RBC Green Bond Framework Second-Party Opinion
Royal Bank of Canada
Use of Proceeds
Sustainalytics is of the opinion that the RBC 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 seven eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles. Sustainalytics considers that loans to finance projects related to renewable energy, energy efficiency, pollution prevention and control, sustainable resource management and land use, clean transportation, sustainable water and wastewater management, and green buildings will lead to positive environmental impacts and advance the UN Sustainable Development Goals.
RBC has established a Green Bond Working Group to oversee the RBC green bond programme, which will include senior representatives from a variety of departments, including Corporate Treasury, Sustainable Finance, Environmental Affairs, and Corporate Banking. The Group will review the eligible portfolio on at least a quarterly basis. In addition, the Bank is a signatory to the Equator Principles. This is in line with market best practice.
MANAGEMENT OF PROCEEDS
RBC will tag eligible assets in its existing global credit management system. The Green Bond Working Group will ensure that the portfolio balance meets or exceeds the amount of outstanding green bonds. Unallocated proceeds will be held in money market instruments, as part of the Bank’s liquidity portfolio. This is in line with market practice.
RBC will report annually, on any outstanding green bonds, information regarding allocation and impacts. Allocation information will include amounts aggregated at the category level, while impact reporting will include key performance indicators at the category level. In Sustainalytics’ view, reporting on these metrics is in line with market practice.