Second-Party Opinion on Transition Bonds

Begin your sustainability journey

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Growth of sustainable finance has opened the door for companies in carbon intensive industries to contribute to the reduction of greenhouse gas emissions. Forward-looking organizations in these sectors once left out of environmental finance programs now have the opportunity to to raise capital through the issuance of transition or “brown” bonds.

Learn more about our Transition Bond service.

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Find out how the path of green finance has evolved, as well as our view on where the sustainable finance bond market is headed. 

Overview of Our Transition Bond Service

Grounded in international science-based targets – Sustainalytics’ methodology for assessing transition bond frameworks includes both issuance-level considerations and issuer-level considerations. For this, Sustainalytics developed detailed criteria for transition-eligible activities. 

Issuance-level Considerations

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Use of proceeds: Alignment of financed business activities and projects with Sustainalytics' transition eligibility criteria 

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Project evaluation and selection

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Management of proceeds 

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Allocation and impact reporting 

Issuer-level Considerations

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Issuer’s climate transition strategy and governance

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Business model environmental materiality

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Climate transition strategy to be ‘science-based’ including targets and pathways

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Implementation transparency

Key Benefits for Issuers of Transition Bonds

diversify

Investor diversification for sectors that have been traditionally excluded from the green market but have a key role to play in addressing climate change.

certificate

Enhance visibility of your bond, company and sustainability activities.

measure sustainability

Reinforce your sustainability strategy through commitments to investors and key stakeholders.

investor dialogue

Increase investor dialogue and engagement that facilitates a better understanding of your business.

Use of Proceeds Assessment Service

At Sustainalytics we also offer a Use of Proceeds (UoP) Assessment. The assessment is an evaluation of the eligibility criteria for categories of sustainable projects that issuers intend to finance through sustainable finance instruments, such as green, social, sustainability and transition bonds or loans.

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Non-public Assessment

The final report is a non-public assessment that can be used by the issuer teams for internal purposes only eg. to inform the framework development process.

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Sustainalytics’ Methodology

The final report will be an assessment in line with Sustainalytics’ Use of Proceeds Financing methodology, informed by relevant ICMA principles.

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Option to Extend

Issuers can extend the engagements to a full Second-Party Opinion within 12 months.

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No SPO Commitment Required

Issuer can sign up for UoP assessment without committing to the full SPO.

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Contract Value

The UoP Assessment is priced at a discount versus an SPO and the contract value of the UoP assessment will be available as credit if the engagement is extended to a full SPO.

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Expedited Assessment

The UoP assessment has a quick turnaround time of 2 to 3 weeks.

Advantages of Second-Party Opinions

A Second Party-Opinion of your transition bond framework ensures that your bond is in line with market expectations and industry best practices. An SPO gives investors confidence in your transition bond issuance.

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Independent Opinion that provides additional assurance to investors.

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Market positioning that can attract new types of investors. 

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Alignment with market best practices.

Our framework evaluation process is simple yet thorough. We work closely with you to understand your sustainability objectives, your projects and your processes and ensure they align with transition pathways. 

Why Sustainalytics?

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A Single Market Standard

Consistent approach to ESG assessments across the investment spectrum.

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Award-Winning Research and Data

Firm recognized as Best ESG Research and Data Provider by Environmental Finance and Investment Week.

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End-to-End ESG Solutions

ESG products and services that serve the entire investment value chain.

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30 Years of ESG Expertise

800+ ESG research analysts across our global offices.

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A Leading SPO Provider

As recognized by Environmental Finance and the Climate Bonds Initiative.

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