Project Details
Project
New South Wales Green Bond Second Party Opinion
Client
New South Wales Treasury Corporation
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
Australia
Evaluation Date
Sep 2019
Evaluation Summary
Sustainalytics is of the opinion that the NSW Sustainability Bond Framework is credible, impactful and aligns with the Sustainability Bond Guidelines 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – (i) Clean Transportation, (ii) Green Buildings, (iii) Sustainable Water and Wastewater Management, (iv) Energy Efficiency and Renewable Energy, (v) Affordable Basic infrastructure, (vi) Access to Essential Services, (vii) Affordable Housing, (viii) Employment Generation, (ix) Food Security, and (x) Socioeconomic Advancement and Empowerment–are aligned with those recognized by both the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines. Sustainalytics considers that the eligible projects will lead to positive environmental and social impacts while advancing the UN Sustainable Development Goals (SDGs) 1, 2, 3, 4, 6, 7, 8, 10 and 11.
PROJECT EVALUATION/SELECTION
The Asset Identification Group (AIG), led by Treasury, will identify and assess potential eligible projects. After the initial selection, NSW Sustainability Committee (NSC) which consists of cross-functional representatives from NSW Treasury Corporation (TCorp), NSW Treasury including NSW Office of Social Impact Investment (OSII) and NSW Department of Planning, Industry and Environment, will approve the projects based on eligibility criteria. The NSC is chaired by TCorp and the projects are reviewed at least on an annual basis. Sustainalytics views NSW’s project selection and evaluation process as aligned with market practice.
MANAGEMENT OF PROCEEDS
TCorp will manage and track the net proceeds using internal reporting systems in which the proceeds of green, social and sustainability bonds will be earmarked for allocation. The unallocated proceeds will be temporarily invested in cash or cash equivalent instruments, other investment instruments with relevant restrictions, or used to temporarily reduce indebtedness of a revolving nature before being redrawn for investments or disbursements to eligible assets. This process is in line with current market practice.
REPORTING
TCorp intends to publish a “NSW Sustainability Bond Programme Annual Report” for all outstanding bonds issued under the NSW Sustainability Bond Programme. The reporting will include (i) details of the projects being financed, (ii) allocation of bond proceeds to projects financed, (iii) the expected environmental and/or social impacts, (iv) qualitative and quantitative impact performance measures of the nominated projects and assets, and (v) alignment with ICMA principles and the UN SDGs. Sustainalytics views the frequency and content of TCorp’s allocation and impact reporting as aligned with market practice.