Project Details
Project
Paragon Green Bond Framework Second-Party Opinion
Client
Paragon
Project Type
Green Bond/Loan
Industry Group
Banks
Use of Proceeds
Green buildings
Location
U.K.
Evaluation Date
Mar 2021
Evaluation Summary
Sustainalytics is of the opinion that the Paragon Green Bond Framework is credible and impactful and aligns to the four core components of the Green Bond Principles 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible category for the use of proceeds, Green Buildings, is aligned with those recognized by the Green Bond Principles 2018. Sustainalytics considers that investments in green buildings will lead to positive environmental impacts and advance the UN Sustainable Development Goals (“SDGs”) specifically SDGs 7 and 9.
PROJECT EVALUATION/SELECTION
Paragon has established a Sustainability Committee (the “Committee”) to be responsible for the project evaluation and selection. The Committee will ensure that the loans comply with the eligibility criteria set in the Framework. The Committee meets on a quarterly basis. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
The Treasury and Structured Finance team will be responsible for the management of proceeds, following a portfolio approach. Paragon intends to reach full allocation within 24 months after issuance. Pending full allocation, unallocated proceeds will be held and/or invested in cash or other short term liquid instruments following Paragon’s liquidity policy. This is in line with market practice.
REPORTING
Paragon Banking Group intends to report on allocation of proceeds on its website, on an annual basis, until full allocation. Allocation reporting will include the bond details, the total amount of proceeds allocated, the category and number of loans, the balance of unallocated proceeds, the share of financing vs. refinancing, and the geographical distribution of assets. In addition, Paragon Banking Group is committed to reporting on relevant impact metrics, such as estimated ex-ante annual avoided emissions (tCO2/year) or estimated average annual CO2 emission intensity (kgCO2/m2/year). Sustainalytics views Paragon‘s allocation and impact reporting as aligned with market practice.