Green Voices of Nasdaq: How Trianon Is Building Social Sustainability in Malmö

The Nasdaq’s Nordic & Baltic Sustainable Bond Market is flourishing due to our continued commitment to the environment, society and a more responsible future. With over 250 green social and sustainability bonds listed, it is a testament to the extensive integration of sustainable practices amongst Nordic & Baltic companies.

Nasdaq’s sustainable bond markets enforce transparency in alignment with internationally accepted standards that makes it easier for investors to invest and manage risk, which goes hand in hand with our overall mission to provide fair, transparent and efficient markets.

In this series, called Green Voices of Nasdaq, we are providing a platform that allows our sustainable bond issuers and investors to share their stories. This story shines a light on how Trianon is funding sustainable housing projects through its first hybrid bond.

Driven by the desire to find solutions to societal challenges, Swedish real estate company Trianon issued the first sustainable hybrid bond in the Nordic market to fund sustainable housing projects that address social and environmental issues.

Trianon issued 400m SEK in perpetual hybrid notes in the spring of 2019, with the net proceeds to be used according to the company’s Sustainability Bond Framework. The bond, which is listed on the Nasdaq Sustainable Bond Market, attracted strong investor demand.

“The demand was big, and the bond was oversubscribed, which was a clear sign that many investors showed us their confidence in the market and Trianon’s compelling growth story, that is, sustainable housing offering employment as well as housing in green buildings” said Mari-Louise Hedbys, Vice President and CFO at Trianon.  

Building Sustainability

As a firm that owns, manages, develops and builds housing and commercial properties in the coastal city Malmö, Trianon believes that social, economic and environmental sustainability is not only critical to success but also part of its core responsibility as a property owner and landlord. The firm actively works with the United Nations Sustainable Developments Goals (SDGs), incorporating several goals into its investment and operating strategies, including:

• Affordable and Clean Energy
• Decent Work and Economic Growth
• Reduced Inequalities
• Sustainable Cities and Communities
• Climate Action

Since 2011, Trianon has worked to implement social and sustainability measures at some of its various properties. The firm noted that the measures put in place at the Vårsången housing complex have resulted in a positive trend.

“Several of the residents have been employed, the properties today are more environmentally sustainable, and the relocation frequency has decreased from 20% to 7%. An increased employment rate and the participation in environmental issues is key to the positive development for both individuals and families, but also for the entire area attractiveness. More employed residents effect the over all housing stability especially in terms of school results, reduced damage, safer areas and an increased property value,” Trianon said in its 2019 Sustainability Bond Framework.

Now, with funding generated from its sustainable hybrid bond, Trianon is bringing those sustainability initiatives to other buildings and locations in Malmö, including Hermodsdal, Lindängen and Nydala.

Hybrid Bond

Trianon is tackling sustainable housing by funding two kinds of projects: social and green.

“Our social-eligible projects include capital and operational expenditures with an overall objective of increasing well-being in socio-economically weak areas,” said Hedbys. “That includes affordable housing and employment generation, both permanent and temporary work placement of the local residents by Trianon or its partners.”

“Our green-eligible projects include capital expenditures for climate-related activities with the objective of reducing the overall climate footprint of Trianon and its residents, such as improving energy efficiencies and investments in renewable energy,” continued Hedbys.

The proceeds from the hybrid bond will be used in accordance with the Trianon’s sustainable framework, with a focus on social sustainability.So far, funds from the bond have been used for the partial financing of the acquisition of 781 apartments with an underlying property value of SEK 900 million, located at Hermodsdal and Almhög in Malmö.

While investors recognized the value of funding these social and green projects, Trianon understands the challenges ahead.

“Compared to environmental goals, it is more difficult to set boundaries on the social goals because they will be affected by the economic cycles,” said Hedbys.

Beyond setting the parameters for investors, the Swedish real estate company also acknowledges the moves it needs to make in order for their projects to make a strong impact.

“We will need to focus more on leasing and security-creating measures in, for example, Lindangen and Hermodsdal, which means that we are reorganizing to be able to staff a certain hub (in Swedish BoHubb) for increased service, employment services and hiring,” said Hedbys.

As Trianon moves forward to address the socio-economic concerns of Malmö, it encourages other firms to embrace green initiatives.

“Be brave and pave the way for new solutions! Set ambitious goals, but be realistic at the same time,” Hedbys concluded.

Nasdaq’s Role in Sustainability

Nasdaq recently launched the Nasdaq Sustainable Bond Network (NSBN), a global platform that aims to increase transparency and accessibility to environmental, social and sustainability bonds. NSBN displays all documents, data and qualitative information submitted by issuers on an open-to-all website and disseminates the same information in a machine-readable format through proprietary market data feeds.

NSBN builds upon the Nasdaq Sustainable Bond Market, which was launched in July of 2015 with a total volume of 740 million euros.  In 2017, €1.7bn ($1.9bn) was raised on the Nasdaq Nordic Sustainable Bond Market, up 81% from 2016. In November of 2019, Nasdaq’s Nordic and Baltic sustainable debt segments list a total volume of about 13 billion euros. We facilitate infrastructure, monitor issuers and foster dialogue to ensure the continued growth of the markets. 

Bonds can be listed on Nasdaq Sustainable Bond Market if a set of criteria is fulfilled. The respective criteria are based on the green and social bond principles (the GBP and SBP), for which ICMA acts as secretariat, and has been developed in cooperation with Sustainalytics, a global leader in environmental, social and corporate governance (ESG) research. Issuers that wish to list green, social or sustainable bonds on our sustainable bond market go through the same process as traditional bond issuers. However, the issuer must supply Nasdaq with information regarding the bond or bond framework as well as the third party’s review when applying to list.  

To learn more about the listing process, visit our website.

Read related stories:

• Green Voices of Nasdaq Nordic: A Forest of Opportunities
• Green Voices of Nasdaq Nordic: Growing Green Bonds
• Green Voices of Nasdaq Nordic: Branching Out in the Green Bonds Market
• Green Voices of Nasdaq Nordic: Local Government Plays a Key Role in Blossoming Green Bonds Market
• Green Voices of Nasdaq Nordic: Green Products Are the Core of the Transition to a Sustainable Society
• Green Voices of Nasdaq Nordic: How the Church of Sweden Integrates Sustainability into its Investments
• Green Voices of Nasdaq: Nordic Investment Bank Dives into Blue Bonds to Protect the Baltic Sea
• Green Voices of Nasdaq: Advanced SolTech Sweden AB Issues Green Bonds to Help Reduce Carbon Emissions in China

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