Project Details
Project
Bancolombia Sustainability-Linked Financing Framework Second-Party Opinion (2022)
Client
Bancolombia S.A.
Project Type
Sustainability Linked Bond or Note
Industry Group
Banks
Use of Proceeds
N/A
Location
Colombia
Evaluation Date
Sep 2022
Evaluation Summary
Sustainalytics is of the opinion that the Bancolombia Sustainability-Linked Financing Framework aligns with the Sustainability-Linked Bond Principles 2020. This assessment is based on the following:
Selection of Key Performance Indicators
The Bancolombia Sustainability-Linked Financing Framework includes two KPIs: (1) Number of unbanked and underserved individuals given access to credit; and (2) Financed emissions intensity (tCO2e/COP mn) (see Table 1). Sustainalytics considers the KPIs to be adequate based on materiality, relevance and scope of applicability.
Calibration of Sustainability Performance Targets
Sustainalytics considers the SPTs to be aligned with Bancolombia’s sustainability strategy. Sustainalytics further considers the SPTs to be ambitious based on past performance and peer analysis.
Bond Characteristics
Bancolombia has disclosed that the financial characteristics of the sustainability-linked debt instruments issued under the Framework will be linked to the achievement of the two SPTs. The failure to achieve the SPTs on the relevant target observation dates will trigger a step-up margin or margin adjustment payable as per the transaction documentation. The coupon will remain at its initial level if the SPTs are achieved. Sustainalytics considers these levels of disclosure to be aligned with the Sustainability-Linked Bond Principles, noting that it does not opine on the adequacy of the magnitude of the financial penalty.
Reporting
Bancolombia commits to report on an annual basis on its performance on the KPIs in its Integrated Report where sustainability performance is reported. Bancolombia commits to disclose relevant information enabling investors to monitor the level of ambition of the SPTs. The reporting commitments are aligned with the Sustainability-Linked Bond Principles 2020.
Verification
Bancolombia S.A. commits to have external limited assurance conducted against each SPT for each KPI at least once a year, which is aligned with the Sustainability-Linked Bond Principles 2020.