Second-Party Opinion Download

Sustainalytics is of the opinion that the SDIC Green Finance Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2018 and Green Loan Principles 2018. This assessment is based on the following:

USE OF PROCEEDS

The eligible categories for the use of proceeds (i) Sustainable water and wastewater management and (ii) Renewable energy are aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that the eligible projects for SDIC will improve the water quality, expand efficient water use and contribute to increase renewable energy production in China and globally. Sustainalytics views that the eligible projects will advance the UN Sustainable Development Goals 6 and 7.

PROJECT EVALUATION/SELECTION

SDIC’s process for project evaluation and selection will be executed through a Green Finance Working Group. The GFWG will be responsible for implementing and governing the green finance framework (“GFF”), as well as the project selection and evaluation process. The GFWG is comprised of SDIC’s Strategy Development Department, Finance Department, Operation and Safety Department in particular Technology and Environmental Protection, as well as Rongshi International Holding Company Limited. In addition, SDIC sets up the Technology and Environmental Protection Department (“TEPD”) to ensure environmental and social policies and regulations are adhered to for eligible projects. Sustainalytics views this process aligned with market practice.

MANAGEMENT OF PROCEEDS

SDIC’s process for the management of proceeds is in line with market practices. SDIC’s green finance proceeds will be deposited in the company’s general funding accounts register and will be earmarked to Eligible Green Projects. Pending full allocation, the unallocated process will be held in accordance with SDIC’s normal liquidity management policy.

REPORTING

SDIC commits to publish an annual Green Finance Report containing the allocation reporting and the impact reporting. The allocation reporting will comprise transaction detail such as date, type, principal amount, the actual allocation of the use of proceeds to eligible projects, and the amount of unallocated proceeds. The impact reporting will include relevant key performance indicators for each Eligible Green Asset Category, such as: annual volume of sewage/wastewater collected, conveyed, treated, reused and avoided (in tonnes) or population (number of people) with access to improved sanitation facilities, and installed capacity (GW) or total energy generated in (GWh) for renewable energy projects, among other KPIs. The frequency and scope of allocation and impact reporting is in line with current market practices.