Second-Party Opinion Download

Sustainalytics is of the opinion that Hera Group’s Sustainability-Linked Financing Framework aligns with the Sustainability-Linked Bond Principles 2023 and Sustainability-Linked Loan Principles 2023. This assessment is based on the following: 

Selection of Key Performance Indicators

Hera Group’s Sustainability-Linked Financing Framework includes two KPIs: i) absolute GHG emissions; and ii) quantity of recycled plastics (see Table 1). Sustainalytics considers KPI 1 as very strong and KPI 2 as strong based on both KPIs having a clear and consistent methodology, offering a direct measure of performance, with an externally recognized definition, and having a large scope of applicability. KPI 1 also lends itself well to be benchmarked against external contextual benchmarks. 

Calibration of Sustainability Performance Targets

Sustainalytics considers the SPTs to be aligned with Hera’s sustainability strategy. Sustainalytics considers the SPTs as ambitious as SPT 1.a and SPT 1.b are aligned with historical performance and a science-based decarbonization pathway, while SPTs 2.a and 2.b are significantly above historical performance. 

Bond Characteristics

Hera will link the financial characteristics of the bond or loan to the achievement of the SPTs in the form of a coupon rate step-up or a margin adjustment. Failure to achieve at least one of the SPTs will trigger a coupon step-up or margin adjustment.  

Reporting

Hera commits to report on its progress on the KPIs on an annual basis in its non-financial report, which will be available on its website. The reporting commitments are aligned with the SLBP and SLLP.  

Verification

Hera commits to have external limited assurance conducted on its KPI progress at the communicated SPT observation date, which is aligned with market expectations.