Sparebanken Sør Green and Sustainability Bond Framework Second Party Opinion (2022)
Sustainalytics is of the opinion that the Sparebanken Sør Green & Sustainability Bond Framework is credible and impactful, and aligns with the four core components of the Sustainability Bond Guidelines 2021, Green Bond Principles 2021 and the Social Bond Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Green Buildings and Access to Essential Services – are aligned with those recognized by the Green Bond Principles and the Social Bond Principles. Sustainalytics considers that mortgages for energy-efficient properties and lending to green buildings projects and essential service providers are expected to lead to positive environmental and social impacts, and help advance the UN Sustainable Development Goals, in particular SDGs 3, 4 and 11.
PROJECT EVALUATION / SELECTION
Sparebanken Sør’s Green and Sustainability Bond Committee will be responsible for evaluating and selecting projects in line with the eligibility criteria under the Framework. The committee comprises representatives from the Bank’s Group Sustainability, Group Treasury and Corporate Management teams, Sparebanken Sør Boligkreditt, and other applicable business units. Sparebanken Sør’s risk management measures apply to all allocation decisions. Sustainalytics considers this process to be in line with market practice.
MANAGEMENT OF PROCEEDS
Sparebanken Sør’s Green Bond Committee will be responsible for management and allocation of proceeds, and will track the use of proceeds through a register. The Bank will use a portfolio approach to manage the proceeds of its bonds, and any unallocated proceeds will be held or invested in money market instruments within 24 months of allocation, in line with market practice.
The Bank will provide annual impact and quarterly allocation reporting until the bonds’ proceeds are fully allocated, including relevant quantitative metrics such as greenhouse gas emissions avoided and the number of healthcare or educational units and projects supported. Sustainalytics views the allocation and impact reporting as aligned with market practice.
Alignment with the EU Taxonomy
Sustainalytics has assessed the Sparebanken Sør Green & Sustainability Bond Framework for alignment with the EU Taxonomy, and is of the opinion that the Framework’s green eligibility category (which maps to one EU activity) aligns with the applicable technical screening criteria (TSC) in the EU Taxonomy, and aligns with the do no significant harm (DNSH) criteria. Sustainalytics is also of the opinion that the activities and projects to be financed under the Framework will be carried out in alignment with the EU Taxonomy’s minimum safeguards.