Project Details
Project
Orbit Group Sustainable Finance Framework Second-Party Opinion (2023)
Client
Orbit Group
Project Type
Sustainability Bond/Loan
Industry Group
Other
Use of Proceeds
Energy efficiency; Green buildings; Natural resources/land use management; Affordable housing; Socio-economic advancement; Access to essential services;
Location
U.K.
Evaluation Date
Jan 2023
Evaluation Summary
Sustainalytics is of the opinion that the Orbit Sustainable Finance Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2021, Green Loan Principles 2021 and Social Loan Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds- Energy Efficiency, Green Buildings, Environmentally Sustainable Management of Living Natural Resources and Land Use, Affordable Housing, Socioeconomic Advancement and Empowerment and Access to Essential Services are aligned with those recognized by the Green Bond Principles and Social Bond Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental or social impact and advance the UN Sustainable Development Goals, specifically SDGs 7, 8, 9, 10, 11 and 15.
PROJECT EVALUATION AND SELECTION
Orbit Group’s Sustainable Finance Framework Steering Panel (SFFSP) will evaluate, select, monitor and approve eligible assets against the Framework criteria. Orbit’s environmental, social and ethical risk assessment process applies to all project selection decisions. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
Orbit Group’s SFFSP will be responsible for the management and allocation of proceeds to eligible assets and will track the proceeds through a Sustainability Financing Register to determine an eligible portfolio. The proceeds of each transaction instrument will be earmarked according to the pool of eligible projects and expenditures identified in the sustainability financing register. At the end of each financial year the net proceeds will be reduced by the amounts invested in eligible projects in the same period. Pending allocation, unallocated proceeds will be invested in cash deposits, sterling denominated money market funds, or redemption of short-term debt. This is in line with market practice.
REPORTING
Orbit Group intends to report on the allocation of proceeds and corresponding impact, which will be published in its ESG report on an annual basis. Allocation reporting will include the total amount of proceeds allocated to each category, the amount of proceeds allocated by project category per sustainable financing instrument, the balance of unallocated proceeds, and the proportion of refinancing compared to new financing in the allocations. For impact reporting, Orbit Group will leverage metrics from the Sustainability Reporting Standard for Social Housing of the UK ESG Social Housing Working Group. Sustainalytics views Orbit Group’s allocation and impact reporting as aligned with market practice.