Project Details
Project
Hera Group’s Green Financing Framework Second-Party Opinion (2022)
Client
Hera Group
Project Type
Green Bond/Loan; Transition; EU Taxonomy Assessment;
Industry Group
-
Use of Proceeds
-
Location
Italy
Evaluation Date
Apr 2022
Evaluation Summary
Sustainalytics is of the opinion that the Hera Group Green Financing Framework is credible and impactful and aligns to the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Sustainable Water and Wastewater Management, Circular Economy and Pollution Prevention and Control, and Energy Efficiency and Energy Infrastructure – are aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDG 6, 7 and 9.
PROJECT EVALUATION / SELECTION
Hera’s Group CFO, the Finance Department in collaboration with the Shared Value and Sustainability Director are responsible for overseeing the evaluation and selection of eligible projects. Hera’s internal process of assessing, identifying and mitigating environmental and social risks is applicable to all allocation decisions made under the Framework. Sustainalytics considers these risk management systems to be adequate and the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
Hera Group’s Finance Department, in collaboration with the Shared Value and Sustainability Department, will monitor and track the allocation of proceeds by using an internal tracking system. Hera Group commits to fully allocate net proceeds within 24 months of issuance. Unallocated proceeds will be temporarily invested in cash or other liquid marketable instruments. This is in line with market practice.
REPORTING
Hera Group intends to report on allocation of proceeds in the Group’s Sustainability Report on an annual basis until full allocation. In addition, Hera Group is committed to reporting on relevant impact metrics. Sustainalytics views Hera Group’s allocation and impact reporting as aligned with market practice.
Alignment with the EU Taxonomy
Sustainalytics has assessed Hera Group’s Green Finance Framework with the EU Taxonomy Climate Delegated Act ((EU) 2021/2139) which supplements Regulation (EU) 2020/852, and is of the opinion that, of the Framework’s 16 eligibility criteria (which map to 16 EU activities), all align with the applicable Climate Change Mitigation Technical Screening Criteria (“TSC”) in the EU Taxonomy and the 48 sub-criteria all align with the Do No Significant Harm (“DNSH”) Criteria. Sustainalytics is also of the opinion that the activities and projects to be financed under the Framework will be carried out in alignment with the EU Taxonomy’s Minimum Safeguards.
Climate Transition Finance Handbook
Sustainalytics has evaluated Hera’s transition governance, strategy, decarbonization targets, and intentions to report on transition progress and finds the Company to be partially aligned with the recommendations of the Climate Transition Finance Handbook 2020. Hera has a strategy that outlines commitments, goals and actions on climate transition and decarbonization, and directly addresses the environmental impacts of its core business. In addition, Hera commits to disclose investments relevant to its transition strategy and the climate-related outcomes of its implementation.