Responsible financing

Finnvera provides loans and guarantees for domestic projects, and grants guarantees for the exports of Finnish companies and export credits for financing foreign buyers. In the assessment of projects carried out abroad, the social and environmental impact assessment plays an important role. When assessing projects abroad, Finnvera adheres to international standards and guidelines. Domestic projects are assessed on the basis of the laws of Finland and the EU.

General principles of responsible financing

Finnvera’s Code of Conduct steers all activities. Financing operations are based on the provision of financing for economically viable business and meticulous risk assessment when making financing decisions. The overall financing responsibility is steered, among others, by the following principles:

  • Financing decisions are based on criteria for assessing profitable business; these criteria are defined in advance.
  • In order to avoid conflicts of interest and to ensure impartiality, Finnvera observes the disqualification provisions laid down in the Administrative Procedure Act.
  • In its financing activities, Finnvera complies with the obligation to know its customers, the intention being to combat money laundering and the financing of terrorism.
  • It is strictly prohibited to receive or offer any financial or other benefit if it is likely to undermine confidence in the party concerned or in the impartiality of Finnvera’s actions.

Principles steering the financing of projects carried out abroad

In export financing, Finnvera complies with the OECD Arrangement on Officially Supported Export Credits and with the standards and guidelines published by the International Finance Corporation (IFC) of the World Bank Group.

The social and environmental impact assessment is steered by the Recommendation of the OECD Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence, the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the UN Framework Convention on Climate Change.

Finnvera complies with the guidelines and criteria published by the OECD, which also strive to ensure that export credit agencies’ project reviews, definitions and conditions are applied consistently among providers of export financing.

”In its export financing operations, Finnvera complies with several international rules and its own project policy, among other regulations.”

Finnvera has a project policy that is used to examine the environmental and social impacts of projects. Thanks to the policy updated in 2016, increased attention is now paid to human rights. Another clear change was the inclusion of guarantees granted to shipping companies and shipyards within the scope of the project policy. In addition, all power plant projects that use fossil fuels must report their greenhouse gas emissions to the OECD.

In its anti-bribery measures, Finnvera follows the recommendations issued by the OECD Export Credit Group. Moreover, Finnvera has its own anti-bribery policy that is in agreement with responsible export credit guarantee and credit operations. This means that, for each project, Finnvera requests financiers and exporters to sign a declaration that they have not participated in bribery. In 2017, Finnvera also updated its Know Your Customer policy that will enter into force at the beginning of 2018.

Finnvera complies with the OECD’s principles of sustainable lending when granting export credit guarantees and export credits for the poorest countries.

Further information on international cooperation and international rules that regulate Finnvera’s export financing

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Assessment of the social and environmental risks of projects carried out abroad

In projects carried out abroad, if Finnvera’s liabilities for guarantees exceed EUR 10 million and the loan repayment period is more than two years, the project always undergoes an assessment of the environmental and social risks. A risk assessment is also conducted for projects under EUR 10 million if the project is considered to involve significant potential environmental or human rights risks.

In general, Finnvera’s project review encompasses the whole project even when export financing is granted, for instance, for an individual delivery of equipment.

Projects are divided into four categories: A, B, C and non-project. In Category A, the applicant must provide Finnvera with an external party’s report of the assessment of environmental and social impacts, and impacts are reviewed more extensively—the project may be, for instance, a pulp mill, a mine or a power plant. In Category B, the information required is more limited. No background studies are needed for Category C and non-projects. In 2017, ten Category A and Category B project reviews were conducted.

Granting financing for Category A projects requires that the information on environmental and social impacts is published 30 days before Finnvera signs the agreement on export financing. This allows stakeholders, at their discretion, to submit comments before the actual decisions are made.

Consideration of social impacts in projects

Social impacts refer to the project’s impacts on local communities and on persons involved in the construction and operation of the project. Social impacts include the human rights aspects associated with the project.

The impacts may relate, for instance, to the working conditions and rights of workers, the health and safety of local communities, the acquisition of land and forced relocation, the rights of indigenous peoples, and cultural heritage. Project-specific human rights factors are forced labour, child labour, and occupational health and safety issues threatening human life.


In 2017, ten project reviews of environmental and social risks were conducted.

The impacts on working conditions, local communities and workers are weighed for all projects that are assessed. Human rights risks are assessed even for modernisation projects of existing plants, for instance.

In 2017, Finnvera established a separate Human Rights Adviser position in the Country and Environmental Risk Management Team in the Large Corporates unit.

Monitoring of projects

The impacts of projects can also be monitored during the progress of the projects. Category A and Category B projects are monitored until the end of the loan repayment period.

During their construction and production stages, several major projects are monitored by external consultants. If shortcomings are discovered during the project, the corrective action plan defined in the loan agreement terms is drawn up and monitoring will continue. Additionally, the parties implementing the projects are often required to report annually to Finnvera. If the various parties cannot agree on how the shortcomings should be corrected, the last resort is to terminate the loan agreement.

”The impacts of projects can also be monitored during the progress of the projects.”

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Responsibility and transparency guide the assessment of environmental and human rights risks

The assessment of the environmental and social risks plays an important role in projects carried out abroad. At Finnvera, assessments are conducted by Lauri Etelämäki, Environmental Adviser, and Timo Hankala, Human Rights Adviser, who started working in this position in autumn 2017. The assessment is a concrete way of ensuring that the company operates responsibly, and work is driven by the aim of achieving transparency.

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