Project Details
Project
NOVO Energy Green Finance Framework Second-Party Opinion (2023)
Client
NOVO Energy Production AB
Project Type
Green Bond/Loan
Industry Group
Transportation
Use of Proceeds
Clean transport
Location
Sweden
Evaluation Date
Mar 2023
Evaluation Summary
Sustainalytics is of the opinion that the NOVO Energy Green Finance Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
The eligible category for the use of proceeds, Clean Transportation, is aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that investments in the eligible category will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDG 9.
PROJECT EVALUATION AND SELECTION
NOVO Energy’s Green Finance Committee will evaluate and select eligible projects in line with the eligibility criteria. NOVO Energy applies its internal environmental and social risk management system to assess and manage risks associated with eligible projects and assets. Sustainalytics considers the project selection process and the risk management systems to be in line with market practice.
MANAGEMENT OF PROCEEDS
NOVO Energy’s Green Finance Committee will be responsible for the management and allocation of proceeds to eligible projects. The proceeds will be tracked through NOVO Energy’s internal reporting system. NOVO Energy intends to reach full allocation within 36 months from issuance. Pending full allocation, unallocated proceeds will be temporarily held in NOVO Energy’s treasury liquidity portfolio, in cash or other short-term and liquid instruments. This is in line with market practice.
REPORTING
NOVO Energy intends to report on the allocation of proceeds in annual updates of green finance instruments until full allocation. The reporting will be available to private lenders or published on the Company’s website if NOVO Energy issues public instruments. Allocation reporting will include the size of the identified green project portfolio, the allocated and unallocated proceeds, the share of financing versus refinancing and the proportion of the portfolio that is aligned with the EU Taxonomy Climate Delegated Act. In addition, NOVO Energy is committed to reporting on relevant impact metrics. Sustainalytics views NOVO Energy’s allocation and impact reporting as aligned with market practice.