Project Details
Project
Oncor Sustainable Financing Framework Second Party Opinion (2022)
Client
Oncor Electric Delivery Company LLC
Project Type
Sustainability Bond/Loan
Industry Group
Utilities
Use of Proceeds
Renewable energy; Green buildings; Clean transport; Energy efficiency; Climate change adaptation; Socio-economic advancement;
Location
U.S.
Evaluation Date
May 2022
Evaluation Summary
Sustainalytics is of the opinion that the Oncor Sustainable Financing Framework is credible and impactful and aligns with the Green Bond Principles 2021, Social Bond Principles 2021, Sustainability Bond Guidelines 2021, and Green Loan Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The six eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines, and the Green Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDGs 7, 9, 10, 11 and 13.
PROJECT EVALUATION / SELECTION
Oncor Electric Delivery Company LLC has established a committee (the “Committee”) which will include members from its Accounting, Business and Operations, Communications, Diversity, Equity and Inclusion, Human Resources and Corporate Affairs, Legal and Regulatory, Sustainability and Treasury teams, to evaluate and select projects per the criteria defined in the Framework. The Committee will also be responsible for ensuring that eligible projects comply with the company’s environmental and social risk management processes and policies. This is in line with market practice.
MANAGEMENT OF PROCEEDS
Oncor Electric Delivery Company LLC’s Treasury department will be responsible for the allocation and management of proceeds. The company has communicated that it intends to fully allocate proceeds within 36 months of each issuance. Unallocated proceeds may be temporarily invested in cash, cash equivalents and US government securities or used to repay existing debt that has no association with carbon-intensive activities. This is aligned with market practice.
REPORTING
Oncor Electric Delivery Company LLC intends to report on allocation of proceeds on its website on an annual basis until full allocation. The allocation reporting will include an overview of the amount allocated to eligible projects, balance of unallocated proceeds, and proportion of financing and refinancing. In addition, Oncor is committed to reporting on relevant impact metrics. Sustainalytics views Oncor’s allocation and impact reporting as aligned with market practice.