Second-Party Opinion Download

Sustainalytics is of the opinion that the Mengniu Sustainable Financing Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2021, Green Loan Principles 2021, and Social Loan Principles 2021. This assessment is based on the following:  

USE OF PROCEEDS

The eligible categories for the use of proceeds –  Environmentally Sustainable Management of Living Natural Resources and Land Use, Climate Change Mitigation, Renewable Energy, Energy Efficiency, Sustainable Water and Wastewater Management, Eco-efficient and Circular Economy Adapted Products, Production Technologies and Processes, Green Buildings, Access to Low-cost High Nutrition Products, Employment Generation through SME Financing – are aligned with those recognized by 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 improve the environmental performance of the Company’s operations, contribute to providing social benefits in China and help advance the UN Sustainable Development Goals, specifically SDGs 2, 6, 7, 8, 9 and 12. 

PROJECT EVALUATION / SELECTION

China Mengniu Dairy Company Limited’s Secretary Department of Sustainable Development Executive Committee consists of Mengniu’s Corporate Affairs, Investor Relations and Finance Departments, will be responsible for evaluating and selecting eligible projects in line with the Framework’s eligibility criteria and submitting to the Sustainable Development Executive Committee for final approval. The Company will undertake an environmental and social risk assessment which is applicable to all allocation decisions made under the Framework. Sustainalytics considers the risk management system to be adequate and the process to be in line with market practice. 

MANAGEMENT OF PROCEEDS

China Mengniu Dairy Company Limited’s Finance Department will track the allocation of proceeds through a sustainable financing register. The Company intends to fully allocate the proceeds to eligible projects within two years of issuance. Pending allocation, proceeds will temporarily be invested in cash, cash equivalents or short-term liquid instruments in accordance with the Company’s corporate treasury policy. This is in line with market practice.

REPORTING

China Mengniu Dairy Company Limited intends to report on allocation of proceeds in its sustainability report on an annual basis until full allocation. Allocation reporting will include information such as the aggregate amount of proceeds allocated to eligible projects, balance of unallocated proceeds and share of financing versus refinancing. In addition, the Company is committed to reporting on relevant impact metrics. Sustainalytics views the Company’s allocation and impact reporting as aligned with market practice.