re also ensuring that your digital assets are protected with one of the most trusted security solutions available.

Stake Cardano on CryptoStake: simple and secure

CryptoStake has revolutionized the way ADA holders stake their tokens, offering a seamless and secure method through its mobile application. With the platform’s latest update, users can now stake Cardano or securely store it within the app’s advanced wallet, known for its robust security measures. Here’s how to start staking ADA on CryptoStake:

Download the app:

Available for iOS users on the Apple Store and for Android users via the official website. Samsung device owners can find it on the Samsung Store, ensuring wide accessibility.

Create an account:

Registration is straightforward, requiring no personal information. Simply record the provided 12-word seed phrase securely, set up a strong password, and you’re ready to go.

Begin staking:

Transfer ADA to your wallet, navigate to the staking section, select Cardano, and hit ‘Stake’. Input the amount you wish to stake, confirm, and expect rewards to start accumulating within 21 days at an approximate APY of 3%.

CryptoStake’s commitment to security is underscored by its resilience against rigorous testing by digital security experts like Hacken, making it a cryptostake review premier choice for ADA staking.

This process not only facilitates easy entry into the world of crypto earnings but also ensures your investment is protected every step of the way.

Maintaining your stake

Once you’ve delegated your ADA, it’s crucial to understand the maintenance involved to optimize your staking rewards. Here are essential tips for maintaining your Cardano stake:

Re-delegation:

You can shift your stake to another pool anytime, enhancing your control over investment decisions. The re-delegated ADA remains in the current pool until the epoch after next, considering each epoch spans approximately 5 days.

Rewards Accumulation:

Rewards earned are added to your original stake, increasing the delegated stake over time. This compounding effect enhances the potential returns from your staking activities.

Engagement in the Cardano Ecosystem:

Beyond earning rewards, staking ADA involves participating in the governance of the Cardano network. Token holders can vote on proposals, contributing to the blockchain’s development and upgrades.

Understanding these aspects ensures not only the growth of your staked assets but also deepens your involvement in the Cardano community, leveraging the full potential of ADA staking.

Choosing the right Cardano validators

Selecting the appropriate validators is pivotal for maximizing staking rewards and contributing to the network’s decentralization. Consider the following criteria when choosing a Cardano validator:

Commission Rates:

Evaluating the validator’s commission rate is essential as it affects your rewards. A balance between too high and too low is crucial for a validator’s sustainability and your profitability.

Minimum fixed fee:

All Cardano Stake Pools charge a minimum fixed fee of 340 ADA, which is distributed among delegators. Opting for a pool with a substantial stake minimizes your share of this fee, maximizing returns.

Validator performance:

A high uptime and a Luck rate of >=99% indicate a reliable validator, ensuring consistent rewards.

Self-staked balance:

Validators with a significant amount of self-staked ADA have more at stake, implying a commitment to reliable service.

Network share and centralization risks:

Avoid validators with excessively high or low network shares to prevent centralization risks and ensure the pool’s profitability.

Value addition:

Some validators offer additional services like tax reporting tools or explorers, indicating a long-term commitment to the ecosystem.

By carefully assessing these factors, you can make informed decisions that align with your staking goals, ensuring a rewarding Cardano staking experience.

Understanding ADA rewards and risks

Staking ADA is not only about participating in the network’s security but also about understanding the rewards and inherent risks. Here’s a breakdown of how Cardano staking rewards are generated and the risks involved:

Reward generation:

1. Block rewards: A fixed 0.22% of the reserve balance is allocated for block rewards and the treasury every epoch (~5 days), with 20% of token emissions going to the treasury. As the reserve decreases, so will the total block rewards.
2. Transaction fees: Fees from transactions in a block minted during an epoch contribute to the rewards, with 80% distributed to stake pools and 20% to the treasury. Initially, rewards stem from monetary expansion, but as reserves deplete, transaction fees will become the primary reward source.
3. Cardano staking APY: Stands at 3.03%, offering a competitive return for participants in the network.

Risks:

1. No slashing risk: ADA staking comes with the assurance of no slashing risk, meaning your stake is not at risk of being reduced as a penalty.
2. No unbonding risk: Withdraw your ADA anytime without unbonding risks, offering flexibility and liquidity.
3. Protocol security risks: Like any digital asset, there’s a risk of unknown bugs in the protocol. However, ADA’s rigorous security measures mitigate this risk significantly.

Understanding these elements ensures a balanced view of ADA staking, highlighting the potential for rewards while acknowledging the risks, thereby empowering investors to make informed decisions.

Tokenomics and consensus of Cardano

Cardano’s economic model and consensus mechanism are foundational to its functionality and appeal to investors. Here’s an overview:

Tokenomics:

1. Total supply: ADA’s capped total supply is 45 billion tokens, designed to decrease token emission over time, following a deflationary model.
2. Emission schedule: The token release rate is set at 0.22% of the remaining reserve per epoch (approximately every 5 days), ensuring a gradual distribution of ADA until the cap is reached.
3. Distribution: The initial distribution included 31,112,484,646 ADA, allocated among the Cardano Foundation, EMURGO, IOHK, and public sales, setting the stage for a broad and decentralized ownership.

Consensus mechanism:

1. Ouroboros protocol: A pioneering proof-of-stake algorithm, Ouroboros stands out for its efficiency and security. It selects slot leaders based on stake size, who are responsible for creating new blocks and validating transactions, encouraging ADA holders to participate actively in the network’s governance.
2. Stake pools: While there’s no limit to the number of stake pools, operators are incentivized to maintain a stable and secure infrastructure to support the network’s health and ensure reliable returns for delegators.

This economic and governance structure not only supports Cardano’s scalability and sustainability but also offers ADA holders a stake in the network’s future development, embodying a true community-driven blockchain ecosystem.

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• Environmental Challenges and DJI Drones:

Sweden, as it strives to reduce carbon emissions and use natural resources sustainably, faces a number of environmental challenges. One of them is monitoring changes in the natural environment. Originally designed to capture breathtaking aerial imagery, DJI drones are now being adopted into projects to monitor forests, waterways and biodiversity areas.

• Monitoring and Prevention of Forest Fires:

DJI drones are equipped with advanced surveillance systems, infrared cameras, and even artificial intelligence technology. These capabilities make them an invaluable tool for monitoring potential wildfires. By conducting aerial surveys of large areas, they make it possible to quickly identify threats and coordinate efforts to prevent fires.

• Monitoring of Water Pollution:

Drones are also used to monitor water resources. They are able to analyze water quality, identify sources of pollution and monitor changes in the ecosystem of water bodies. This is important for keeping Swedish waters clean, which in turn helps preserve biodiversity.

• Agriculture and Efficient Land Use:

In agriculture, DJI drones are used to optimize land management processes. They help farmers monitor the condition of crops, determine optimal planting areas and reduce the use of chemical fertilizers. This not only improves yields, but also reduces the negative impact on the environment.

• Attractiveness for Green Investors:

Green investors are actively interested in companies using DJI technology to solve environmental problems. Innovation in the field of green technologies not only improves the environmental efficiency of projects, but also creates economically attractive opportunities for investors.

Sustainable Future: DJI Drones and Green Investments in Sweden

In an era when environmental challenges require innovative solutions, Sweden stands out as a leader in green investment, embracing technology to create a sustainable balance between technological progress and natural resources. In this context, DJI drones have become a key tool, combining high-tech capabilities with solving environmental problems.

1. DJI Drones and Environmental Monitoring:

DJI drones have become a reliable assistant in solving environmental problems related to climate change. With their help, areas at risk due to climate change are monitored, which makes it possible to quickly respond to threats and minimize the consequences for nature.

2. Forestry Sector: Effective Monitoring and Fire Fighting:

Drones provide constant monitoring of forest areas, identifying signs of poaching and illegal logging. Moreover, they play a key role in preventing and extinguishing forest fires. Capable of quickly transmitting data, drones allow fire departments to respond to fires with maximum efficiency.

3. Agriculture and Sustainable Land Use:

In agriculture, DJI drones have become an indispensable tool for optimizing processes. They help farmers use resources more accurately, which reduces the negative impact on the environment. Using soil fertility and moisture data, farmers can make informed decisions to reduce the use of chemical fertilizers.

4. Water Resources: Control and Improvement of Water Quality:

Drones are actively used to monitor water quality in water basins. Equipped with special sensors, they detect pollution and monitor the condition of aquatic ecosystems. This helps in rapid response to threats to water resources and supports restoration programs.

5. Attracting Green Investors:

Green-minded investors are increasingly looking to projects using DJI drones as part of their green investments. The efficiency and versatility of these devices makes projects more attractive, giving investors the opportunity to contribute to environmentally sustainable initiatives.

The Meaning of Reliability: Why It’s Important to Keep Your DJI Drone Reliable for Green Investment in Sweden

In the context of green investments in Sweden, where DJI drones are becoming a key tool in solving environmental problems, the reliability of these devices becomes a fundamental aspect. The efficient operation of drones has a direct impact on the success of projects focused on sustainability and environmental stewardship. This is why the health of DJI drones plays an important role in the context of green investments:

1. Maximum Monitoring Efficiency:

Serviceable drones provide uninterrupted monitoring of environmentally important areas. This is critical for detecting changes in the natural environment and quickly responding to potential threats such as wildfires or water pollution.

2. Reducing Risks and Improving Safety:

Working with healthy drones reduces the risk of accidents and breakdowns during missions. This is especially important when drones are used in hard-to-reach areas or in environments where rapid response to environmental threats is critical.

3. Accuracy and Quality of Collected Data:

Well-functioning drones provide accurate data collection, which is important for conducting ecosystem analyzes and identifying patterns of change. High-quality data is essential for making informed conservation decisions and implementing green projects.

4. Optimization of Costs and Resources:

Reliable drones help optimize costs and resources as they minimize the need for repairs or replacement of equipment. This is important for projects focused on green investments, where efficiency in the use of funds plays a critical role.

5. Preserving Reputation and Attracting Investors:

The reliability of drones also affects the reputation of companies and organizations involved in green projects. Investors prefer to invest their funds in projects that use proven technologies, which in turn helps attract additional financial resources.

6. Improved Reproducibility of Results:

Well-functioning drones provide consistency in data collection over time, which is necessary to monitor changes in the natural environment and measure the effectiveness of measures taken. This supports the reproducibility of results and provides a reliable basis for assessing long-term environmental changes.

Cooperation with Good Zone Shop & Repair Service: Guarantee of Reliability and Successful Use of DJI Drones in Green Investments in Sweden

One of the key aspects of ensuring the reliability of DJI drones in the context of green investments in Sweden is quality maintenance and regular technical checks. Cooperation with Good Zone Shop & Repair Service becomes the key to the successful use of drones in environmental projects. This service not only provides highly qualified repairs and technical support, but also ensures that every drone used as part of green initiatives is in perfect condition. Good Zone not only ensures equipment is in good working order, but also maintains safety standards, which is integral to the successful implementation of environmental projects and the effective use of technology to achieve green goals in Sweden.

Conclusion:

The importance of keeping DJI drones operational in the context of green investment in Sweden cannot be underestimated. These innovative technologies not only provide unique capabilities for monitoring and protecting the environment, but also serve as a key tool in solving environmental problems. The reliability of DJI drones plays a critical role in ensuring the efficiency of green projects, optimizing the use of resources and attracting investment. With this in mind, the partnership with Good Zone Shop & Repair Service becomes an integral component, ensuring not only technical integrity, but also ensuring the safety and successful deployment of DJI drones in the name of sustainability and the responsible use of technology in Swedish green initiatives.

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One of the most important tasks for the modern world is the gradual abandonment of fossil energy sources: coal, oil, natural gas, etc. New energy supply technologies are being developed and implemented in various sectors of the economy.

Until recently, the main goal of the European Union was to achieve climate neutrality by 2050. EU countries that are still heavily dependent on Russian oil and gas are closely studying the experience of those who are acting ahead of this schedule. One of these countries is Sweden, where green innovations are already quite visible in many sectors of the economy. And in some of them, they are even key.

Water, wind, and solar energy

In 2021, the share of renewable energy sources in Sweden’s electricity generation structure reached almost 60%. Another 30% is provided by nuclear power plants. The path to this structure was very long. But in recent years, the role of nature’s energy has been growing at a fantastic pace. The last coal-fired power plant in Sweden was closed in 2020, 2 years earlier than planned.

The first attempts to “green” the Swedish energy sector date back to 1973. Back then, during the oil crisis caused by the embargo against the Arab states, the cost of “black gold” increased several times. Sweden was then heavily dependent on oil and oil products, so in response, the country adopted a program to develop nuclear energy. It was planned to build four nuclear power plants with 24 reactors. Over time, this project lost its relevance. Since 2020, only 6 reactors have been operating in the country. The main emphasis in the electricity sector is on small hydropower plants and biofuels.

Green metallurgy

Industry and metallurgy have been, are and will be a major consumer of electricity for a long time to come. But it is often fossil energy. In addition, metallurgy is a rather “dirty” process in terms of environmental impact.

Swedish steelmakers are focused on a rapid transformation of their production and are leading the way in implementing modern technologies. Steelmaker SSAB, iron ore supplier LKAB and energy company Vattenfall are jointly implementing the HYBRIT pilot project, which is expected to reach industrial production scale (about 1 million tons of reduced iron) in 2024-2025 and allow SSAB to smelt steel without using fossil fuels.

Mobility without emissions

We have already mentioned biofuels when talking about electricity in Sweden. But this also applies to cars, which are being actively converted to biodiesel. Its share in the country’s transportation sector is almost 20%, a significant increase over the past 15 years. But there is an electric revolution ahead.

Swedish transport manufacturers are not standing aside from this process. Moreover, they set the trends! This Scandinavian country is primarily known for the Volvo car brand. Since 1999, Volvo Cars (passenger cars) and Volvo Trucks (trucks and buses) have been legally separate companies. But they are both confidently moving towards the transition to electric traction.

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Most importantly, a standardized definition of “green” and systematization of environmental activities is needed to help investors and financial institutions allocate money efficiently and make informed judgments. To avoid green laundering, the concept of green finance needs to be made clearer.

A unified set of basic criteria for green finance is also needed to move capital flows towards environmental and sustainable initiatives, as well as to monitor and benchmark the market and risks. In addition, green financial assets can benefit from disclosure standards and regulations. Voluntary green finance concepts and standards, complemented by legislative incentives, should be applied and monitored across all asset classes.

Green finance versus sustainable finance

While sustainable finance refers to financial instruments that serve environmental and social goals, green finance is entirely related to environmental goals. According to Bloomberg, in 2018, sustainability and green finance accounted for one-third of all cash flows in tracked assets under management, totaling $30.7 trillion.

The vast majority of emissions emitted by investors are financed either through loans, investments and other financial activities. Financed emissions contribute 700 times more to the carbon footprint of financial institutions than operational emissions. Green finance for investments, loans and credit cards can help reduce emissions.

Green finance in the banking sector

Awareness of what green finance is has helped to increase its relevance in the banking sector. Both commercial and investment banks are beginning to take action in this regard. These actions include incorporating environmental factors into the bank’s strategy and management. It also includes mobilizing capital for specific green assets through lending, credit and savings facilities, and capital market activities such as green bonds. This development is being driven by a variety of efforts around the world, including the Principles for Responsible Banking and the Sustainable Banking Network.

Multilateral Development Banks (MDBs) also play an important role in mobilizing international climate finance and increasing financial leverage for low-carbon and climate-resilient projects. They are doing so by strengthening public and private investment planning, preparation, structure, financing, and risk mitigation. Many have boldly pledged to ensure that their loan portfolios support conservation efforts and that natural capital and social impacts are considered in investment decision-making processes.

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UN Environment is working with countries, financial regulators and the financial sector to align financial systems with the 2030 Agenda for Sustainable Development to direct financial flows to support the achievement of the Sustainable Development Goals. Financial markets are the backbone of today’s globalized economy, through which banks and investors allocate capital to various sectors. The capital allocated today will shape the ecosystems and production and consumption patterns of tomorrow.

The main areas of current work on green finance are:

• Supporting the public sector in creating an enabling environment
• Promoting public-private partnerships on financing mechanisms such as green bonds
• Developing the capacity of public enterprises for microcredit

UN Environment, through its Resource Efficiency Programme, will offer countries services to review their policy and regulatory environment for the finance system and develop sustainable finance plans, and will assist central banks and regulators on how best to improve the regulatory framework for domestic financial markets to pave the way and support multinational policy initiatives at the sub-regional, regional and global levels. UN Environment will build on ongoing initiatives such as private climate finance and work with policymakers and private sector leaders to connect to green economy initiatives. UN Environment will also catalyze policy actions that inspire and inform both public and private investors.

Partnerships

Multi-stakeholder partnerships will be fostered, including major financial market participants, banks, investors, microcredit institutions, insurance companies, and the public sector.

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Swedish forests have become the biggest investment attraction for investors who see other investment alternatives available to them continuing to weaken with the interest rate cuts implemented by the RiskBank (the Swedish Central Bank) in 2014.

Sweden, like Norway and the rest of the Nordic countries, has always been part of a select group of the world’s most developed countries. Its good economic management and natural wealth have always positioned the country at the top of the ranking.

Its large oil reserves and the vast forests it owns have become a source of wealth that, in the case of Sweden, has become part of the country’s investment assets, increasing their value by 7%.

Having money in the bank or in Swedish government debt has lost its attractiveness for Swedes, as the returns they receive are very low, and in some cases zero. For this reason, Swedish investors have started to invest their savings in forests, leaving aside traditional investment alternatives. Investments in forests, which some investors have already begun to call “Sweden’s green gold”.

Since the end of last year, when the price per square meter of forest was 398 kronor (41.7 euros), the price has risen by more than 7%, reaching 419 kronor per square meter (44 euros).

The main reasons for this price increase were undoubtedly the low interest rates offered by the Swedish country. In addition, the financial portal Bloomberg added that the large owners of these forests are usually investors who have very low debt ratios and take advantage of the opportunity to borrow from banks and continue to increase their holdings by buying more land.

Land of big investors

As we have already mentioned, Sweden is a country where large companies and large investors have been focusing on acquiring forests and forest land.

Companies that are involved in the stationery sector, such as Svenska Cellulosa, or groups such as Ikea and Sveaskog that sell furniture and wood, have become leaders in this market. Despite these large groups, Sweden also has small owners who own forest land, with about 330,000 small owners owning land in what could be one of Sweden’s new golden miles or rural Swedish Beverly Hills.

According to Marcus Helin, Director of Real Estate Market at LRF Konsult, he believes that the new “green gold” has a long way to go and that it is expected to attract many new investors from all over the world as well as Swedes They want to increase their forest areas and invest in their forests, taking advantage of the priority they rightfully have as national investors.

Despite this, many pages specializing in buying and selling this type of land in Sweden emphasize that buying forest land in the Nordic country is not a difficult task. In addition, the low supply of properties located near Swedish metropolitan areas and the high price of them have made those interested in obtaining land in this country choose to look for them in rural areas where there are many forests.

Some may think that Sweden is wasting a unique investment opportunity that they could have used for themselves and exporting it to potential foreign buyers who could harm the ecosystem of the beautiful Nordic country.

To do this, Sweden is responsible for classifying forest land into plots that qualify the land according to its quality and fertility.

Forest plots that are up for sale and sold are usually plots where certain tree species have been planted to benefit from the timber of those same trees. In other words, few, or in some cases none, of these forests are usually primary forests.

This means that the country can attract foreign investors, thereby increasing FDI (foreign direct investment), but at the same time, preserve its core primary forests and its forest ecosystem. A great solution for Sweden, which could become the new rural Dubai.

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Sweden and the United States are already close partners in the development of innovation and new technologies, thanks to numerous collaborations between academia, industry and startup ecosystems. The Green Transition Initiative will build on these partnerships and develop them further.

By increasing access, improving visibility, and fostering co-creation, the Green Transition Initiative will also support Swedish companies in expanding their business and presence in the United States. As Swedish and U.S. companies increase their collaboration to drive sustainable change, together we will pioneer what is possible.

Realizing the green potential

The United States has set ambitious national targets to help meet global climate goals. Several states are taking the lead in transforming sectors such as transportation, power generation, and industry, which together account for nearly 80% of total greenhouse gas emissions. Significant investments are being made in these sectors, and as other states follow suit and the Biden administration’s climate ambitions grow, demand for innovative green technologies is increasing.

A large number of Swedish companies, both multinationals and new start-ups, are at the forefront of innovative environmental solutions and are global leaders in sectors such as electric mobility, renewable energy, sustainable industry and green buildings. With ambitions to become the world’s first fossil fuel-free welfare state, Sweden is well positioned to partner with the United States in its transition to a greener future.

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EKN’s Green Export Credit Guarantee allows exporters and banks to insure up to 100 percent of the transaction value to protect themselves against the risk of non-payment. Standard EKN export credit guarantees typically provide risk coverage of up to 95 percent.

“In order to benefit from a green export credit guarantee, the export transaction must relate to environmentally friendly products or products whose end use is part of an environmental activity,” says Victor Carstenius, Senior Analyst at EKN, adding: “EKN follows the EU taxonomic classification of environmental activities that contribute to climate change mitigation and adaptation to determine whether an export transaction can be covered by the new guarantee.”

The export-oriented guarantee complements EKN’s green loan guarantee for environmental investments and working capital needs in Sweden. This guarantee covers loans of up to SEK 500 million for environmental investments and working capital needs within Sweden only and covers the bank’s risk up to 80 percent (up from the previous 50 percent). The two types of guarantee have the same green incentive (higher coverage ratio) and the same environmental definition (EU taxonomy).

To cover more than SEK 500 million worth of green investments in Sweden, the government has given Riksgälden the mandate to provide state loan guarantees for new loans taken out by companies from lending institutions to finance large green industrial investments. The loan guarantees can be issued in SEK, EUR or USD. Riksgälden uses the EU taxonomy as a tool for determining sustainability.

EKN and Riksgälden provide the net coverage, and SEK can provide refinancing through environmental, social and sustainable linked loans. SEK provides green loans to companies and projects that contribute to the transition to a low-carbon economy and contribute to the UN Sustainable Development Goals. “SEK is active in the green bond market and issues green bonds for financing, which is used to finance the green loan portfolio,” says Helena Engner Eilley, Senior Sustainability Analyst, concluding that Swedish industry and exports are well positioned to meet the needs for investment in transition technologies: “The financial strength of SEK, EKN and Riksgälden, as well as clean technologies from leading global suppliers, form an unbeatable combination.”

From start-ups to established multinationals, Swedish exporters are prominent in clean technology with innovations that help ease the transition to a carbon-free society. Electric mining equipment, non-fossil fertilizers and biofuels are just a few examples.

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The GBPs are voluntary processes that outline best practices when issuing bonds for social and/or environmental purposes through global guidelines and recommendations that promote transparency and disclosure, thereby supporting market integrity. The GBP emphasizes the necessary transparency, accuracy and integrity of information to be disclosed and communicated by issuers to stakeholders through the core components and key recommendations. Four main components to be aligned with the GBP:

• use of proceeds – how the proceeds of the issue are used should be documented in the legal documents of the bond;
• project evaluation and selection process – the issuer must describe the decision-making process to assess whether a project can use green bond capital;
• management of proceeds – the issued proceeds should be placed in a separate account or managed in such a way that it is clear that the money from the bonds is going to the specified projects; and
• reporting – the issuer must provide investors with a list of projects financed by the bond at least once a year.

The GBP recommends using an external party to confirm that the bond meets the four principles. They also call for an independent audit, primarily of how the issuer monitors payment processing and tracking. However, the GBPs are voluntary guidelines that recommend transparency and disclosure and promote honesty in the development of green bonds. Most importantly, they are not regulations.

The GBPs have been used to form the Swedish sovereign green bond system, which contains the four aforementioned main GBP components. The aim of the Swedish sovereign green bonds is to finance a spending portfolio that meets the highest environmental ambitions and is in line with the goal of carbon neutrality by 2045.

Even if sterling constitutes the market standard, Swedish parties are free to choose contractual obligations in civil and commercial matters and thus the provisions relating to green bonds. Issuers typically refer to their own “green bond framework” as set out in their Medium Term Note (MTN) program, with a caveat in the bond terms that their green bond framework may be updated from time to time to reflect, among other things, the EU taxonomy regulation, the EU green bond standard, sterling and best practices in the market.

It should be noted that the EU Taxonomy Regulation does not apply directly to bond issuers; however, it does have an indirect impact on issuers, as the regulation imposes requirements that covered participants, for example, be able to indicate how their portfolios are compliant with the EU Taxonomy Regulation.

Today, the GBP and other existing forms of self-regulation pose various challenges, especially for investors. The main challenge from an ESG perspective is greenwashing. If companies participate in green bonds and issue green bonds whose proceeds are used for projects that are not really green, this can damage the credibility of both the individual company and the green bond market. In addition, there is a risk that the issuer’s own framework does not meet all the requirements, wishes or specific investment mandates of investors. Given that the issuer reserves the right to change the green terms and conditions, and that market practices may evolve after the date of issuance for a particular MTN, there is a risk that such MTN will not meet future regulations, principles or standards.

On June 18, 2019, the European Commission’s Technical Expert Group (TEG) on Sustainable Finance published the group’s final report on the EU Green Bond Standard. The report proposes that the European Commission introduce a voluntary EU standard for green bonds. The main goal of the proposal, which is currently being discussed by the European Parliament, is to create a new “gold standard” for green bonds that will raise the level of environmental ambition. The Swedish government has clearly welcomed the proposal for a voluntary EU standard, and once the EU standard is adopted in Sweden, the regulation will set a new standard for how companies and public authorities can use green bonds in Sweden to raise funds on the capital markets to finance such ambitious large-scale investments.

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“Sustainable finance” refers to the process of incorporating environmental, social and governance (ESG) considerations into investment decisions in the financial sector. To facilitate ESG investments, the implementation of new sustainable investment rules has been increased, introduced through amendments to existing legislation and through entirely new rules and guidelines. Most of the regulations have already entered into force. Despite the recent development and strengthening of regulation within sustainable finance, there is no regulation of green bonds in Sweden yet.

The Swedish green bond market emerged as a result of demand from Swedish institutional investors, who entered into a dialogue with the Swedish bank, resulting in the World Bank issuing the first green bonds for institutional investors in 2008. The international green bond market has grown dramatically in recent years, but still represents a small part of the overall bond market. Sweden is far ahead in the development of green bonds, and in 2019, green bonds accounted for 20% of the country’s total bonds. This is a very large share compared to other currencies such as the euro, pound sterling, yuan, Australian dollar, Norwegian krone, and US dollar, for which green bonds accounted for between 0.8 and 5% of bonds issued. However, this form of financing is becoming increasingly common around the world, and its use is expected to grow. “Green bonds allow raising capital and investing in new and existing projects with environmental benefits. Green bonds are an important part of sustainable finance and thus play a crucial role in the fight against the climate crisis.

What is a green bond?

Market participants should be aware that there is currently no clear definition of what a green bond is. However, the general perception is that green bonds are any type of bond instrument whose proceeds or equivalent amount will be used exclusively to finance or refinance, in part or in full, new and/or existing eligible green projects.

It should be noted that green bonds can be distinguished from climate bonds, which focus on projects that address climate issues, such as renewable energy or climate-smart infrastructure. The concept of green bonds is broader; bonds can also finance environmental projects that are not directly related to climate. Thus, climate bonds are a kind of green bonds. The concept of “climate bonds” is more common internationally, while in Sweden the term “green bonds” is more commonly used, even for purely climate bonds.

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