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
Issuer’s climate transition strategy and governance
Business model environmental materiality
Climate transition strategy to be ‘science-based’ including targets and pathways
Implementation transparency
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
500+ 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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Sustainable Finance and Banks: Reduced Risk, Increased Opportunity
Banks will play a key role in the green transition and those that commit to sustainable banking may gain an advantage over competitors, among other benefits. Indeed, banks are uniquely positioned to participate in and benefit from the transition to a green economy.
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