Project Details
Project
Airport Authority Sustainable Finance Framework Second-Party Opinion (2021)
Client
Airport Authority
Project Type
Sustainability Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
Hong Kong
Evaluation Date
Oct 2021
Evaluation Summary
USE OF PROCEEDS
The eligible categories for the use of proceeds – Green Buildings, Clean Transportation, Energy Efficiency, Renewable Energy, Pollution Prevention and Control, Water and Wastewater Management, Climate Change Adaptation, Terrestrial and Aquatic Biodiversity, Affordable Basic Infrastructure, Employment Generation and, Socio-Economic Advancement and Empowerment – are aligned with those recognized by both the Green Bond Principles, Social Bond Principles, Green Loan Principles, and Social Loan Principles. Sustainalytics considers that investments in the eligible categories are expected to help improve the environmental impact of airport operations while increasing access to basic infrastructure and stimulate employment generation in the Hong Kong region, and advance the UN Sustainable Development Goals, specifically SDG 6, 7, 8, 11, 12, 13, 14 and 15.
PROJECT EVALUATION / SELECTION
Airport Authority internal process for evaluating and selecting projects will be carried out by its Sustainability Executive Taskforce (SET), which consists of the CEO and executive directors overseeing different departments. Department heads along with respective project teams identify eligible projects, which receive a final approval from the SET. The SET will oversee the risk assessment and management of potential eligible projects and all allocation decisions relating to these. Sustainalytics considers these risk management systems to be adequate and the project selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
Airport Authority commits to monitor and track the net proceeds via an internal register overseen by its Financial Accounting Department. The organization intends to allocate the net proceeds within two years after each issuance. Pending allocation, unallocated proceeds will be temporarily held in the forms of cash and cash equivalents, deposits, certificate of deposits or used to repay existing indebtedness. Airport Authority will be excluding refinancing of any debt that is associated with activities/assets that are inherently emissions-intensive or otherwise negatively impactful. This is in line with market practice.
REPORTING
Airport Authority intends to report on allocation and impact of proceeds through sustainability reports on its corporate website on an annual basis until full allocation. Allocation reporting will include a list of eligible projects, description of major projects, the total amount allocated to eligible projects, the amount of unallocated proceeds, as well as the share of financing versus refinancing. In addition, Airport Authority is committed to reporting on relevant impact metrics. Sustainalytics views Airport Authority’s allocation and impact reporting as aligned with market practice.