Project Details
Project
Legrand Sustainability-Linked Financing Framework Second-Party Opinion (2023)
Client
Legrand SA
Project Type
Sustainability Linked Bond or Note; Sustainability Linked Loan;
Industry Group
Electrical Equipment
Use of Proceeds
N/A
Location
France
Evaluation Date
May 2023
Evaluation Summary
Selection of Key Performance Indicators
The Legrand Sustainability-Linked Financing Framework includes four KPIs: i) Absolute scope 1 and 2 GHG emissions; ii) Absolute scope 3 GHG emissions; iii) Key suppliers’ engagement on GHG emissions reduction; and iv) Women representation in managerial positions (see Table 1). Sustainalytics considers KPI 1 and KPI 2 to be very strong, KPI 3 to be adequate and KPI 4 to be strong based on the KPIs’ materiality, relevance, scope of applicability and comparability to external benchmarks.
Calibration of Sustainability Performance Targets
Sustainalytics considers the SPTs to be aligned with Legrand’s sustainability strategy. Sustainalytics further considers SPT 1 to be highly ambitious, SPT 2 to be ambitious, and SPT 3a, SPT 3b and SPT 4 to be moderately ambitious based on historical performance, peer performance and alignment with science-based trajectories.
Bond Characteristics
Legrand will link the financial characteristics of the bonds to its performance on the KPIs and SPTs. A coupon step-up will be triggered depending on Legrand’s performance against the SPTs on the specified target observation date. This is aligned with the Sustainability-Linked Bond Principles 2020.
Reporting
Legrand commits to report on an annual basis on its performance on the KPIs in its sustainability performance report published on its website. Legrand further commits to disclose relevant information to enable investors to monitor the SPTs’ level of ambition and the factors that affect KPI performance, including reassessments of KPIs due to changes in methodology, baselines or scope. The reporting commitments are aligned with the Sustainability-Linked Bond Principles 2020.
Verification
Legrand commits to have external limited assurance conducted against each SPT for each KPI annually, which is aligned with the Sustainability-Linked Bond Principles 2020.