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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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
Use of proceeds: Alignment of financed business activities and projects with Sustainalytics' transition eligibility criteria
Project evaluation and selection
Management of proceeds
Allocation and impact reporting
Issuer-level Considerations
Alignment of issuer's transition strategy and commitments with internationally established decarbonization pathways
Alignment of the use of proceeds with the issuer's strategy and implementation plan
Key Benefits for Issuers of Transition Bonds
Investor diversification for sectors that have been traditionally excluded from the green market but have a key role to play in addressing climate change.
Enhance visibility of your bond, company and sustainability activities.
Reinforce your sustainability strategy through commitments to investors and key stakeholders.
Increase investor dialogue and engagement that facilitates a better understanding of your business.
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.
Independent Opinion that provides additional assurance to investors.
Market positioning that can attract new types of investors.
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?
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.
25+ Years ESG Expertise
350+ ESG research analysts across our global offices.
Largest Second-Party Opinion Provider
As recognized by Environmental Finance and the Climate Bonds Initiative.
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Read how Nutrien, the world’s largest provider of crop inputs and services, used Sustainalytics' Socio-Economic Impact Report to quantify the social and economic impact of their sustainability efforts, particularly supplier diversity efforts.
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This Customer Spotlight showcases how Windstream Holdings used insights gained from Sustainalytics’ ESG Risk Ratings and ESG Performance Analytics processes to enhance its ESG profile, expand company ESG initiatives, and improve ESG reporting and disclosures in line with industry leading practices.
Sustainability-Linked Loans 2021: The COVID-19 Effect, ESG Ratings & Continued Popularity
The sustainable finance market has seen an exponential increase in size and activity in recent years. Innovative offerings such as green, social, and sustainable bonds, green and sustainability-linked loans (SLLs), and most recently sustainability-linked bonds, have contributed to the market’s incredible growth. In 2020, boosted by varied financial needs and mainstream recognition of environmental, social and governance (ESG) parameters, global sustainable debt capital surpassed US$700 billion, a 30% increase compared to 2019. Part of this capital was channelled towards tackling the effects of COVID-19 as government agencies, supranational bodies and corporates borrowed money to support areas most affected by the pandemic, such as healthcare. This shift in fund usage in 2020 resulted in the rapid growth of social bonds and a commendable first year for sustainability-linked bonds.
Tracking the Progress on Gender Equality through Sustainable Finance
A key result of achieving UN SDG 5 - Gender Equality is global economic development. However, as women globally were disproportionately impacted by the COVID-19 pandemic, the financing of activities that contribute to the empowerment and socio-economic advancement of women and girls will need to be accelerated to meet the goal by 2030. One option for creating targeted gender investment is the development and issuance of Gender Bonds that specifically support the advancement, empowerment, and equality of women.
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