Wells Fargo Sustainability Bond Framework Second-Party Opinion
Wells Fargo & Company
Use of Proceeds
Renewable energy; Green buildings; Clean transport; Energy efficiency; Affordable housing; Education; Health; SME finance and microfinance;
Sustainalytics is of the opinion that the Wells Fargo Sustainability Bond Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2018, Green Bond Principles 2018, and Social Bond Principles 2020. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Clean Transportation, Energy Efficiency, Renewable Energy, Green Buildings, Housing Affordability, Education, Healthcare, Essential Services, and Socioeconomic Advancement and Empowerment – are aligned with those recognized by both the Green Bond Principles and Social Bond Principles. Sustainalytics considers that providing financing in relation to the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals (“SDGs”), specifically SDGs 1, 3, 4, 7, 8, 9, and 11.
PROJECT EVALUATION / SELECTION
Wells Fargo & Company’s Sustainability Bond Council (the “Council”) will be responsible for project selection and evaluation. The projects, selected based on the criteria defined in the Framework and their compliance with the Wells Fargo & Company’s Environmental and Social Risk policy, are reviewed by the Council on an ad-hoc basis. Sustainalytics considers the project selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
The Council will be responsible for supervising the Eligible Bond Portfolio (the “Portfolio”), allocating net proceeds, and for ensuring the project’s eligibility. The eligible projects will be tracked as per Wells Fargo & Company’s sustainability bond tracking methodology. Wells Fargo & Company intends to fully allocate an amount equal to the proceeds raised within 24 months from the date of bond issuance and hold the unallocated proceeds in cash, cash equivalents and/or other liquid marketable instruments in its liquidity portfolio until full allocation. This is in line with market practice.
Wells Fargo & Company intends to publish a sustainability bond report on its website within a year of bond issuance, until full allocation. The allocation reporting and the impact reporting will be based on category-level indicators. Sustainalytics views Wells Fargo & Company’s allocation and impact reporting as aligned with market practice.