Project Details
Project
Metsä Group Green Finance Framework Second-Party Opinion (2024)
Client
Metsä Group
Project Type
Green Bond/Loan
Industry Group
Paper & Forestry
Use of Proceeds
Renewable energy; Energy efficiency; Pollution prevention and control; Sustainable forestry; Water/waste water management; Circular economy adapted products, production technologies and processes;
Location
Finland
Evaluation Date
Jun 2024
Evaluation Summary
USE OF PROCEEDS
The eligible categories for the use of proceeds – Renewable or Fossil Free Energy, Energy Efficiency Initiatives, Waste and Side Stream Management and Pollution Control, Sustainable Forest Management, Sustainable Water and Wastewater Management and New Circular Bioeconomy Solutions – are aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDGs 6, 7, 9, 12 and 15.
PROJECT EVALUATION AND SELECTION
Metsä Group has established a Sustainable Funding Committee which meets at least once a year and is responsible for evaluating and selecting projects in line with the eligibility criteria. The committee comprises members from Metsä Group’s management, treasury, sustainability and investment management and is chaired by the chief financial officer. Metsä Group has internal risk management policies to identify and mitigate environmental and social risks potentially associated with the eligible projects and activities. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
Metsä Group’s Treasury will be responsible for the management and allocation of proceeds and will track proceeds using a green funding register using a portfolio approach as well as a project approach. Metsä Group intends to allocate all proceeds within 36 months of issuance. Pending full allocation, proceeds will be temporarily placed in money market instruments and held as cash. Sustainalytics considers this process to be in line with market practice.
REPORTING
Metsä Group commits to report on the allocation and impact of proceeds on its annual Green Debt report until full allocation. The Group has communicated to Sustainalytics that if it obtains revolving credit facilities under the Metsä Group Green Finance Framework, it will report on allocation until loan maturity. In addition, Metsä Group intends to report on relevant impact metrics. Sustainalytics views Metsä Group’s allocation and impact reporting as aligned with market practice.