Project Details
Project
Vesteda Green Finance Framework Second-Party Opinion (2021)
Client
Vesteda
Project Type
Green Bond/Loan; EU Taxonomy Assessment;
Industry Group
-
Use of Proceeds
-
Location
Netherlands
Evaluation Date
Sep 2021
Evaluation Summary
Sustainalytics is of the opinion that the Vesteda Green Finance Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Acquisition and ownership of buildings, Renovation of existing buildings, Construction of new buildings – are aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that investments in the eligible category is expected to reduce the environmental footprint of the Netherland’s residential building stock and advance the UN Sustainable Development Goals, specifically SDGs 7 and 11.
PROJECT EVALUATION / SELECTION
Vesteda has established a Green Finance Framework Group composed of company managers to carry out the evaluation and selection process. The group will evaluate existing and potential eligible assets annually to determine whether they meet the framework criteria. Eligible assets will be added to the portfolio and on a quarterly basis a compliance report will be developed by the Treasurer and sent to Vesteda’s Risk Committee to verify compliance. Vesteda’s environmental and social policies and risk assessment processes are applicable to all allocation decisions made under the Framework. Sustainalytics considers this to be adequate and to be aligned with market practice.
MANAGEMENT OF PROCEEDS
Vesteda’s Treasurer will manage proceeds on a portfolio basis and track allocation using Vesteda’s internal tracking system. Pending full allocation of proceeds, unallocated funds will be managed according to Vesteda’s treasury criteria. Vesteda intends to reach full allocation within two years of issuance. This is in line with market practice.
REPORTING
Vesteda intends to report on allocation of proceeds on its website on an annual basis until full allocation. Allocation reporting will include breakdown of allocation to specific use of proceeds categories, the total outstanding volume of green finance instruments issued under the framework, the share of financing versus refinancing and average lookback period; and, if necessary, the total unallocated amount. In addition, Vesteda is committed to reporting on relevant impact metrics. Sustainalytics views Vesteda’s allocation and impact reporting as aligned with market practice.
Alignment with the EU Taxonomy
Sustainalytics has assessed Vesteda’s Green Finance Framework for alignment with the EU Taxonomy, and is of the opinion that, of the Framework’s three eligibility criteria (which map to three EU activities), one aligns, and two partially aligns with the applicable Technical Screening Criteria (“TSC”) in the EU Taxonomy and eight align and two partially align with the Do No Significant Harm (“DNSH”) Criteria. No categories were determined to be not aligned. 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.