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2022 will be the year of the EU taxonomy, says Nordea ESG expert

2022 will be the year of the EU taxonomy, says Nordea ESG expert

As the EU taxonomy enters into force in 2022, Nordea Sustainable Finance Advisory's Juho Maalahti is eager to help companies and investors tackle new challenges.
Juho Maalahti, Nordea Sustainable Finance Advisory

Juho Maalahti, Nordea Sustainable Finance Advisory

When Juho Maalahti first joined Nordea back in 2013 within retail banking, he had not encountered the concept of ESG. Fast forward eight years to today, and ESG is Maalahti’s bread and butter, as he returns to Nordea as the Finnish lead of the bank’s Sustainable Finance Advisory team.

“In the Finnish market, as elsewhere, there’s much stronger momentum on sustainable finance than ever before. It’s also such a new area that each case or transaction is unique with no textbook answers,” he says. The prospect of helping clients tackle such novel challenges is what motivates him in his new role.

After his first couple of years at Nordea, Maalahti left the banking world for consulting. It was there he first became familiar with ESG, working on an ESG due diligence project for a private equity acquisition. The experience sparked an interest strong enough that when he stumbled across a LinkedIn ad for a three-month ESG analyst gig at Nordea in 2016, Maalahti jumped on the opportunity.

“That was where my journey in sustainable finance at Nordea began,” he says.

Sustainable finance is such a new area that each case or transaction is unique, with no textbook answers.

Juho Maalahti, Nordea Sustainable Finance Advisory

Drawn to a client-centric role

Maalahti started out building Nordea’s ESG competencies with credit risk management, working on a tool to evaluate risks among corporate customers. When green bonds started to take off in the market, he moved into managing Nordea’s green bond asset portfolio and developing the bank’s green bond framework. That led to a role in investment banking where he became head of sustainable loans.

After a recent stint on Handelsbanken’s debt capital markets (DCM) origination team, the prospect of working with a full spectrum of Finnish clients across a broad range of sustainability issues drew him back to Nordea and his current role on the Sustainable Finance Advisory team.

“I’m excited to be working in a product-agnostic manner with Nordea’s Finnish clients, both on individual sustainable debt transactions and in an overall advisory role, especially related to sustainable finance regulation,” he says.

EU taxonomy becomes a reality

Looking ahead to the coming year, Maalahti says 2022 will likely be the year of the EU taxonomy, the EU’s ambitious framework for classifying green investments. In December, the first two chapters of the taxonomy were passed into law after being approved by the European Council. They enter into force from 1 January 2022.

“While there’s been discussion about the taxonomy for some time, this is the first year companies will be required to apply it in their own reporting. And it’s likely to be increasingly used in the financial market as well,” he says.

He notes that while the taxonomy is explicit and full of detailed criteria, it still leaves room for subjectivity and individual company judgment. That’s where Sustainable Finance Advisory’s role comes in: to help clients figure out what’s relevant in the taxonomy and the expectations of financial markets towards their reporting and possible application in transactions.

“Over the past years, there’s been an explosion of new tools, metrics and standards, it can be difficult for companies and investors to navigate the ESG jungle,” he says, adding, “That’s what I like doing, talking with clients, understanding their needs and helping them cut through the noise and figure out the most relevant approach.”

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