Second opinion

Green Bond Second Opinion

RAEX-Europe’s Green Bond Second Opinion is an independent opinion focused on assessing how the framework of the green bond issued complies with the Green Bond Principles*. It also assesses what is the issuer’s environmental performance related to the eligible projects and what is the environmental impact of these projects.

First of all, we analyse how the issuer plans to use the proceeds from the issuance, how is the project selection and evaluation process performed, what is the issuer’s proposal to manage the proceeds and how does it plan to report the allocation of funds. This analysis reassures investors that the green bond being issued complies with all the requirements set in place in the Green Bond Principles. Besides this, we go beyond by assessing the environmental performance and impact of the project. To assess the performance we first determine the company’s general commitment to sustainability. We then identify the risk exposures of the eligible projects and detect which policies and processes the company has in place to mitigate them and whether or not these policies and processes are adequate from our point of view. In order to assess the impact, we define the industry and regional status quo and analyse how the eligible projects in which the bond proceeds will be invested change this status quo in a positive way.

We believe that the Green Bond Second Opinion should not only assess the compliance of the framework with the Green Bond Principles, but should also explain what are the risk exposures which can have a material impact for the company and how these risks exposures are planning to be managed. On the same line, it is vital that we show in our assessment whether or not there is a clear improvement of the current state of the green economy.

Our analysis is a tailor-made approach in accordance with the following guidelines:

• Alignment with the Green Bond Principles
  • Comparison of the Green Bond Principles and the entity’s green bond framework
• Environmental performance
  • Assessment of the issuer’s commitment with sustainability
  • Analysis of risks exposures and mitigation 
    • Identification of risk exposures which may arise from the eligible projects
    • Identification of policies and procedures which mitigate these risks
• Impact of proceeds from the Green Bond issuance
  • Definition of the system’s status quo and analysis of if and how the eligible projects can impact the environment it in a positive and sustained manner
• Alignment of the eligible projects with the Sustainable Development Goals (SDG)**
  • Assess whether or not the eligible projects correspond to one or more SDGs

* Unter the following link you can find the latest version of the Green Bond Principles:

• Green Bond Principles Green Bond Principles 2018

** Sustainable Development Goals

Social Bond Second Opinion

RAEX-Europe’s Social Bond Second Opinion is an independent opinion focused on assessing how the framework of the social bond issued complies with the Social Bond Principles* prepared by the entity issuing the notes. It also assesses the issuer’s social performance related to the eligible projects and the social impact of these projects, as well as the overall sustainability commitment of the entity.

First of all, we analyse how the issuer plans to use the proceeds from the issuance, how the project selection and evaluation processes are performed, what the issuer's proposal to manage the proceeds is and how it plans to report the allocation of funds. This analysis reassures investors that the social bond being issued complies with all the requirements set in place in the Social Bond Principles.

Besides this, we go beyond by assessing the social performance and impact of the project. To assess the performance we first determine the company’s general commitment to sustainability. We then identify the risk exposures of the eligible projects and detect which policies and processes the company has in place to mitigate them and whether or not these policies and processes are adequate from our point of view. In order to assess the impact, we define the target populations/sector and regional status quo and analyse how the eligible projects in which the bond proceeds will be invested change this status quo in a positive way. One of the main objectives for us is to observe a forward looking approach in terms of improving the current state of the target population.

We believe that the Social Bonds Second Opinion should not only assess the compliance of the framework with the Social Bond Principles, but should also explain the risk exposures which can have a material impact for the company and how these risk exposures are planning to be managed.

Our analysis is a tailor-made approach in accordance with the following guidelines:

• Alignment with Green Bond Principles
   
  • Comparison of the Green Bond Principles and the entity’s green bond framework

• Introduction
   
  • Company description and background

• Alignment with the social bond principles
   
  • Comparison of the social bond principles and the entity’s social bond framework

• Sustainability performance
   
  • Analysis of the company’s commitment with sustainability

• Risk exposure and mitigation
   
  • Identify risk exposures which may arise from the eligible projects
  
  
  • Identify policies and procedures to mitigate these risks

• Impact of proceeds
   
  • Understand the status quo of the system and analyse if and how the eligible projects can impact it in a positive way. The assessment of the long-term support of the project to improve the state of the target populations is a key goal.
     
    • Target populations/sector status quo and impact
    
    
    • Region status quo and impact

• Alignment of the eligible projects with the Sustainable Development Goals (SDG)**
   
  • Assess whether or not the eligible projects/activities are in line with any of the SDGs
  
  
  • Identify which SDGS are being covered

* Under the following link you can find the latest version of the Social Bond Principles Social Bond Principles 2018.

** Sustainable Development Goals

Sustainability Bond Second Opinion

RAEX-Europe’s Sustainability Bond Second Opinion is an independent opinion focused on assessing how the framework of the Sustainability bond issued complies with the Sustainability Bond Guidelines* which is a combination of the Green Bond Principles* and/or the Social Bond Principles* (depending on the goals for the use of proceeds) prepared by the entity issuing the notes. Sustainability bonds are different from green and social bonds as the proceeds will be exclusively applied to finance or re-finance a combination of both green and social projects. Our second opinion also assesses the issuer’s Sustainability performance related to the eligible projects and the green and/or social impact of these projects, as well as the overall sustainability commitment of the entity.

First of all, we analyse how the issuer plans to use the proceeds from the issuance, how the project selection and evaluation processes are performed, what the issuer's proposal to manage the proceeds is and how it plans to report the allocation of funds. This analysis reassures investors that the sustainability bond being issued complies with all the requirements set in place in the Green Bond Principles and/or the Social Bond Principles.

Besides this, we go beyond by assessing the Sustainability performance and impact of the project. To assess the performance we first determine the company’s general commitment to sustainability.

We then identify the risk exposures of the eligible projects and detect which policies and processes the company has in place to mitigate them and whether or not these policies and processes are adequate from our point of view.

In order to assess the impact, we define the target populations, industry and/or regional status quo. This analysis will depend on the whether the extent of relevant green projects and social projects the proceeds bond is planning to finance. We then analyse how the eligible projects in which the bond proceeds will be invested change this status quo in a positive way. One of the main objectives for us is to use a forward-looking approach in terms of improving the current state of the target population, the industry and/or the region.

We believe that the Sustainability Bonds Second Opinion should not only assess the compliance of the framework with the Green Bond Principles and/or the Social Bond Principles, but should also explain the risk exposures which can have a material impact for the company and how these risk exposures are planning to be managed.

Our analysis is a tailor-made approach in accordance with the following guidelines:

• Introduction
  • Company description and background
• Alignment with the Green Bond Principles and/or the Social Bond Principles
  • Comparison of the Green Bond Principles and/or the Social Bond Principles and the entity’s Sustainability bond framework
• Sustainability performance
  • Analysis of the company’s commitment with sustainability
• Risk exposure and mitigation
  • Identify risk exposures which may arise from the eligible projects
  • Identify policies and procedures to mitigate these risks
• Impact of proceeds
  • Understand the status quo of the system and analyse if and how the eligible projects can impact it in a positive way. For social projects, the assessment of the long-term support of the project to improve the state of the target populations is a key goal. On the other hand, the industry and regional impact are especially important for green projects.
    • Target populations/sector status quo and impact
    • Region status quo and impact
    • Impact the environment it in a positive and sustained manner
• Alignment of the eligible projects with the Sustainable Development Goals (SDG)**
  • Assess whether or not the eligible projects/activities are in line with any of the SDGs
  • Identify which SDGS are being covered

* Under the following links you can find the latest version of the:

• Green Bond Principles 2018
• Social Bond Principles 2018
• Sustainability Bond Guidelines 2018.

** Sustainable Development Goals

RAEX-Europe’s Green Loan Second Opinion is an independent opinion focused on assessing how the green loan framework prepared by the borrower complies with the Green Loan Principles established by the Loan Market Association (LMA)*. It also assesses the borrower’s green performance related to the eligible projects and the green impact of these projects, as well as the overall sustainability commitment of the entity.

First of all, we analyse how the entity plans to use the borrowed funds, we also asses the process for project selection and evaluation, the borrower’s management of proceeds process established and finally we evaluate the level of reporting in terms of the use of fund as well as the periodicity of this reporting. This analysis reassures all institutions participating in the green loan process that the green loan being issued complies with all the requirements set in place in the Green Loan Principles. It also helps the borrower itself to understand if its green loan framework complies with all necessary requirements and, if this is not the case, the entity can work to fix the non-compliant issues.

Besides this assessment, we also evaluate the overall green performance of the company and the specific impact of the projects which will be funded by the proceeds of the loan. Firstly, we determine the entity’s general commitment to sustainability based on the company’s social and environmental responsibility documentation or its sustainability reports. We then identify the risk exposures of the eligible projects and detect which policies and processes the company has in place to mitigate them and whether or not these policies and processes are adequate from our point of view. In order to assess the impact, we define the status quo of the region and the sector and analyse how the eligible projects in which the loan proceeds will be invested change this status quo in a positive way. One of the main objectives for us is to observe a forward-looking approach in terms of improving the current environmental state of the region where the project will be implemented.

We believe that the Green Loan Second Opinion should not only assess the compliance of the green loan framework with the Green Loan Principles, but should also explain the risk exposures which can have a material impact for the company and the environment and how these risk exposures are planning to be managed.

Our analysis is a tailor-made approach in accordance with the following guidelines:

• Introduction
  • Company description and background
• Alignment with the green loan principles
  • Comparison of the entity’s green loan framework with the green loan principles
• Sustainability performance
  • Analysis of the company’s commitment to sustainability
• Risk exposure and mitigation
  • Identify risk exposures which may arise from the eligible projects
  • Identify policies and procedures to mitigate these risks
• Impact of proceeds
  • Understand the status quo of the system and analyse if and how the eligible projects can impact it in a positive way. The assessment of the long-term support of the project to improve the state of the target populations is a key goal.
  • Sector status quo and impact
  • Region status quo and impact
• Alignment of the eligible projects with the Sustainable Development Goals (SDG)**
  • Assess whether or not the eligible projects/activities are in line with any of the SDGs
  • Identify which SDGs are being addressed

* In the following link you can find the latest version of the Green Loan Principles: Green Loan Principles.

** Sustainable Development Goals