Project Details
Project
Mega Sustainable Bond Framework Second-Party Opinion (2022) (English)
Client
Operadora de Servicios Mega S.A. de C.V. SOFOM ER
Project Type
Sustainability Bond/Loan
Industry Group
Diversified Financials
Use of Proceeds
Renewable energy; Pollution prevention and control; Sustainable agriculture; Sustainable aquaculture/fisheries; Water/waste water management;
Location
Mexico
Evaluation Date
Feb 2022
Evaluation Summary
Sustainalytics is of the opinion that the Mega Sustainable Bond Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, and Social Bond Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Employment Generation, Socioeconomic Advancement and Empowerment, Sustainable Agriculture, Sustainable Aquaculture, Sustainable Water and Wastewater Management, Renewable Energy, Pollution Prevention and Control – are aligned with those recognized by both the Green Bond Principles and Social Bond 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 SDG 2, 5, 6, 7, 8, 12 and 14.
PROJECT EVALUATION / SELECTION
Mega's Environmental and Social Committee, comprised of members from the management team and multiple departments, will meet quarterly and will be responsible for project evaluation and selection in line with Mega’s credit process, which includes an environmental and social risk assessment. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
Mega will establish a sustainable bond register, managed by the Environmental and Social Committee, through which it will track net bond proceeds. Pending allocation proceeds will be kept in cash, cash equivalents, and or in accordance with Mega's liquidity policies. Furthermore, two supervisory areas (agriculture and other industries) will verify annually the correct allocation of resources. This is in line with market practice.
REPORTING
Mega intends to publish reports on its website within a year of each green, social and/or sustainability issuance and until full allocation. The reports will contain (i) a summary of each outstanding bond; (ii) assignment of proceeds to each eligible category and, where possible, information on the project portfolio; (iii) amount used for financing or refinancing; (iv) balance of unallocated proceeds; and (v) relevant expected environmental or social impacts per eligible category. Sustainalytics views Mega's allocation and impact reporting as aligned with market practice.