Project Details
Project
Alcoa Green Finance Framework Second-Party Opinion (2024)
Client
Alcoa Corporation
Project Type
Green Bond/Loan
Industry Group
Diversified Metals
Use of Proceeds
Eco-efficient products; Renewable energy; Pollution prevention and control; Water/waste water management;
Location
U.S.
Evaluation Date
Feb 2024
Evaluation Summary
Sustainalytics is of the opinion that the Alcoa Green Finance Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021and the Green Loan Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds –Circular Economy Adapted Products, Production Technologies and Processes and/or Certified Eco-efficient Products; Renewable Energy; Pollution Prevention and Control; and Water and Wastewater Management – are aligned with those recognized by the Green Bond Principles and Green Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDGs 6, 7, 9 and 12.
PROJECT EVALAUTION AND SELECTION
Alcoa’s Green Finance Committee is responsible for overseeing the project evaluation and selection process. The Company has established internal processes to identify and mitigate material environmental and social risks associated with the eligible projects. Sustainalytics considers the project selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
Alcoa will track proceeds using a Green Bond Register, which will be maintained by the Green Finance Committee. Alcoa is committed to allocating bond proceeds within 36 months of the settlement date. Unallocated proceeds will be managed according to Alcoa’s regular treasury operations, which includes holding in cash, deposits or money market instruments, and used for the repayment of existing debt. This is in line with market practice.
REPORTING
Alcoa commits to report on the allocation of proceeds and, on a best-effort basis, the relevant impacts on its website on an annual basis until full allocation. Allocation reporting will include the amounts allocated to eligible projects, the balance of proceeds outstanding and the amount or percentage of new financing and refinancing. Sustainalytics views Alcoa’s allocation and impact reporting as aligned with market practice.