Project Details
Project
Constellation Energy Green Financing Framework Second-Party Opinion (2024)
Client
Constellation Energy Corporation
Project Type
Green Bond/Loan
Industry Group
Utilities
Use of Proceeds
Renewable energy; Pollution prevention and control;
Location
U.S.
Evaluation Date
Feb 2024
Evaluation Summary
Sustainalytics is of the opinion that the Constellation Energy Green Financing Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Nuclear Power, Renewable Energy, Operational Emissions Reduction, Clean Hydrogen, Energy Storage and Clean Commercial Offerings – are aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals (SDGs), specifically SDGs 7 and 9.
PROJECT EVALUATION AND SELECTION
Constellation has established a Selection Committee which is responsible for the project evaluation and selection process in accordance with the eligibility criteria under the Framework. Constellation will follow existing internal environmental and social risk mitigation processes for all project evaluation and selection decisions made under the Framework. Sustainalytics considers this process to be in line with market practice.
MANAGEMENT OF PROCEEDS
Constellation’s Treasury team will be responsible for the management and allocation of proceeds through an internal tracking system. Constellation intends to allocate all proceeds within 24 months of issuance. Pending full allocation, proceeds will be invested in cash or cash equivalents or used to repay existing debts. This is in line with market practice.
REPORTING
Constellation commits to report on the allocation of proceeds and corresponding impact on its Investor Relations website on an annual basis until full allocation. Allocation reporting will include the amount of net proceeds allocated to the eligible projects, the amount of unallocated proceeds and the proportion of financing versus refinancing. Sustainalytics views Constellation’s allocation and impact reporting commitments as aligned with market practice.