Project Details
Project
Aareal Bank AG Green Finance Framework - Liabilities Second-Party Opinion (2021)
Client
Aareal Bank AG
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
Germany
Evaluation Date
Aug 2021
Evaluation Summary
Sustainalytics is of the opinion that the Aareal Bank AG Green Finance Framework - Liabilities is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds –Green Buildings and Energy Efficiency Upgrades – are aligned with those recognized by the Green Bond Principles 2021 and the Green Loan Principles 2021. Sustainalytics considers that investments in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDGs 7 and 11.
PROJECT EVALUATION / SELECTION
The Valuation & Research Unit and Credit Transaction Management Unit at Aareal Bank (the “Bank”) will assess and document respectively, the eligibility of assets and activities based on the Framework’s eligibility criteria. The Green Finance Committee provides guidance and is responsible for the management of the overall Framework. The Bank has a dedicated environmental and social risk assessment and mitigation process that is applicable to all allocation decisions made under the Framework. Sustainalytics considers these risk management systems to be adequate and the process for project evaluation and selection in line with market practice.
MANAGEMENT OF PROCEEDS
The Bank’s process for management of proceeds is overseen by Aareal Bank’s treasury and Green Finance Committee. The net proceeds of the green financing instruments will be placed in the Company’s general funding account and earmarked in a separately established IT systems used to monitor eligible green assets. Pending allocation, unallocated proceeds will be held in cash, cash equivalent or other similar instruments. The Bank intends to reach full allocation within 24 months of issuance. This is in line with market practice.
REPORTING
Aareal Bank intends to report on allocation of proceeds on its website on an annual basis until full allocation. Allocation reporting will include the amount of outstanding green financing instruments, share of financing vs refinancing, the size of eligible portfolio, amount of covered bonds, and examples of assets financed where feasible. In addition, the Bank is committed to reporting on relevant impact metrics. Sustainalytics views Aareal Bank’s allocation and impact reporting as aligned with market practice.