Second-Party Opinion Download

Sustainalytics is of the opinion that the Nemak S.A.B. de C.V. Sustainability-Linked Bond Framework aligns with the Sustainability-Linked Bond Principles 2020. This assessment is based on the following: 

Selection of Key Performance Indicators (KPIs) 

Nemak’s Sustainability-Linked Bond Framework includes one KPI: Absolute Scope 1 and Scope 2 Greenhouse Gas (“GHG”) Emissions (see Table 1). Sustainalytics considers the KPI chosen to be adequate given that it is relevant and material to Nemak, is a direct measure of its operational carbon performance, is calculated in line with the GHG Protocol Corporate Standard, and therefore supports benchmarking, and is applicable to approximately 30% of Nemak’s total emissions.  

Calibration of Sustainability Performance Targets (SPTs) 

Nemak has defined two SPTs in relation to its KPI. Sustainalytics considers the SPTs to be aligned with the Issuer’s sustainability strategy and further considers the SPTs to be ambitious given that they present a material improvement compared to past performance, they stand out positively within the auto parts industry, and they present a GHG reduction plan aligned with a well-below 2°C scenario.  

Bond Characteristics 

Nemak will link the bond’s financial/ structural characteristics to the achievement of at least one of the SPTs, which involves a premium payment such as, but not limited to, a step-up in the bond coupon margin upon non-achievement of one of the SPTs. The disclosures regarding bond characteristics are aligned with the SLBP. 

Reporting 

Nemak commits to report on an annual basis on its performance on the KPI in its Sustainability-Linked Instrument Report as a part of its annual sustainability reporting on its website. Nemak S.A.B. de C.V. commits to disclose relevant information that affects the KPI performance, such as (i) the performance of the KPI and progress towards the SPTs, (ii) verification assurance certificate for KPI calculation and (iii) any other relevant information enabling investors to monitor progress towards the SPTs. The reporting commitments are aligned with the SLBP.  

Verification 

Nemak commits to have external limited assurance conducted on its KPI performance, with the first verification covering 2018 to 2021 data provided before December 2022, and annually thereafter until the SPT deadline and in the event of any trigger events specified in the Bond documentation, which is aligned with market expectations.