To date, the Nordic green bond market has been dominated by issuers in the real estate sector, a key target of the taxonomy because of its high emission levels.

Inconsistent sustainability requirements across the EU could skew environmentally sound investments, NCR said in a new report.

"Thresholds for energy performance certificates are different across the EU and the current technical screening criteria for the taxonomy are both too stringent and not objective enough. If this results in market distortion, it is highly likely that the Nordic green bond market will continue to grow outside the taxonomy and the EU Green Bond Standard," said NCR analyst Mille O. Fjeldstad.

"We do not assess whether or not an issuer is sustainable but rather how environmental factors impact credit drivers, such as access to funding, competitive position, industry risk, and operational efficiency," Fjeldstad said. 

If you have any questions, please contact:
Mille O. Fjeldstad, credit rating analyst, +4799038916, mille.fjeldstad@nordiccreditrating.com
Marcus Gustavsson, credit rating analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com