Distribution of lending by industry

Our lending funds a wide range of local projects across Danish society and is deeply rooted in social responsibility. To provide better insight into the specific types of investments supported by our bond issuances, we have categorised our loans according to the international industry classification system, NACE.

Our loans and leases are deeply rooted in social responsibility

Looking into the distribution of lending by industries classified according to the international industry classification system, NACE, it is clear that KommuneKredit’s loans and leases have a strong socially responsible profile.

Our members and clients have high ambitions when it comes to both environmental and social accountability. At the same time, our organisation serves the interests of the community as a whole, which is clearly reflected in our portfolio.

Municipal and regional activities, together with utility sector activities, represent the largest share of our lending portfolio. More than 85 per cent of KommuneKredit’s loans are distributed across the following sections:

  • O: 'Public administration and defense; compulsory social security'
  • D: 'Electricity, gas, and district heating supply'
  • E: 'Water supply, sewerage, and waste management'
  • Q: 'Health services and social work'
  • The remaining approximately 15 per cent of our portfolio is spread across various other loan purposes.

About the industry classification system NACE

In Denmark, we use Statistics Denmark’s Danish Industry Code 2007 (DB07), which follows the international industry classification system for industry classification, NACE. NACE codes consist of a letter representing the main section, followed by a four-digit code describing the main and sub-group.

DB07 codes consist of six digits. The first four digits correspond to the four-digit NACE codes, while the last two digits provide additional Danish-specific details about the industry.

The industry classification is primarily based on a primary NACE code, which companies register themselves when establishing their business and subsequently maintain. By using a standardized code, it is ensured that the industry classification of KommuneKredit’s customers is carried out in a consistent manner in Statistics Denmark’s Business Statistical Register (ESR) and thereby also in the Central Business Register (CVR), from which KommuneKredit retrieves its data.

Please note that the purpose of an investment determines whether a borrower can obtain financing from KommuneKredit. Therefore, not all activities within the individual industry codes are eligible for loans or leasing at KommuneKredit. Ultimately, the investment must fulfill a public purpose.

Our total lending and leasing distributed according to NACE codes assigned on customer level

Public administration

Over 40 per cent of our loans and leases fall within section O: 'Public administration and defense; social security'. For us, loans in this section are predominantly (90 per cent) associated with investments in 'General public services' (NACE code 8411). Municipalities can take out loans based on annual capital expenditures, such as for example energy renovations and loan pools related to municipal agreements. The remaining part within this section, 8 per cent and 2 per cent respectively, goes to the sub-groups ‘Regulation of the activities of providing health care, education, cultural services and other social services, excluding social security’ (NACE code 8412) and ‘Regulation of and contribution to more efficient operation of businesses’ (NACE code 8413). The latter sub-group can include loans for the payment of the mu­ni­ci­pa­li­ties' share of, for example, the Copenhagen Metro. KommuneKredit does not provide loans for police or defense, as neither of these are municipal nor regional re­spon­si­bi­li­ties.

District heating

Just over 20 per cent of Kom­mu­ne­Kre­dit's lending falls within section D: 'Electricity, gas and steam and air conditioning supply', of which the sub-group 'Steam supply, air conditioning' (NACE code 3530) constitutes the vast majority (84 per cent). This sub-group includes energy production for district heating, planning and efficiency improvements in the distribution of district heating. It is within this sub-group that the majority of Kom­mu­ne­Kre­dit's green portfolio is represented. The remaining 16 per cent of the section is spread across sub-groups related to electricity and gas (NACE codes 3511, 3513, 3514, 3521, and 3522). Due to changes in legislation, KommuneKredit can no longer provide financing for these five sub-groups, but historically, they were eligible for loans under the prevailing legislation. Therefore, they will continue to be part of our lending portfolio for some years to come.

Water supply, sewerage, and waste management

Just over 17 per cent of Kom­mu­ne­Kre­dit's lending falls within section E: ‘Water supply; sewerage; waste management and remediation activities’. The majority of assets in this section (52 per cent) falls within the wastewater sub-group (NACE code 3700), for example, investments in the collection and transport, treatment of water at treatment plants, and other activities that contribute to energy savings, reduced environmental impact, and climate adaptation. Additionally, a significant share (25 per cent) of this section involves loans to the water supply sub-group (NACE code 3600). This includes investments in water supply facilities, piping, and other assets that improve supply security, drinking water quality, reduce water loss, and achieve energy savings. Another substantial amount of our lending within this section is related to the treatment and disposal of non-hazardous waste (19 per cent) (NACE code 3821). This may include investments in waste management aimed at reducing waste volumes, increasing the recycling rate, and achieving a more energy-efficient production of waste energy.

Health and social activities

11 per cent of our loans and leases fall within the section Q: ‘Human health and social work activities’. Within this section, the vast majority of our loans fall within the subcategory ‘Residential care activities for the elderly and disabled’ (99 per cent). Our financing within this subcategory mainly concerns the financing of housing for the elderly/senior housing (NACE code 8730). The remaining loans and leases within section Q, i.e. approximately 1 per cent, concern financing of activities related to, for example, ‘Residential nursing care activities’, ‘Residential care activities for mental retardation, mental health and substance abuse’ and ‘Other residential care activities’ (NACE codes 8710, 8720, and 8790 respectively). Of that 1 per cent, financing has also been provided for ‘Other social work activities without accommodation n.e.c’ (NACE code 8899) and ‘Child day-care activities’ (Nace code 8891).

International comparative analysis

Local government borrowing and the role of KommuneKredit

The Danish Center for Social Science Research, VIVE, has published the report ’Local government borrowing and the role of KommuneKredit: An international comparative analysis’. Based on an international comparison, the report analyses local government borrowing in Denmark.

Read a summary of the report

Related information

Projects we have financed

See more projects we have financed

Contact us

If you would like to know more about treasury and sustainable financing in KommuneKredit, please feel free to contact us.

Treasury

fundingmail@kommunekredit.dk+45 3311 1512

Sustainable finance

bf@kommunekredit.dk+45 3311 1512

Telephone hours

Monday - Friday