Second-Party Opinion Download

Sustainalytics is of the opinion that the Shriram Transport Finance Social Finance Framework is credible and impactful, and aligns with the four core components of the Social Bond Principles 2018. This assessment is based on the following:

USE OF PROCEEDS

The eligible category for the use of proceeds – Employment generation through Micro, Small & Medium Enterprises (“MSME”) financing and microfinance – is aligned with those recognized by the Social Bond Principles 2018. Sustainalytics considers that the Eligible Assets will provide positive social impacts by improving financial access for the underbanked MSMEs that are unable to access conventional financial services due to their poor credit ratings or lack of stable income. They will also support the advancement of the UN Sustainable Development Goals, specifically Goals 8 and 10.

PROJECT EVALUATION/SELECTION

Shriram Transport Finance has established a Sustainable Financing Working Group, chaired by Treasury and consisting of representatives from the Treasury Department, Corporate Social Responsibility Department, Transport Planning Department, and Business Operation Department. The working group, among other tasks, oversees the review, selection, and validation of Eligible Social Assets based on the stated criteria in the Social Finance Framework. Sustainalytics views Shriram’s project evaluation and selection as in line with market practice.

MANAGEMENT OF PROCEEDS

Shriram Transport Finance’s processes will be managed by the Sustainable Financing Working Group based on a portfolio approach. Eligible projects will be allocated to the Eligible Social Portfolio. Proceeds will be tracked and recorded through the internal monitoring system. Pending full allocation, unallocated proceeds will be deployed in cash or cash equivalent instruments, in accordance with the Company’s investments and treasury policy. Sustainalytics views Shriram’s management of proceeds as aligned with market practice.

REPORTING

Shriram Transport Finance intends to report on its website, within one year from the issuance and annually thereafter until full allocation, the allocation of net proceeds and associated impact metrics in its allocation and impact reporting. Allocation reporting will include (i) the amount or percentage of allocation to the Eligible Social Portfolio, (ii) percentage of net proceeds allocated to financing new and existing projects, (iii) examples of projects being financed, and (iv) balance of unallocated proceeds. Impact reporting will report on relevant social impact indicators. Sustainalytics views Shriram’s proposed allocation and impact reporting as aligned with market practice.