Project Details
Project
Íslandsbanki Sustainable Funding Framework Second-Party Opinion (2024)
Client
Íslandsbanki
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Clean transport; Energy efficiency; Renewable energy; Pollution prevention and control; Water/waste water management; Green buildings; Natural resources/land use management; Eco-efficient products; Access to essential services; Affordable housing; Employment generation and Socio-economic empowerment; Socio-economic advancement;
Location
Iceland
Evaluation Date
Jan 2024
Evaluation Summary
Sustainalytics is of the opinion that the Íslandsbanki Sustainable Funding Framework is credible, impactful and aligned with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021 and Social Bond Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles and Social Bond Principles. Sustainalytics considers that investments in the eligible categories are expected to contribute to the transition to a low-carbon economy, help support the socio-economic development of Iceland and advance the UN Sustainable Goals, specifically SDGs 4,7,8,9,11,12,14 and 15.
PROJECT EVALUATION AND SELECTION
Íslandsbanki’s Sustainability Committee will be responsible for the process of evaluating and selecting eligible loans in line with the Framework’s eligibility criteria. The committee consists of representatives from Íslandsbanki’s different business areas, risk management and the Sustainability Manager. Íslandsbanki’s Sustainability Committee will provide final approval to eligible loans. All potential loans will undergo an ESG risk assessment and a standard credit process to ensure compliance with applicable domestic and international rules and regulations. Sustainalytics considers Íslandsbanki’s risk management systems to be adequate and the project evaluation and selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
Íslandsbanki’s Finance Department will be responsible for the management of proceeds on a portfolio basis and track the allocation of proceeds using the sustainability register. Íslandsbanki intends to allocate the proceeds within 18 months of issuance. Pending full allocation, unallocated proceeds will be invested in accordance with the internal requirements of Íslandsbanki’s liquidity reserve. This is in line with market practice.
REPORTING
Íslandsbanki commits to report on the allocation of proceeds in an allocation and impact report, which will be published on its website on an annual basis until full allocation. In addition, Íslandsbanki intends to report on the environmental or social impact of the loans financed under the Framework. Sustainalytics views Íslandsbanki’s allocation and impact reporting as aligned with market practice.