Sweden

Sweden has a legally binding Climate Act and an ambitious net-zero greenhouse gas emission target by 2045. The country's framework is detailed, publicly accessible, and includes comprehensive goals, such as intermediate targets for 2030 and 2040, and the requirement for a Climate Policy Action Plan every four years (the second of which was presented in late 2023). The framework also includes a system of accountability via the independent Climate Policy Council. The Green Industrial Transition Strategy (2023) has mobilized large-scale investments in fossil-free steel, battery production and green hydrogen. In parallel, the Circular Economy Strategy (2020–2030) and the Environmental Objectives System (16 long-term goals) ensure coherence between biodiversity, pollution control and sustainable resource management. However, some recent policy shifts by the government have created some uncertainty regarding climate action.

Sweden has comprehensive and mandatory frameworks for inclusive corporate governance, now further strengthened and aligned with EU-mandated sustainability standards. The Board Representation (Private Sector Employees) Act mandates that employees in nearly all companies with 25 or more employees must be represented on the board. While Sweden has not yet implemented the EU's Gender Balance on Boards Directive, it has a de facto gender balance (over 40% female on the boards of listed companies is common) and its history of progressive gender equality laws demonstrate commitment. The implementation of the EU's Corporate Sustainability Reporting Directive includes detailed reporting on environmental, social, employee matters. This mandatory reporting requires companies to consult with employee representatives regarding their sustainability reports.

Sweden maintains a robust and legally mandated system for public consultation on proposed legislation, primarily through the remiss process and the Council on Legislation (Lagrådet). Mandatory Impact Assessments (IAs), particularly for gender equality, are a deeply embedded practice. However, while significant progress has been made with the 2022 Sámi Consultation Act and new action plans for other marginalized groups, the assessment framework is not yet fully comprehensive or mandatory in all cases. The Sámi Act does not fully meet the international standard of Free, Prior, and Informed Consent (FPIC), and ongoing 2025 analysis by national human rights institutions still points to a persistent lack of consistent, high-quality human rights impact assessments for all legislative proposals, indicating coverage for all marginalized groups remains uneven.

Sweden leads globally in integrating beyond GDP approaches into national planning, with a comprehensive framework that links economic, social and environmental well-being across policy cycles. The government applies wellbeing and sustainability indicators in policymaking through Statistics Sweden’s (SCB) national system of environmental-economic and social accounts, fully aligned with SEEA and the OECD Well-being Framework. The Comprehensive Wealth and Sustainability Dashboard, maintained by SCB since 2023, tracks human, natural, social, and financial capital alongside GDP. The Ministry of Finance and Ministry of Climate and Enterprise jointly use these metrics in the National Reform Programme and annual Budget Bill to assess sustainable economic progress and ecological boundaries. Sweden’s Wellbeing Economy Framework also incorporates subjective and objective wellbeing measures, with regular parliamentary reporting on sustainability trends through the Generational Goal and Environmental Quality Objectives systems. The 2024 Sustainability and Prosperity Strategy commits to integrating these indicators into the National Accounts by 2027.

Sweden's financial regulators are increasingly mandating climate disclosure and scenario analysis by banks and institutional investors, and the country is a leader in sustainable investment. The Riksbank's 2025 Climate Report confirms its work to identify, analyse and manage climate-related risks, and FI is integrating ESG risks into its supervisory activities, including climate-related transition risks in banks' lending portfolios. While stress testing and prudential regulation are well established for financial risk, the full integration of environmental and climate factors into mandatory stress tests and regulatory capital frameworks is still evolving. The key gap identified is the lack of concrete policy commitments to penalise investment in high polluting industries.

Sweden continues to lead in green fiscal policy through its carbon tax, one of the highest globally, covering transport, heating, and industrial sectors. The Swedish Climate Policy Council conducts annual reviews of government spending and climate alignment. The Riksbank (central bank) has integrated sustainability screening into its asset purchases, excluding fossil fuel companies from its corporate bond portfolio. However, climate-related monetary instruments (e.g., green refinancing or interest rate adjustments) are still under discussion and not yet implemented.

As an EU Member State, Sweden’s trade policy is largely channelled through EU Free Trade Agreements. The EU now systematically includes Trade & Sustainable Development (TSD) chapters in FTAs and has strengthened enforcement (state-to-state dispute settlement and potential sanctions), and the EU-New Zealand FTA provides zero tariffs on a list of green goods and bindings on circular-economy services. However, EU FTAs do not systematically eliminate tariffs on a broad ACCTS-style list of environmental goods/services, nor integrate full interoperability of carbon pricing systems or taxonomies, nor binding fossil-fuel subsidy disciplines, and Sweden/EU are not yet part of ACCTS. Additionally, Sweden's own national green taxonomy, which is in the process of being fully implemented, is designed to build upon the EU's taxonomy. On ISDS reform, the EU is developing the Investment Court System and advocates for a Multilateral Investment Court.

Sweden is a global frontrunner in carbon pricing. Sweden’s explicit and implicit carbon pricing instruments cover more than 95 % of fossil carbon emissions. Beyond pricing, Sweden has established a Climate Policy Framework (2017) that mandates the government to align its budget with climate goals, produce regular climate reports in the budget, and issue climate action plans every 4 years. It also maintains an independent Climate Policy Council to review consistency of policy with targets. However, it is not a fully binding carbon budget.

Sweden’s green transition is coordinated through the Swedish Environmental Protection Agency, the Ministry of Climate and Enterprise, and the Swedish Climate Policy Council, ensuring inter-ministerial alignment. Sectoral strategies exist for energy, transport, agriculture, forestry, and industry, all integrated into the Climate Act (2018) and the Fossil-Free Sweden initiative. The National Climate Roadmaps developed by 22 industry sectors provide detailed decarbonization plans.

Sweden is among the most advanced countries globally in circular economy policy. The country has a comprehensive, cross-sectoral Circular Economy Strategy (2022) and action plan (2020), embedding circularity into industrial strategy, construction and demolition waste regulations, plastics action plans and other sectoral policies, as well as into procurement law (the National Agency for Public Procurement has circularity guidelines for agencies). The Swedish plan sets targets for increased resource efficiency and material reuse, in line with the EU Circular Economy Action Plan. Sweden introduced tax reductions on repair services (electronics, bikes, clothes) and a right-to-repair initiative well ahead of EU legislation. Its national plan contains strong linkages with climate policy, including circularity for critical transition minerals (rare earths, batteries) to support the green transition. Government-funded programs (Vinnova, Tillväxtverket) support circular business models, industrial symbiosis, and regional CE hubs, and Sweden has also put in place specific measures and monitoring frameworks for a just transition approach toward circularity.

Sweden's official and legally binding target is for a 70% reduction in domestic transport emissions by 2030, with the goal of a fossil-free transport sector by 2045. The Swedish government's National Transport Plan and the Electrification Strategy include investments in expanding electrified rail lines. The Swedish Transport Administration (Trafikverket) is investing in the expansion of electric road systems for heavy freight.

On private EV uptake, the country has policies beyond simple tax incentives, like a Bonus-Malus system that taxes high-emission vehicles and rewards low-emission ones. The country's tax system is designed to favor EVs over internal combustion engine (ICE) vehicles. For example, zero-emission vehicles pay minimal annual road tax, and companies receive tax deductions for electric company cars. These policies are complemented by an implementation framework for EV charging infrastructure, with government grants covering a substantial portion of the installation costs for public, workplace, and residential charging stations.

The public transport sector is progressively adopting electric and renewable-fuel buses, and major cities like Stockholm are implementing low-emission zones. Overall, the country's policy framework addresses both urban and rural areas, since rural or heavy-duty transport electrification lags behind in the country.

The Swedish Climate Policy Council, an independent body, monitors and evaluates progress, ensuring that policies are effective and aligned with the 2030 and 2045 goals.

Sweden maintains its target of 100% renewable electricity by 2040, with over 75% of electricity already from renewables, mainly hydro and bioenergy. The Transport Sector Strategy now includes a goal of 100% fossil-free vehicle fleet by 2030, supported by EV subsidies, charging infrastructure, and biofuel blending mandates. The Energy Agency tracks consumption across sectors, and the National Electrification Strategy supports grid expansion and industrial decarbonization.

Sweden’s labour market policies include green job creation for migrants and long-term unemployed, especially in forestry, circular economy, and energy efficiency. The Swedish Public Employment Service coordinates training and placement, and the Green Transition Fund supports regional job creation. However, a unified national green jobs strategy is still lacking, and monitoring of job quality and inclusion remains uneven.

Sweden has established one of the most advanced national frameworks for just transition in Europe. The government’s Just Transition Strategy for a Climate-Neutral Sweden (2023) provides a comprehensive framework guiding decarbonisation while protecting workers and communities, and it is closely aligned with the Swedish Climate Policy Action Plan 2023–2026 and the Green Industrial Transition programme, which channels significant funding toward regional transformation and social dialogue mechanisms in high-emission industries such as steel, cement and transport. The Job Transition Agreement, developed through collaboration between the state, trade unions and employers, ensures income security and opportunities for workers impacted by industrial restructuring. Targeted measures also support rural and northern regions undergoing rapid industrial transformation. Sweden’s approach incorporates gender equality, youth employment and inclusion of migrants.

Sweden has targeted financial and non-financial support for 'greening' MSMEs. Programmes like the Climate Leap (Klimatklivet) and access to EU-backed funds like the Swedish Impact Lending 1 offer substantial co-financing and grants for MSMEs to adopt green technologies and reduce emissions. For social enterprises, a separate legal form remains pending, but the government and its partners actively recognize and support the sector through specific initiatives like the Impact Pioneers '25 programme

Sweden’s social protection system remains one of the most comprehensive globally. While cooperative ownership and reduced working hours are mainstream, new pilots include basic income experiments in selected municipalities and green transition-linked social support for displaced workers. The Swedish Social Insurance Agency and National Board of Health and Welfare are exploring climate resilience in welfare systems.

The new National Biodiversity Strategy and Action Plan (NBSAP) is scheduled to be forwarded in 2025, but Sweden has already submitted over 60 national targets and objectives aligned with the GBF. A key national commitment is the goal to protect 30% of its marine area by 2030, a target for which the government has presented a bill to Parliament. Furthermore, legislation to ban bottom trawling in Marine Protected Areas went into force in 2025. Sweden has an established system of follow-up on its national environmental objectives, which provides a framework for progress assessment. The official assessment of the objectives notes that the trends for biodiversity are negative, indicating that the system needs greater ambition and effective implementationto meet the 2030 goals.

Sweden is among the global leaders in natural capital accounting and governance. Its national statistical authority produces System of Environmental and Economic Accounts (SEEA) linking environmental metrics to economic variables. The Swedish Environmental Protection Agency coordinates environmental monitoring, oversight and guidance across agencies. Moreover, Sweden already has institutional structures in place that act in expert advisory roles, such as independent public agencies and councils that assess environmental policy.

The National Food Strategy, adopted in 2017 and updated in 2024, sets out a long-term framework until 2030 for the food supply chain, with goals of increasing competitiveness, sustainability, and innovation. It includes targets for organic food production, environmental objectives, consumer information, and promoting informed, sustainable consumption. No explicit subsidy phase-out plan or major harmful subsidy reform tied to the food strategy.

The Swedish CAP Strategic Plan (2023-2027) includes support for farmers for transitioning to organic farming and reducing reliance on synthetic fertilizers and pesticides, with a focus on regenerative agriculture techniques and stronger environmental and climate standards, as well as animal welfare and resource-use efficiency.

The Swedish Food Agency updated its national dietary guidelines in 2025, emphasizing healthier, more sustainable eating patterns by recommending a reduction in red meat and an increase in plant-based foods. In parallel, Sweden has set targets for food waste reduction, aiming for a 20% reduction per capita by 2025 compared to 2020 levels.

On public procurement, the National Agency for Public Procurement provides agencies with guidelines to prioritize locally produced and organic foods.

Sweden continues to maintain one of the most mature environmental fiscal systems globally, anchored by a comprehensive carbon tax and a legal foundation for the Polluter Pays Principle under the Environmental Code. Environmental taxes remain significant, but their share of GDP has declined from 2.5 % in 2010 to 1.6 % in 2023 (OECD 2024), reflecting a reversal of the green tax shift. The 2025 abolition of the flight tax and reduced fuel excise duties have further eroded fiscal signals discouraging pollution, while environmentally harmful subsidies have increased. At the same time, Sweden is developing a new National Biodiversity Strategy and Action Plan (2025) and has committed to protecting 30 % of marine areas by 2030, alongside support for Sámi-led rewilding and habitat restoration projects. These demonstrate active but partial reform and some nature-positive investment aligned with IPLC stewardship. However, the overall fiscal stance now shows limited new finance and backsliding on harmful-subsidy reform.

Sweden has deployed multiple ambitious green stimulus measures that are closely tied to its climate objectives and long-term structural transition to a green economy. During the COVID-19 period, the Swedish government implemented what it called a “green restart,” which included significant investments in energy efficiency in multi-dwelling buildings, expanded charging infrastructure for heavy vehicles, early railway maintenance, subsidies for green technologies and measures to protect natural habitats. Recent budgets continue to place substantial emphasis on environmental and climate funding. The government also contributes significantly to global climate finance (8 billion to the Green Climate Fund) and links aid, trade, and private capital mobilisation with green transition goals. Sweden has one of the world’s most solid carbon taxes and the government is linking climate goals (net-zero by 2045) with its budgetary plans and investment measures.