Project Details
Project
Lilly Sustainability Bond Framework(2021)
Client
Eli Lilly and Company
Project Type
Sustainability Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
U.S.
Evaluation Date
Aug 2021
Evaluation Summary
Sustainalytics is of the opinion that the Lilly Sustainability Bond Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, and Social Bond Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Pollution Prevention and Control, Energy Efficiency, Renewable Energy, Sustainable Water and Wastewater Management, Clean Transportation, Terrestrial and Aquatic Biodiversity Conservation, Access to Essential Services: Healthcare, and Socioeconomic Advancement and Empowerment – are aligned with those recognized by both the Green Bond Principles and the Social Bond Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDG 3, 5, 6, 7, 8, 9, 12 and 14.
PROJECT EVALUATION / SELECTION
Lilly's internal process in evaluating and selecting projects is overseen by a committee comprised of members from the Company's Sustainability and Finance teams. The committee will be responsible for evaluating any potential relevant environmental and social risks associated with the Eligible Projects, and this is applicable to all allocation decisions made under the Framework. Sustainalytics considers the risk management system to be adequate and the project evaluation and selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
Lilly's Finance department will track net bond proceeds using its internal systems. Lilly intends to fully allocate net proceeds of its green, social and/or sustainability bonds within 24 months of issuance. Pending allocation, proceeds will be managed in line with Lilly's liquidity practices. This is in line with market practice.
REPORTING
Lilly intends to report on the allocation of proceeds on its ESG website on an annual basis until full allocation. The allocation report will contain (i) information about the amount allocated on a category level, (ii) a list of projects financed, (iii) information on the split between new financing and refinancing, and (iv) the remaining amount of unallocated bond proceeds. In addition, Lilly intends to report on relevant impact metrics. Sustainalytics views Lilly’s allocation and impact reporting as aligned with market practice.