Project Details
Project
OP Financial Group Green Bond Framework Second-Party Opinion
Client
OP Financial Group
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
Finland
Evaluation Date
Nov 2018
Evaluation Summary
Sustainalytics is of the opinion that the OP Financial Group Green Bond Framework is credible and impactful, and aligns with the four core components of the Green Bond Principles 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles. Although the bond is not exclusively project-based, Sustainalytics considers the range of eligible categories to have positive environmental or social impacts and to advance the UN Sustainable Development Agenda. While a lookback period for refinancing is not disclosed, OP Financial committed to disclose the origination timeframe and maturity profile of loans in its annual reporting.
PROJECT EVALUATION/SELECTION
OP Financial’s internal process in evaluating and selecting projects is aligned with market practice, including a dedicated green bond committee, chaired by a member of the company’s executive board and comprised of senior management from corporate sustainability, finance and group treasury, and the banking, corporate and institutional customers business segment. The committee approves each loan against the framework’s eligibility criteria. OP Financial developed detailed internal guidelines for the loan selection that address environmental and social risk management. Sustainalytics considers this process to be aligned with market best practice.
MANAGEMENT OF PROCEEDS
OP Financial has committed to establishing a green bond register for each separate green bond issuance, to earmark the proceeds and track their allocation, which is aligned with market practice.
REPORTING
OP Financial intends to publish a green bond report on an annual basis, including allocation of proceeds in accordance with market standards. In addition, OP Financial intends to include information on the environmental impacts of the green bond per eligible sectors, including, kWh of renewable energy generated, tonnes of CO2 avoided, energy savings, buildings with certification, annual amount of water purified, number of public trams/ trains/ metros financed and location, among other indicators. Sustainalytics views the impact indicators as aligned with market practice.