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Second-Party Opinion Download

Project Details


ESM Social Bond Framework Second-Party Opinion



Project Type

Social Bond/Loan

Industry Group


Use of Proceeds




Evaluation Date

Jun 2020

Evaluation Summary

Sustainalytics is of the opinion that the ESM Social Bond Framework aligns with the four core components of the Social Bond Principles 2020. This assessment is based on the following:


The eligible category for the use of proceeds – Pandemic Crisis Support (“PCS”) – is aligned with those recognized by the Social Bond Principles that seek to achieve positive socioeconomic outcomes for target populations. Sustainalytics considers that the eligible category will lead to positive social impacts and advance the UN Sustainable Development Goals, specifically SDG 3.


The Pandemic Crisis Support is available to all ESM Member States upon request. Once the Member requests the draw-down of funds, the ESM for funding purposes will identify the expenditures which qualify as Eligible Social Expenditures based on the eligibility criteria outlined in the Framework. Sustainalytics considers the project selection process in line with market best practice.


The management of proceeds process will be handled by the Asset Liability Management Financial Structuring division and may involve different divisions, such as Funding and Investor Relations. The net proceeds will be pooled and allocated on a portfolio basis to fund the loans drawn down by ESM Members under the ESM PCS. The ESM will collaborate with the European Commission on the monitoring of the use of funds, based on regular reporting by the Beneficiary Member State. Pending allocation, the proceeds will remain in the ESM’s treasury accounts and be invested according to the ESM investment guidelines. This is in line with market practice.


ESM will report on the allocation of proceeds publicly and annually on its website, until full allocation. The allocation of proceeds will include the total amount of expenditures funded through the issuances, a breakdown of such expenditure per country and by category, as well as publicly available information about Beneficiary Member State’s eligible social expenditures. ESM is committed to reporting on the impact of the proceeds raised by the Social Bonds, publicly and annually. Based on these elements, Sustainalytics considers this process to be in line with market practice.