Project Details
Project
Link REIT Green Bond Framework Update Second-Party Opinion
Client
Link REIT
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
Hong Kong
Evaluation Date
Mar 2019
Evaluation Summary
Sustainalytics is of the opinion that Link REIT Green Finance Framework is credible and impactful, and aligns with the four core components of the Green Bond Principles 2018 and the Green Loan Principles 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds, (i) Green Buildings, (ii) Energy Efficiency, (iii) Pollution Prevention and Control, (iv) Sustainable Water and Wastewater Management, (v) Clean Transportation, (vi) Renewable Energy, are aligned with those recognized by the Green Bond Principles 2018 and the Green Loan Principles 2018. Sustainalytics considers that the Eligible Green Projects will contribute to decrease Hong Kong’s environmental footprint and advance various UN Sustainable Development Goals.
PROJECT EVALUATION/SELECTION
Eligible Green Projects are to be selected through the joint-collaboration of Link REIT’s sustainability and treasury teams based on the Eligibility Criteria.
MANAGEMENT OF PROCEEDS
Link REIT commits to record internally the allocation of the net proceeds to existing and future eligible green projects. Pending full allocation, the unallocated proceeds will be used to repay the outstanding debt or held in cash, in line with the cash management practices for REITs. This process is aligned with market practice.
REPORTING
Link REIT commits to provide an annual allocation report which will include a list of eligible green project categories and amounts allocated to these categories, the balance of unallocated proceeds and a selection of project examples. Where feasible, Link REIT will provide qualitative and quantitative environmental performance indicators for the Eligible Green Projects, including a list of eligible buildings that received third party verified green building certification, the energy consumption reduced per square foot, the greenhouse gas emissions reduced by an eligible green project, the water consumption reduced and the reduction in the amount of waste sent to landfill. Sustainalytics views the scope and granularity of Link REIT’s proposed reporting as comprehensive, but strongly encourages the company to provide impact reporting on a regular basis.