Project Details
Project
Landsbankinn Sustainable Finance Framework Second-Party Opinion (2021)
Client
Landsbankinn
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Renewable energy; Energy efficiency; Pollution prevention and control; Natural resources/land use management; Clean transport; Water/waste water management; Green buildings; Affordable housing; Employment generation and Socio-economic empowerment;
Location
Iceland
Evaluation Date
Jan 2021
Evaluation Summary
Sustainalytics is of the opinion that the Landsbankinn Sustainable Finance Framework is credible and impactful and aligns with the Green Bond Principles 2018, Social Bond Principles 2020, and Sustainability Bond Guidelines 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds are aligned with those recognized by both the Green Bond Principles and Social Bond Principles. Sustainalytics considers that the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDG 6, 7, 8, 9, 11, 12 and 15.
PROJECT EVALUATION / SELECTION
Landsbankinn’s internal process in evaluating and selecting projects is managed by the Sustainable Finance Committee (”SFC”). The SFC is responsible for (i) identification, evaluation, and approval of loans and investments, (ii) managing the eligible assets portfolio over the lifetime of sustainable finance instruments, (iii) monitoring prospective developments in the framework. The credit committee is responsible for final loan approval. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
Landsbankinn’s processes for management of proceeds is overseen by the SFC. Proceeds will be tracked and allocated using a portfolio approach. Should any proceeds remain unallocated, the Bank will temporarily invest the balance in line with its liquidity investment guidelines. The proceeds are expected to be allocated within 24 months of issuance. Sustainalytics considers this process to be in line with market best practice.
REPORTING
Landsbankinn intends to report allocation proceeds on its website, on an annual basis, until full allocation. The allocation reporting will include details such as an overview and value of outstanding sustainable finance instruments, the amounts allocated to projects in each category, the remaining balance of unallocated proceeds, the amount and percentage of new financing and refinancing. The allocation report will be verified by external reviewers’ post-issuance. In addition, Landsbankinn is committed to annually report on relevant impact indicators on its website and follow ICMA’s harmonized framework. Sustainalytics views Landsbankinn’s allocation and impact reporting process as aligned with market practice.