Project Details
Project
FIRA Sustainable Bond Framework Second-Party Opinion (2024)
Client
FIRA
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Natural resources/land use management; Sustainable agriculture; Sustainable aquaculture/fisheries; Renewable energy; Water/waste water management; Energy efficiency; Climate change adaptation; SME finance and microfinance; Access to essential services; Socio-economic advancement;
Location
Mexico
Evaluation Date
Nov 2024
Evaluation Summary
Sustainalytics is of the opinion that the FIRA Sustainable Bond Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, and Social Bond Principles 2023. This assessment is based on the following:
USE OF PROCEEDS:
The eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles and Social Bond Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDGs 1, 2, 5, 6, 7, 8, 9, 10, 11, 13, 14 and 15. FIRA’s Environmental, Fishery and Value Chain Directorate will be responsible for the internal process for evaluating and selecting green projects, and the Products and Services Development and Promotion Directorate will manage the process for social projects. Both departments identify and validate eligible projects based on data extracted from FIRA’s internal database. FIRA has an environmental and social risk management system in place to address environmental and social risks associated with the projects being financed. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS:
FIRA’s Finance Directorate oversees the process for the management of proceeds. Eligible projects will be tracked using a unique identifier for each bond and managed according to an internal tracking system. FIRA intends to allocate the proceeds within 24 months of each bond issuance or as soon as reasonably possible. Pending allocation, unallocated proceeds will be temporarily invested following its internal liquidity management policy, including holding proceeds in liquid assets or bank accounts. This is in line with market practice.
REPORTING:
FIRA commits to reporting on the allocation and impact of proceeds, via an Allocation and Impact Report, on its website on an annual basis until full allocation. Allocation reporting will include the description of the financing, the amounts disbursed by eligible category, the percentage of resources allocated by eligible category and by financing and refinancing, and the remaining balance of unallocated proceeds. In addition, FIRA commits to reporting on relevant impact metrics. Sustainalytics views FIRA’s allocation and impact reporting commitment as aligned with market practice.