Oslo exchange becomes first to launch separate list for green bonds

Norwegian bourse says issues will need third-party accreditation

Norway’s Oslo Børs stock exchange has become the world’s first to launch a separate list for green bonds – and says it will require issues to have third-party accreditation.

The exchange – 10% owned by the mutually owned KLP which recently announced a major coal divestment – reckons that a number of bonds currently listed “meet the requirements necessary to feature on the new list” – with more expected very soon.

One example is Bergen-based hydroelectric energy firm BKK (Bergenshalvøens Kommunale Kraftselskap), which is 49.9% owned by Statkraft, the state owned electricity company. BKK listed its first (NOK1.1bn) green bond on the exchange on October 13, saying the market response was “very positive” – and attractive for investors “due to the bonds qualifying as green investments”.

“We are doing this to draw attention to environmentally friendly investments,” said exchange President and CEO Bente Landsnes. She went on: “Green finance is a preferred option for many investors. An increasing number of them want to invest in green projects. We want this new list to draw attention to green investment choices.”
The exchange says proceeds from the bonds must be used for environmentally friendly purposes, and a “second opinion” from certification bodies such as CICERO (Centre for International Climate and Research – Oslo) or DNV GL has to be sought.“We require the second opinion to be made public to enable investors to understand the environmental aspects of the project,” said Senior Listing Manager Per Gunnar Ølstad.

“Green finance is a preferred option for many investors”

There will be two lists, one for bonds and certificates listed on the main Oslo Børs and a second for listings on loan listing platform Nordic ABM. They will go live on January 29.

It comes as the exchange says the Norwegian fixed income market is growing strongly. So far this year, the volume of new issues, excluding issues by the Norwegian government, has reached NOK 296.8bn – up from last year’s NOK279.6bn.

More widely, the green bond market has grown to an estimated $34.56bn, according to industry group the Climate Bonds Initiative, with the latest issue being a A$150m bond from National Australia Bank. But sceptics are emerging, in the shape of PensionDanmark Director Jens-Christian Stougaard, who has been quoted saying they are “very much a marketing thing”.

The Oslo exchange is 19.82% owned by DNB Livsforsikring as its largest shareholder and Kommunal Landspensjonskasse (KLP) is second largest holder.