More social issues in corporate responsibility

International meeting point in the Spanish city of Zaragoza on the theme of clean water and sustainable development.

During the year, we adopted a new policy which summarises the ethical considerations we make when issuing guarantees. One new development is that more social issues are now included.

EKN wants to contribute to corporate responsibility. The ethical considerations we incorporate into our guarantee operations include the environment, social issues, elimination of bribery and corruption and promotion of sustainable lending to poor countries. Our new policy includes these ethical considerations, which previously had separate policies.

The new policy includes more social issues than before. When issuing guarantees, we now also take into consideration the working conditions in the project or buying company – such as health and safety, child labour and forced labour.

The new policy was adopted on July 1, 2008 and is being implemented gradually. The policy involves building up our expertise in corporate responsibility and human rights and formulating methods for managing these issues in our operations. EKN’s staff regularly undergo training in corporate responsibility.

It is important for us to incorporate dialogue with customers and other interested parties into our corporate responsibility development. When the Berne Union, the association for export credit and investment insurance, held its annual meeting, we and our customer Atlas Copco gave a presentation of how an export credit agency can work with its exporters in the area of corporate responsibility.

Environmental classification

Under EKN’s environmental policy, medium and long-term export transactions are classified into three categories, A, B or C, according to their potential environmental impacts. Category A signifies a major risk of a negative impact on the environment, B a lesser, C a minimal or no impact on the environment.

Most of the transactions with medium- and long-term credit periods that we guaranteed during the business year fell into the C category. In other words, they were judged to have minimal or no environmental impact.

The table below shows the transactions over SEK 100 million in environmental categories A or B for which we issued guarantees during the year. In addition to these transactions, we also deal with environmental issues in many transactions below SEK 100 million and transactions for which we have not yet issued guarantees.

Evironmental classification category A and B

Category A
Transmission, Angola	Export of converter stations for a transmission project. An important environmental consideration was the positioning of the transmission line. The converter stations are set up next to the existing ones.
Equipment for earthworks, United Arab Emirates	Export of equipment for pre-construction earthworks.
Category B
Fibre-optic cable, Angola	Delivery and installation of submarine and terrestrial fibre-optic cable. Important environmental considerations include the positioning of the cable and minimisation of impacts on important beaches used by sea turtles as nesting grounds.
Panel board manufacture, Turkey	Extension of an MDF panel board factory. Emissions into the air and water conform with World Bank standards.
Thermal power plant, Russia	Construction of a gas-based thermal power plant. Emissions of nitrogen dioxide and carbon monoxide conform with World Bank standards. No air quality standards will be exceeded due to the project.
Electricity supply, Azerbaijan	Replacement of existing sub-stations in an electricity grid. Results in more efficient transmission.

More environmental awareness

During the year, EKN took part in a knowledge-building programme based on the OECD’s environmental guidelines ‘Common Approaches’ (revised in June 2007) in the framework of the OECD’s international environmental cooperation initiatives. Exchange of information and experience with regard to environmental reviews of transactions has been strengthened as a result of increased cooperation within the network of environmental experts.

Cooperation on environmental issues

EKN, Swedfund, the Swedish Export Credit Corporation, Almi, the Swedish Trade Council, Nutek and Swentec have been working together in the environment technology export group since autumn 2006. More partners have joined, and at present the Swedish Energy Agency, Sida (Swedish International Development Cooperation Agency) and Vinnova (Swedish Governmental Agency for Innovation Systems) are also participating. The purpose of the cooperation is to help environmental technology companies grow, export and, particularly important, obtain good project financing. Joint seminars and company visits have been arranged and the cooperation will continue in its development.

Heavily Indebted Poor Countries

EKN takes into consideration the debt situation of heavily indebted poor countries. We only participate in projects which are economically viable and financed by donations or loans with preferential terms. This applies to the issuing of guarantees which increase direct or indirect state indebtedness in countries which have restrictions in their commercial borrowing. Companies have transactions with private buyers in these countries, and we guarantee these transactions.

In 2008, the OECD decided on a general policy for issuing guarantees to heavily indebted poor countries. This will not affect EKN to any considerable degree, as we have been applying a similar policy for some years.