Project Details
Project
UMH Properties Inc. Sustainable Bond Framework Second Party Opinion (2022)
Client
UMH Properties Inc.
Project Type
Sustainability Bond/Loan
Industry Group
Real Estate
Use of Proceeds
Energy efficiency; Water/waste water management; Access to essential services; Affordable housing;
Location
U.S.
Evaluation Date
Mar 2022
Evaluation Summary
Sustainalytics is of the opinion that the UMH Properties Inc. Sustainable Bond Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, and Social Bond Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Affordable Housing, Access to Essential Services, Sustainable Water and Wastewater Management, and Energy Efficiency – are aligned with those recognized by the Green Bond Principles and the Social Bond Principles. Sustainalytics considers that investments in the eligible categories are expected to lead to positive environmental and social impacts and advance the UN Sustainable Development Goals, specifically SDGs 6, 7, 8 and 11.
PROJECT EVALUATION / SELECTION
UMH Properties Inc.’s Sustainability Bond Committee, comprising of its Director of ESG and an independent board member, along with its legal and management teams, will oversee the identification and selection of the eligible projects. While UMH Properties Inc. has adopted internal processes to comply with the regional environmental and social regulations, it lacks adequate systems and processes to manage some of the identified risks, which is a deviation from market expectations.
MANAGEMENT OF PROCEEDS
UMH Properties Inc.’s Sustainability Bond Committee will be responsible for the management and tracking of bond proceeds. UMH intends to achieve full allocation of bond proceeds within 36 months of each issuance. Unallocated proceeds may be temporarily used to refinance existing debt and preferred stocks or invested per UMH Properties Inc.’s cash investment policy. This is in line with market practice.
REPORTING
UMH intends to report on the allocation of proceeds until full allocation as part of its annual ESG reports published on its website. The allocation reporting will include details on the allocation of proceeds, and the balance of unallocated proceeds. In addition, UMH Properties Inc. intends to report on qualitative and quantitative impacts and has provided indicative metrics in the Framework. Sustainalytics views UMH’s allocation and impact reporting as aligned with market practice.