Second-Party Opinion Download

Sustainalytics is of the opinion that the Hitatchi Capital (UK) Green Financing Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2018 and the Green Loan Principles 2020. This assessment is based on the following:

USE OF PROCEEDS

The eligible categories for the use of proceeds – Clean Transportation and Renewable Energy – is aligned with those recognized by the Green Bond Principles 2018 and the Green Loan Principles 2020. Sustainalytics considers that investments in projects in the eligible category will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDGs 7 and 11.

PROJECT EVALUATION/SELECTION

HCUK’s CSR Committee will be responsible for identifying eligible projects while its operation and asset management groups will be responsible for identifying eligible expenditures pertaining to upgrades and maintenance of assets. Final project selection will be made by HCUK’s CSR Committee. Sustainalytics considers the project selection process to be in line with market practice.

MANAGEMENT OF PROCEEDS

Proceeds raised under the Framework will be deposited to HCUK’s operating account monitored by HCUK’s Global Treasury team and reported to the CSR Committee. Unallocated proceeds will be held in cash reserves or used for repayment of debt. HCUK commits to allocating proceeds within 24 months of any issuance. Sustainalytics considers the management of proceeds process to be in line with market practice.

REPORTING

HCUK intends to report on its website on an annual basis. Allocation reporting will include a list of eligible projects, amount of proceeds allocated by project category, and the balance of any unallocated proceeds. Impact reporting will include metrics such as installed net renewable energy capacity (MW), renewable energy production (MWh) and expected GHG reduced (tonnes of CO₂ emissions). Sustainalytics views HCUK’s allocation and impact reporting as aligned with market practice.

Alignment with the EU Taxonomy

Sustainalytics has assessed HCUK’s Green Financing Framework for alignment with the EU Taxonomy and is of the opinion that, of the Framework’s two eligibility categories (which map to five EU activities), both align with the applicable Technical Screening Criteria (“TSC”) in the EU Taxonomy and partially align with the Do No Significant Harm (“DNSH”) Criteria. No categories were determined to be not aligned. 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.