IIFL Home Finance Limited Sustainable Finance Framework Second-Party Opinion (2022)
IIFL Home Finance Limited
Use of Proceeds
Affordable housing; Green buildings; SME finance and microfinance;
Sustainalytics is of the opinion that the IIFL HFL Sustainable Finance Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2021, Green Loan Principles 2021, and Social Loan Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Green Buildings, Affordable Housing, and Small, Medium and Micro Enterprises Lending – are aligned with those recognized by the Green Bond Principles, Social Bond Principles, Green Loan Principles, and Social Loan 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 5, 9 and 11.
PROJECT EVALUATION / SELECTION
IIFL Home Finance Limited will form a Sustainable Finance Working Group (SFWG) that will be responsible for projects selection and evaluation. The SFWG will consist of senior representatives from the compliance, ESG, risk and technical departments. The Issuer has internal screening and due diligence processes to identify and manage environmental and social risks associated with assets financed, which are applicable to all allocation decisions made under the Framework. Sustainalytics considers the risk management processes to be adequate and the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
IIFL Home Finance Limited will create a Sustainable Project Portfolio to manage the proceeds using a portfolio approach. IIFL Home Finance Limited’s treasury team will be responsible for managing the allocation of proceeds. An internal e-register will track the use of proceeds. Unallocated proceeds will be invested in line with IIFL Home Finance Limited’s internal policy of liquidity management. This is in line with market practice.
IIFL Home Finance Limited intends to publicly report on the allocation and impact on its sustainability report on an annual basis until full allocation. Allocation reporting will include the eligible projects included in the portfolio, the balance of unallocated balance and the proportion of financing versus refinancing. In addition, IIFL Home Finance Limited is committed to reporting on relevant impact metrics. Sustainalytics views IIFL Home Finance Limited’s allocation and impact reporting as aligned with market practice.