Much of the burden of the transition to a sustainable society will fall to municipalities and significant investments will be needed to ensure this transition. In this context, this report aims to provide the financial sector, and local and regional governments with a research-based understanding of the role of external financing in helping municipalities to reach sustainability, climate neutrality and the goals of Agenda 2030 from a Swedish perspective.
This report builds on academic research from the three-year project Accelerate sustainable financing: sustainable bonds for sustainable cities. Swedish municipalities are not on track to achieve the goals of Agenda 2030 or climate neutrality. In the absence of encompassing national guidelines, recommendations and coordination, Swedish municipalities all have different methods of and ambitions for approaching sustainability.
This study shows that common barriers to achieving sustainability goals are conflicting aims, low levels of internal collaboration, low levels of collaboration between municipalities, low levels of national coordination or support for sustainability and recurrent changes in political leadership. Generally speaking, neither municipalities nor investors perceive that Swedish municipalities are adversely affected by a lack of access to capital, although both actor groups foresee an increasing need for external financing of the sustainability transition and some believe municipal borrowing will increase. At the same time, investors are queuing up to invest in sustainable options and see Swedish municipalities as attractive investment opportunities.
This study identifies the most common barriers to the use of external capital to finance the sustainability transition in municipalities as
For the financial sector to play a more active role in supporting Swedish municipalities in the sustainability transition, a number of areas will need to be addressed. We suggest
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