Knowing that your green, social or sustainability bond framework is aligned to market expectations has become a critical part of the issuance process.
That’s why the world’s leading green, social and sustainability bond issuers, including Fortune 500 companies, sovereigns, foundations and other organizations have looked to Sustainalytics as a trusted second-party opinion provider. Sustainalytics’ second-party opinion service has won multiple awards and continues to be an industry leader, having successfully completed more than 1,000 projects for issuers and their underwriters.
Learn more about Sustainalytics’ leading second-party opinion service.
Find out how the path of green finance has evolved, as well as our view on where the sustainable finance bond market is headed.
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Overview of our Second-Party Opinion Service
A second-party opinion (SPO) from Sustainalytics provides investors with assurance that the bond framework is aligned to accepted market principles (e.g. the Green Bond Principles or the Green Loan Principles) and that the proceeds of the bond or loan, as set out in the framework, are aligned to market practices and expectations from the investment community.
Our second-party opinion services can be applied to a variety of Bond & Loans categories.
Key Benefits
Enhance Awareness of Environmental or Social Issues
Issuers/borrowers can highlight their green assets or their work in addressing sustainability goals to investors and other stakeholders.
Meet Growing Investor/Lenders Demand
As the importance of sustainability grows, an increasing number of investors / borrowers are making pledges on climate action and sustainable finance.
Gain Investors’/Lenders Confidence
A Sustainalytics SPO provides additional assurance on the credibility of the issuer/borrower.
Diversify Issuer/Lender Base
The demand for thematic bonds is high and green, social and sustainability bonds tend to be oversubscribed.
Meet Market Expectations
A SPO assesses the alignment of the bond/loan framework with recognized International Capital Market Association’s (ICMA) Principles.
Use of Proceeds, Key Performance Indicators and Sustainability Performance Targets
A SPO assesses the impact of projects to be financed with the bond/ loan proceeds.
Sustainalytics SPO Plans
The green and social bonds market is growing rapidly and is constantly evolving. To make informed decisions, investors and lenders increasingly rely on ESG data and independent reports to assess a firm’s exposure to material sustainability issues and measure the impact of the investments made.
Sustainalytics can provide companies and issuers with an SPO plan that provides you with various credible independent reports to suit your ESG needs and business requirements.
In order to meet a variety of needs of the market, we offer three plans for our SPO products:
What's Included in the Plans:
| SPO Assessment Plan | Essential SPO Plan | Comprehensive SPO Plan | |
|---|---|---|---|
| Second-Party Opinion | ✔ | ✔ | ✔ |
| Annual Review | ✔ | ✔ | ✔ |
| Pre-Issuance Review | — | ✔ | ✔ |
| Pre-Issuance Impact Report | — | — | ✔ |
| Post-Issuance Impact Report | — | — | ✔ |
Learn more about Sustainalytics SPO plan.
Enhance Your Bond Framework
Annual Review
Issuers are continuously under pressure by investors and the market to ensure their bond framework is aligned well past the issuance process. With our Annual Review service, we work with issuers post issuance to ensure that the projects financed and the reporting are aligned with the intended use of proceeds and commitments set out in the bond framework.
Projects are aligned to the eligibility criterial in your framework.
You are reporting on impact metrics as outlined in your framework.
Allocation processes and reporting are as outlined in the bond framework.
Climate Bond Verification
Leading companies are examining their climate-related business risks as well as their role in climate change mitigation. Climate bonds are used to finance projects that address climate change and are aligned with achieving the goals of the Paris Agreement. As a Climate Bonds Standard Board approved external reviewer, Sustainalytics has completed more climate bond verifications than any other external reviewer in the market for 2020
Pre-issuance verification:
Verify that projects and assets are eligible under relevant sector eligibility criteria and that internal processes and controls exist to manage bond proceeds
Post-issuance verification:
Through our assessment, provides issuers with a report stating whether the bond meets the Climate Bonds Standard’s post-issuance requirements
Ongoing verification:
Issuers must annually report on their bond to comply with the Climate Bonds Standard’s post-issuance requirements to maintain a bond’s certification.
EU Taxonomy
Sustainalytics offers issuers the ability to include in its second-party Opinion an additional assessment that aligns the issuer’s bond or loan framework with the EU Taxonomy. Adding the EU Taxonomy to a second-party opinion
assures the market and investors that the bond or loan framework is aligned to the EU’s six environmental objectives, giving confidence and reputability during issuance.
Sustainalytics’ assessment considers the following general requirements for a bond framework’s alignment with the EU taxonomy:
Why Sustainalytics?
A Single Market Standard
Consistent approach to ESG assessments across the investment spectrum.
Award-Winning Research and Data
Firm recognized as Best ESG Research and Data Provider by Environmental Finance and Investment Week.
End-to-End ESG Solutions
ESG products and services that serve the entire investment value chain.
30 Years of ESG Expertise
800+ ESG research analysts across our global offices.
A Leading SPO Provider
As recognized by Environmental Finance and the Climate Bonds Initiative.
Related Insights and Resources
Risk and Opportunity in Biodiversity: How Sustainable Finance Can Help
This article outlines how biodiversity loss poses material risks to business and how it connects to many other issues that companies can’t ignore. In addition, it covers how biodiversity conservation presents substantial economic opportunities, and how businesses can address and access these opportunities by issuing linked instruments that integrate biodiversity considerations.
Today’s Sustainable Bond Market: Boosting Confidence in Sustainable Bond Issuances
In this article, we examine the kinds of sustainable bonds offered in the market, some of the key regulations being developed in different markets and the current initiatives to improve the quality and credibility of issuances.
Webinar Recap: How Integrating ESG Can Drive Opportunity for Private Companies
Recently, Morningstar Sustainalytics hosted a webinar – ESG in the Lifecycle of a Private Company: How Stakeholder Demands Drive Sustainability in Private Markets – to address some of the questions private companies might have surrounding ESG and how it could impact their business.
Related Products
Second-Party Opinions for Green and Sustainability Bonds
Instill investor confidence in environmentally- and sustainability-focused bonds with an SPO
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ESG Risk Ratings
Identify your corporate sustainability risk with ESG research and data on more than 12,000 companies.