Project Details
Project
Lassila & Tikanoja Sustainability-Linked Bond Framework (2022)
Client
Lassila & Tikanoja
Project Type
Sustainability Linked Bond or Note
Industry Group
-
Use of Proceeds
-
Location
Finland
Evaluation Date
May 2022
Evaluation Summary
Sustainalytics is of the opinion that the Lassila & Tikanoja Sustainability-Linked Bond Framework aligns with the Sustainability-Linked Bond Principles 2020. This assessment is based on the following:
Selection of Key Performance Indicators
The L&T Sustainability-Linked Bond Framework includes two KPIs: (i) scopes 1 and 2 emissions intensity (km driven), and (ii) absolute scope 3 emissions (from contractor fuel consumption) (see Table 1). Sustainalytics considers the two KPIs to be strong.
Calibration of Sustainability Performance Targets
Sustainalytics considers the SPTs to be aligned with L&T’s sustainability strategy. Sustainalytics further considers the SPTs to be ambitious.
Bond Characteristics
L&T will link the bond characteristics to the achievement of the SPTs at the target observation date. Both SPTs need to be met to avoid penalty. The change in financial characteristics may include an adjustment to the bond coupon or an increased redemption price.
Reporting
L&T commits to report on its performance on the KPIs on an annual basis in its Sustainability Report or in a separate Sustainability-Linked Progress Report. L&T also commits to disclose relevant information that may affect the KPI or enable investors to monitor the progress of the selected KPIs and SPTs. The reporting commitments are aligned with the Sustainability-Linked Bond Principles.
Verification
L&T commits to having external limited assurance conducted against each SPT for each KPI at least once a year, which is aligned with market expectations.