Fastighets AB Balder

‘Second Opinion’ on Balder ’s Green Financing Framework 1 Fastighets AB Balder Green Financing Second Opinion 29 th Ju ne 2023 Executive Summary Fastighets AB Balder (henceforth “Balder”) is a Swedish property company established in 2005 and listed on Nasdaq Stockholm, Large Cap. Balder acquires, develops and manages residential and commercial proper ties in larger cities and cities with growth potential in Sweden, Denmark, Finland, Norway, Germany and Great Britain. The property portfolio consists of 51% residential properties, 16% offices, 9% retail, 6% industrial/logistics and 11% other properties. Investments are being made with an emphasis on Stockholm, Gothenburg, Helsinki, and Copenhagen. Balder’s real estate portfolio had a value of SEK 217.4 billion as of 31 December 2022. Balder’s current framework is an update from a 2019 framework, and is f ocused on green building s – new construction, refurbishment and aqu i sitions. The eligibility criteria ha ve been updated to harmonise with the climate mitigation criteria in the EU Taxonomy. The previous framework had energy efficiency and renewable energy as eligible categories . They are no longer included. Balder states that they currently do not have plans for significant investments in Germany and Great Britian , removing a concern for financing of fossil fuel heated buildings in these countries. W e rate the framework CICERO Medium Green and give it a governance score of Good. The combination of energy and certification criteria is useful for greening the real e state sector . The criteri a for new buildings, that their primary energy demand is or will be at least 20% lower than the threshold set for near zero - energy buildings (NZEB), and that they have, or will receive , useful environmental certifications, is a reasonable step towards low c arbon and energy efficient new buildings. We note, however, that the criteria are not among the strictest. Balder has quantified emission targets for 2030 and 2045 and is seeking assurance from Science Based Target Initiative that these targets are aligned with the Paris agreement. Balder reports on climate risks according to the TCFD guidelines. S trengths Balder has demonstrated commitments to reviewing and revising sustainability policies, objectives, and goals. Lately, Balder has updated its climate goal s and signed the Science Based Targets Initiative in order to have the goals approved by the initiative. Thus, Balder shall halve emissions in its own operations by 2030, with 2022 as the base year, as well as measure and reduce emissions in the value chai n (Scope 3 including embodied emissions ). The company has also set a goal to achieve net zero emissions throughout the value chain (Scope 1, 2 and 3) by 2045. The emphasis on energy efficiency in new and existing buildings is a strength of the framework. SHADES OF GREEN GOVERNANCE ASSESSMENT GREEN BOND AND LOAN PRINCIPLES Based on this review, this f ramework is found to be aligned with the principles.