Sustainability policy guides sustainable operations at MuniFin

All of MuniFin’s operations are founded on our governance model, policies, guidelines and instructions, which are supplemented by a set of guidelines focusing specifically on sustainability and responsibility. These include our sustainability policy, risk appetite framework, green and social bond frameworks, sustainable investment framework and principles of ESG assessment in customer finance.

MuniFin’s sustainability policy is approved by the Board of Directors. Sustainability encompasses the ethics of operations and the ESG aspects related to social responsibility and stakeholder needs, including risks related to the environment, climate, social responsibility and governance. It also covers MuniFin’s core processes from financing and funding to investments and governance.

Ethical principles serve as a guideline for the entire staff

MuniFin’s ethical principles apply to all employees and cover compliance with legislation, administrative regulations, internal policies and work instructions as well as expectations of integrity and the diligent performance of duties. They include guidelines for preventing corruption, money laundering and terrorist financing as well as rules regarding gifts and hospitality, confidentiality, conflicts of interest and suspected misconduct.

Learn more about MuniFin's ethical principles
A person is sup boarding in the Finnish seaside.

Sustainable investing

MuniFin’s sustainable investment framework summarises the principles, processes and responsibilities of our investment activities. We report the development of our sustainable investments quarterly on our website and as part of our annual reporting.

Our investment policy only allows investments in debt securities issued by financial institutions, states and public entities operating in OECD countries. Because the OECD member countries support the United Nations Sustainable Development Goals (SDGs), this practice promotes responsible investment.

MuniFin is committed to the following principles in its investments:

  • We exclude investments and issuers that do not adhere to our principles of sustainability.
  • We actively monitor and manage the environmental, social and governance (ESG) score of both individual issuers and our entire liquidity portfolio.
  • We make direct investments in debt instruments classified as sustainable, directly promoting the UN SDGs.

Sustainable procurement and partnerships

In procurement, MuniFin follows its sustainability policy and procurement instructions, considering the principles of sustainability from environmental, social and governance perspectives. Our procurement process includes evaluating the environmental impacts and recycling opportunities of our purchases.

We have also set sustainability criteria for our partners because we want our values to be reflected in the activities of third parties providing services or products to us.

We require our partners to comply with all relevant legislation, regulatory standards, generally accepted practices and existing contracts and commitments.

We have minimum requirements for our partners regarding their responsibility for the environment, people and strong corporate governance. For example, our partners are expected to minimise their negative environmental impacts, respect human rights, promote employee wellbeing, prevent harassment and discrimination and ensure job safety. In their governance, we expect our partners to maintain good financial management, adhere to ethical practices, ensure information security, identify and report conflicts of interest, take active measures and define principles for preventing corruption and investigate and report suspicions of misconduct.

This is what we expect from our network

How we assess the ESG risks related to financing

MuniFin reports on the ESG risks related to its operations and on the company’s methods for managing them in the Pillar III disclosure report on capital adequacy and risk management published concurrently with the annual and half year reports.

MuniFin’s ESG risks concern climate and environmental risks as well as risks related to governance and social responsibility. Most of these risks materialise through the projects we finance. For this reason, we continuously develop the ESG assessment of financed projects at both customer and project levels, with special emphasis on identifying and managing climate and environmental risks.

ESG risks related to customers and financed projects are assessed both during the financing process and as part of each customer’s annual risk assessment.

MuniFin is a member of the Partnership for Carbon Accounting Financials (PCAF) initiative, which aims to develop and implement a standardised approach to assessing and disclosing the greenhouse gas emissions associated with loans and investments. As part of the PCAF development work, we are developing the emission calculations for the projects we finance.

We offer a digital ESG application for our municipal sector customers to make it easier for them to access data and increase their expertise. In our application, municipalities can monitor and compare their ESG indicators, which are based on the UN Sustainable Development Goals. The application is provided by an external service provider.

Learn more about the ESG assessment in customer finance

MuniFin ESG ratings

ESG risk ratings measure a company’s exposure to long-term environmental, social and governance risks. Different ESG ratings employ different methodologies, so they are not directly comparable with each other.  In practice, however, they cover similar themes, such as sector-specific risk, manageable risk and the company’s overall ESG strategy and operating methods. MuniFin monitors its development through the ratings of several well-known ESG rating agencies.

See our ESG ratings

Learn more about MuniFin's corporate governance

The administration and policies of Municipality Finance Plc (MuniFin) are being constantly developed to correspond to the needs of its owners, customers, investors, staff and the increasing regulation.

Read more about MuniFin's corporate governance

Contact us

Our sustainability team