Berlin Hyp Sustainability-Linked Bond Framework Second-Party Opinion (2021)
Berlin Hyp AG
Sustainability Linked Bond or Note
Use of Proceeds
Sustainalytics is of the opinion that the Berlin Hyp Sustainability-Linked Bond Framework aligns with the Sustainability-Linked Bond Principles 2020. This assessment is based on the following:
Selection of Key Performance Indicator (KPI)
Berlin Hyp Sustainability-Linked Bond Framework includes one KPI: Carbon intensity of loan portfolio (see Table 1). Sustainalytics considers the KPI chosen to be strong based on its applicability and the relevance and materiality to the subindustry.
Calibration of Sustainability Performance Target (SPT)
Sustainalytics considers the SPT to be aligned with the issuer’s sustainability strategy. Sustainalytics notes that the SPT i) goes beyond business-as-usual, ii) clearly exceeds peer performance/targets and iii) aligns with a well-below-2-degree climate scenario. As such, Sustainalytics is of the opinion that the SPT is ambitious and demonstrates industry leadership.
Berlin Hyp AG will link the bond’s financial/ structural characteristics to the achievement of the SPT, namely a step-up (or potentially a step-down) in coupon-rate. To trigger a step-up in coupon, the SPT needs to be missed.
Berlin Hyp AG commits to report on an annual basis on its performance on the KPI in its Sustainability-Linked Bond Report, which will be made available on its website. The reporting commitments are aligned with the SLBP.
Berlin Hyp AG commits to have external reasonable assurance conducted on its KPI performance throughout the term of its Sustainability-Linked Bonds and at the communicated SPT deadline, which is aligned with market expectations.