Project Details
Project
Banorte Sustainability Finance Framework Second-Party Opinion (2024)
Client
Banco Mercantil del Norte S. A.
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Renewable energy; Energy efficiency; Green buildings; Natural resources/land use management; Clean transport; Water/waste water management; Pollution prevention and control; Affordable basic infrastructure; Access to essential services; Affordable housing; Socio-economic advancement;
Location
Mexico
Evaluation Date
Jan 2024
Evaluation Summary
Sustainalytics is of the opinion that the Banorte Sustainability Finance Framework is credible and impactful and aligns 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 will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDGs 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, 14 and 15.
PROJECT EVAVALUATION AND SELECTION
Banorte’s Project Selection and Evaluation Working Group is responsible for identifying eligible projects for the portfolio, under oversight of Banorte’s Sustainability Team. The Sustainability Team also manages socio-environmental risks according to the Banorte’s Socio-Environmental Risk Policy to ensure compliance with relevant legislation and Banorte’s exclusion list. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
Banorte’s Treasury Team will track net proceeds on a portfolio basis using an internal tracking system.Banorte intends to allocate proceeds within 24 months after each issuance and has established a look-back period of 24 months or less for existing projects, except for capital expenditures related to renewable energy. Pending full allocation, proceeds will be temporarily invested in liquidity accounts, short term bonds and rates derivatives. This is aligned with market practice.
REPORTING
Banorte commits to report on allocation of proceeds on its website on an annual basis until bond maturity. Allocation reporting will include net proceeds raised, amount of proceeds allocated per category, the amount used for financing or refinancing, and the total amount of unallocated proceeds. In addition, Banorte intends to report on key performance indicators. Sustainalytics considers the allocation and impact reporting commitments as aligned with market practice.