Project Details
Project
Sovereign Sustainable Finance Framework Second-Party Opinion (2023)
Client
Sovereign Network Group
Project Type
Sustainability Bond/Loan
Industry Group
Other
Use of Proceeds
Green buildings; Energy efficiency; Renewable energy; Clean transport; Affordable housing; Access to essential services;
Location
U.K.
Evaluation Date
Nov 2023
Evaluation Summary
Sustainalytics is of the opinion that the Sovereign Sustainable Finance Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2023, Green Loan Principles 2023 and Social Loan Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds, Green Buildings, Energy Efficiency, Renewable Energy, Clean Transportation, Terrestrial and Aquatic Biodiversity, Affordable Housing and Access to Essential Services are aligned with those recognized by the Green Bond Principles, Social Bond Principles, Green Loan Principles, and Social Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDGs 7, 8, 9, 10, 11 and 15.
PROJECT EVALUATION AND SELECTION
Sovereign’s Group Investment and Major Project committees will oversee the internal process for evaluating and selecting projects. The committees are composed of members of Sovereign’s executive team and board and oversee Sovereign’s environmental and social risk management processes for all allocations under the Framework. Sovereign’s ESG Team oversees the implementation and management of the Framework. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
Sovereign will use its Sustainable Finance Asset Register to track all projects, investments and expenditures into eligible projects, as approved by the committees and the ESG Team. Unallocated gross proceeds will be managed in accordance with Sovereign’s treasury management policy. This is in line with market practice.
REPORTING
Sovereign commits to report annually on allocation of proceeds until full allocation. The report will detail total proceeds allocated to each eligible project category, a breakdown of proceeds allocated to new and existing projects, the share of financing versus refinancing, and the balance of unallocated proceeds. In addition, Sovereign intends to report on relevant impact metrics. Both the allocation and impact reports are expected to be available on Sovereign’s website. Sustainalytics considers the allocation and impact reporting as aligned with market practice.