AIB Green Bond Framework Second-Party Opinion (2022)
AIB Group PLC
Green Bond/Loan; EU Taxonomy Assessment;
Use of Proceeds
Green buildings; Clean transport; Renewable energy;
Sustainalytics is of the opinion that the AIB Green Bond Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Green Buildings, Renewable Energy and Clean Transportation – are aligned with those recognized by the Green Bond Principles 2021. Sustainalytics considers that the provision of financing in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDGs 7, 9 and 11.
PROJECT EVALUATION / SELECTION
AIB’s Group Sustainability Committee will be responsible for overseeing the process of selecting eligible green loans according to the criteria set in the Framework prepared by the AIB ESG Bond Working Group. AIB has a dedicated environmental and social risk assessment and mitigation process that is applicable to all allocation decisions made under the Framework. Sustainalytics considers the project selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
AIB intends to manage the net proceeds in a portfolio approach and allocate the proceeds from the green bonds to the Eligible Green Loan Portfolio. Pending allocation, AIB will hold or invest in its treasury liquidity portfolio in cash or other short term and liquid instruments or pay back a portion of its outstanding indebtedness. AIB intends to allocate the proceeds at issuance. Sustainalytics considers this to be in line with market practice.
AIB intends to report on the allocation of proceeds to the Eligible Green Loan Portfolio on an annual basis, to be renewed every year until maturity of the instruments or full allocation. In addition, where feasible, AIB intends to report on the impact of the Eligible Green Loan Portfolio at least at category level, including relevant quantitative metrics, calculated by third-party consultants. Sustainalytics views AIB’s allocation and impact reporting as aligned with market practice.
Sustainalytics has assessed AIB’s Green Bond Framework for alignment with the EU Taxonomy. The Framework’s three use of proceeds categories map to 12 EU activities. Sustainalytics is of the opinion that the Framework categories are aligned with the applicable Technical Screening Criteria (TSC) of nine EU activities and partially aligned with three. Regarding the Do No Significant Harm (DNSH) Criteria, the Framework categories were assessed as aligned with DNSH criteria for eight EU activities and partially aligned with the DNSH criteria for the remaining four activities. Sustainalytics is also of the opinion that the activities and projects to be financed under the Framework will be carried out in alignment with the EU Taxonomy’s Minimum Safeguards.