Project Details
Project
China Water Affairs Green Finance Framework Second-Party Opinion (2021)
Client
China Water Affairs
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
China
Evaluation Date
Mar 2021
Evaluation Summary
Sustainalytics is of the opinion that the China Water Affairs Group Limited Green Finance Framework is credible and impactful, and aligns with the four core components of the Green Bond Principles 2018 and the Green Loan Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Sustainable Water and Wastewater Management and Renewable Energy – are aligned with those recognized by the Green Bond Principles 2018 and Green Loan Principles 2021. Sustainalytics considers that the eligible categories are expected to improve water supply and quality, while also promoting renewable energy in China, and advance the UN Sustainable Development Goals, specifically Goals 6 and 7.
PROJECT EVALUATION / SELECTION
China Water Affairs’ internal process in evaluating and selecting projects is overseen by the Environmental Social Management System Working Group (“EWG”) that meets every 12 months and includes the General Manager and other senior representatives from various departments. The EWG is responsible for project selection, ensuring compliance, and managing updates to the Framework. Shortlisted projects may be presented to the board for approval. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
China Water Affairs’ process for management of proceeds is overseen by the Finance Team and the proceeds are tracked and allocated using a register. The net proceeds from each green financing transaction will be deposited in general funding accounts and earmarked to eligible projects. The Company intends to allocate all proceeds within 24 months of issuance. Pending allocation, proceeds will be held in accordance with the Company’s liquidity guidelines. This is in line with market practice.
REPORTING
China Water Affairs intends to report annually on allocation of proceeds and impact on its website, annual report, or ESG report until full allocation. The allocation report contains details of green financing transaction, aggregate amounts allocated to eligible green projects, share of financing versus refinancing, and balance of unallocated proceeds. In addition, China Water Affairs Group Limited is committed to reporting on relevant impact metrics. Sustainalytics views China Water Affairs Group Limited’s allocation and impact reporting as aligned with market practice.