Project Details
Project
Kyushu Railway Company Green Bond Second-Party Opinion
Client
Kyushu Railway Company
Project Type
Green Bond/Loan
Industry Group
Transportation
Use of Proceeds
Clean transport; Green buildings;
Location
Japan
Evaluation Date
Feb 2021
Evaluation Summary
Sustainalytics is of the opinion that the Kyushu Railway Company (hereinafter referred to as “JR Kyushu” or the “Company”) Green Bond Framework (The “Framework”) is credible and impactful and aligns to the four core components of the Green Bond Principles 2018 (GBP). This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds Clean Transportation and Green Buildings, are aligned with those recognized by the GBP. Sustainalytics considers that the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDGs 9 and 11.
PROJECT EVALUATION/SELECTION
The Finance Department of JR Kyushu evaluates and selects candidate projects based on eligibility criteria for use of proceeds, and the Company’s executive officer and general manager of the Finance and Accounting Department will make the final decision. Sustainalytics considers this process of JR Kyushu to be aligned with market practice.
MANAGEMENT OF PROCEEDS
The Finance Department of JR Kyushu will track and manage the allocation of the proceeds for each eligible project quarterly using an internal accounting system. Until the proceeds of the green bond are fully allocated to the eligible projects, the unallocated proceeds will be held in cash or cash equivalents. JR Kyushu’s proceeds management process is aligned with market practice.
REPORTING
JR Kyushu intends to report on allocation and environmental impacts of the proceeds annually on the Company’s website. Allocation reporting will disclose the overview of eligible projects, amount of allocated and unallocated proceeds, expected timing of allocation and ratio of new finance and refinance. Impact reporting will include annual reduction in CO2 emissions by introducing new-model train cars, progress of implementation of disaster prevention work, progress of green building certification acquisition and other relevant qualitative and quantitative impact metrics. Sustainalytics views the allocation and impact reporting of JR Kyushu as aligned with market practice.