Project Details
Project
Union Pacific Green Financing Framework Second-Party Opinion (2022)
Client
Union Pacific Corporation
Project Type
Green Bond/Loan
Industry Group
Transportation
Use of Proceeds
Renewable energy; Clean transport; Energy efficiency; Water/waste water management; Sustainable aquaculture/fisheries; Eco-efficient products;
Location
U.S.
Evaluation Date
Jul 2022
Evaluation Summary
Sustainalytics is of the opinion that the Union Pacific Green Financing Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Clean Transportation, Circular Economy Adapted Products, Production, Technologies and Processes, Energy Efficiency, Renewable Energy, Sustainable Water and Wastewater Management, Terrestrial and Aquatic Biodiversity – are aligned with those recognized by the Green Bond Principles. Sustainalytics considers that investments in the eligible categories are expected to lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDGs 6, 7, 9, 12 and 15
PROJECT EVALUATION / SELECTION
Union Pacific’s Green Finance Committee is responsible for evaluating and selecting projects. Union Pacific has an environmental and social risk assessment process in place that applies to all eligible assets. Sustainalytics considers these risk management systems to be adequate and the project evaluation and selection process to be aligned with market practice.
MANAGEMENT OF PROCEEDS
Union Pacific’s Finance Department will be responsible for the allocation and management of the bond proceeds. The department will manage and track the proceeds using internal systems. Union Pacific intends to fully allocate the proceeds to eligible assets within three years from issuance. Pending full allocation, unallocated proceeds will be temporarily managed according to Union Pacific’s normal liquidity practices. This is in line with market practice.
REPORTING
Union Pacific intends to report the allocation of proceeds on its website on an annual basis until full allocation. Allocation reporting includes information such as amount allocated to eligible assets, the balance of unallocated proceeds and the proportion of financing and refinancing. Additionally, Union Pacific is committed to reporting on relevant impact metrics. Sustainalytics views Union Pacific’s allocation and impact reporting as aligned with market practice.