Green Financing

Sustainability is a key cornerstone for Citycon to create long-term value for its investors and to the communities in which it operates. As a result, in 2019 Citycon launched a Green Financing Framework which integrates the company’s sustainability targets with its financing activities. Under the Green Financing Framework, Citycon can issue Green Bonds, Green Commercial Papers, Green Loans, Green Hybrid Bonds or Green Private Placements. 

In 2020, the company further increased the link between financing and its sustainability targets by signing a Sustainability-linked Revolving Credit Facility. In November 2020 Citycon refinanced its EUR 500 million Sustainability-linked Revolving Credit Facility, linking the margin on the credit facility to achieving three of Citycon’s main environmental targets: 
 
  • Decreasing the Greenhouse Gas Intensity of the portfolio in line with the target of being carbon neutral by 2030, 
  • Decreasing energy consumption per square meter in line with achieving a 10% reduction by 2025 and 
  • Certifying the whole property portfolio according to LEED or BREEAM by year-end 2022.

If Citycon meets all of the sustainability targets, measured annually in progress towards the set targets, there is a sustainability discount applied to the interest margin on the facility. On the contrary, if Citycon were to fail on all targets, the company would be obliged to pay a premium on the facility margin. The sustainability-linked margin thus further incentivizes the company to achieving its long-term sustainability targets. 

Citycon’s  Green Financing Framework is based on Citycon’s sustainability strategy that spans until 2030 with an aim of becoming carbon neutral by 2030. The framework reflects practices that support the transition to a sustainable and low carbon economy through the development of green assets. Proceeds issued under the framework can be used to finance or re-finance eligible green assets in categories green buildings, energy efficiency, renewable energy or waste management. As at December 31st , 2020, approximately EUR 3.0 billion of Citycon’s property portfolio was eligible for green (re)financing. The annual Allocation of Proceeds and Impact Report 2020, along with a verification report from an external part is available below.
 

 

In addition to the annual report, Citycon publishes a quarterly update on the total amount of green assets in each category along with the total amount of outstanding green financial instruments. Quarterly updated figures can be found in the table below.

Approved Eligible Assets Amount Green Financing (KEUR) Q1/2020 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 Q3/2021
New Construction, investments made 143 223 157 017 181 978 219 648  241 951 287 124 312 102
Existing Buildings 2 447 628 2 690 780 2 667 066 2 731 859 2 940 964 2 936 334 2 939 503
- of which previously New Construction or Major Renovation - - - - - - -
Energy efficiency, Energy retrofits 4 000 4 279 8 015 9 492 9 927 10 012 10 087
Energy efficiency, Activities enabling clean transport 112 112 112 112 112 112 112
Renewable Energy 1 184 1 249 1 228 1 302 1 364 1 340 1 341
Total approved Eligible Green Assets 2 596 147 2 853 437 2 858 399 2 962 414 3 194 318 3 234 923 3 263 145
Outstanding green financing, nominal amount 350 000 350 000 350 000 426 407 780 036 1 128 650 1 128 701
Remaining approved Eligible Green Assets 2 246 147 2 503 437 2 508 399 2 536 007 2 414 282 2 106 273 2 134 444