Project Details
Project
Rumo S.A. Green Bond Framework Second-Party Opinion
Client
Rumo S.A.
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
Brazil
Evaluation Date
Mar 2020
Evaluation Summary
Sustainalytics is of the opinion that the Rumo S.A 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 2018, namely Clean transport and Pollution prevention and control. Sustainalytics considers that investments in the acquisition, replacement and upgrade of rolling stock and modernization of physical infrastructure for a freight rail network which is compliant with emissions thresholds will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically Goal 9 pertaining to Industry, innovation and infrastructure.
PROJECT EVALUATION/SELECTION
The Strategic and Sustainability Committee of Rumo S.A, in coordination with their Treasury and Investor Relations, will be responsible for evaluating and selecting eligible projects. The Treasury and Investor Relation team will also ensure that the funded projects comply to the criteria established under the Rumo S.A. Green Bond Framework. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
Rumo S.A.’s Treasury department will be responsible for managing the proceeds raised under the Green Bond Framework. Rumo S.A. plans to fully allocate proceeds within 8 years after bond issuance. Until proceeds are fully allocated to eligible projects, funds will be temporarily held in liquid instruments such as cash and/or cash equivalents and/or bank deposits. This is in line with market practice.
REPORTING
Rumo commits to providing an annual report for its green bond investors, disclosing allocations at the category level as well as some impact indicators; further impact indicators will be provided in its annual sustainability report, including the fleetwide GHG emissions intensity. Both these reports will be made publicly available on its website. Sustainalytics views Rumo S.A.’s allocation and impact reporting as aligned with market practice.