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Second-Party Opinion Download

Project Details

Project

Government of Canada Green Bond Framework Second-Party Opinion (2023)

Client

Government of Canada

Project Type

Green Bond/Loan

Industry Group

Sovereign

Use of Proceeds

Clean transport; Natural resources/land use management; Energy efficiency; Climate change adaptation; Renewable energy; Water/waste water management; Pollution prevention and control;

Location

Canada

Evaluation Date

Nov 2023

Evaluation Summary

Sustainalytics is of the opinion that the Government of Canada Green Bond Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021. This assessment is based on the following:

USE OF PROCEEDS

The eligible categories for the use of proceeds –Clean Transportation; Living Natural Resources & Land Use; Energy Efficiency; Terrestrial & Aquatic Biodiversity; Clean Energy; Climate Change Adaptation; Sustainable Water & Wastewater Management; Circular Economy Adapted Products, Production, Technologies and Processes; Pollution Prevention & Control – are aligned with those recognized by the Green Bond Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDGs 6, 7, 9, 11, 12, 13, 14 and 15.

PROJECT EVALUATION AND SELECTION

The Government of Canada’s Interdepartmental Green Bonds Committee will be responsible for identifying and evaluating eligible projects to be financed under the Framework. Canada has processes in place to identify and mitigate common environmental and social risks associated with the eligible projects. Sustainalytics considers this process to be in line with market practice.

MANAGEMENT OF PROCEEDS

The Department of Finance will oversee the allocation and ongoing monitoring of proceeds under the Framework via a virtual register. Canada intends to achieve full allocation of bond proceeds within two fiscal years following the fiscal year of each issuance. Pending full allocation, proceeds will be managed according to the Government’s cash management policy outlined in the Funds Management Governance Framework. This is in line with market practice.

REPORTING

The Government of Canada intends to report on allocation and impact of proceeds annually until full allocation on its website. Allocation reporting may include a breakdown of proceeds according to project category and type of expenditure, and the amount of unallocated proceeds. In addition, Canada is committed to reporting on relevant impact metrics. Sustainalytics views the allocation and impact reporting as aligned with market practice.

https://mstar-sustops-cdn-mainwebsite-s3.s3.amazonaws.com/docs/default-source/spos/government-of-canada-green-bond-framework-second-party-opinion-update.pdf?sfvrsn=23cb5800_1