Second-Party Opinion Download

Project Details


Kvika Bank Green Financing Framework Second-Party Opinion (2021)


Kvika Bank

Project Type

Green Bond/Loan

Industry Group


Use of Proceeds




Evaluation Date

Oct 2021

Evaluation Summary

Sustainalytics is of the opinion that the Kvika Green Financing 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: 


The eligible categories for the use of proceeds – Clean Transportation, Green Buildings and Renewable Energy – are aligned with those recognized by the Green Bond Principles. Sustainalytics considers that investments in the eligible categories is expected to reduce the GHG emissions in Iceland and advance the UN Sustainable Development Goals, specifically SDGs 7 and 11. 


Kvika’s Banking Division and Kvika’s Credit Committee manage the internal process of evaluating and pre-selecting projects. Kvika’s Sustainability Committee is responsible for validating the pre-selection of eligible assets on a quarterly basis and screening Kvika’s eligible asset pool, based on the Framework’s eligibility criteria. Kvika may also appoint an external sustainability advisor for screening projects on an annual basis. Kvika has in place a policy on responsible lending and investments, which applies to allocation decisions made under the Framework. Sustainalytics considers the project selection process in line with market practice. 


Kvika will manage the net proceeds on a portfolio basis. Kvika’s Risk Management department will be responsible for documenting the process in its register, which will be reviewed by Kvika’s Sustainability Committee on a quarterly basis. Pending full allocation, unallocated proceeds will be temporarily held in a portfolio consisting of cash, cash equivalents, or other liquid marketable instruments. Kvika intends to reach full allocation within 24 months of each issuance. This is in line with market practice.


Kvika intends to report on allocation and impact of proceeds on its website on an annual basis until full allocation. Allocation reporting will include the amount allocated to eligible project categories, the balance of unallocated amounts, and the share of financing versus refinancing. Kvika also intends to report on relevant impact metrics. Sustainalytics views this to be aligned with market practice.