What's going on?

Finnish telecoms company Nokia announced it�d dialed up almost $2 billion of new funding on Wednesday. Unusually, however, the cost of the debt will be contingent on progress towards its environmental targets…

What does this mean?

Nokia�s new �revolving credit facility� is similar to the arranged overdraft you might have with your bank. The line of credit comes with a fee � but for Nokia, the precise cost will be determined by whether or not the company hits its sustainability targets. If, by 2030, Nokia�s successfully reduced its own greenhouse gas emissions by 41% and the gases emitted by its products by 75% compared to 2014 levels, it�ll pay banks less than the base interest agreed. Failure to do so will mean it pays more.


The agreement is emblematic of the recent growth of �green finance�, which includes �green bonds� whose funds are specifically earmarked for use on environmentally friendly projects.

Why should I care?

For you personally: Cold in judgment, green in blood.

Organizations linking their financial futures to positive environmental progress � as opposed to simply paying lip service to the climate crisis � may be taking a step in the right direction towards some of the $2 trillion worth of green corporate opportunities identified earlier this month. And Nokia may now become more attractive to the growing number of investors focused on backing environmentally friendly stocks � including hedge funds hoping to attract your money. US regulators are currently considering whether to allow �retail investors� earning less than $200,000 to invest in that notoriously risky industry.

The bigger picture: Race to the Finnish line.

Several major European nations, including the UK, have now pledged to become �carbon neutral� by 2050 ahead of a climate summit next week. But Nokia�s home country expects to be well ahead of the curve, promising it�ll be carbon neutral by 2035 (only Norway, with a target of 2030, is more ambitious). With Finland�s largest company now putting its money where its green is, success appears likely.