Project Details
Project
HTWO Guangzhou Green Finance Framework Second-Party Opinion (2021)
Client
HTWO Guangzhou Co., Ltd.
Project Type
Green Bond/Loan
Industry Group
Auto Components
Use of Proceeds
Clean transport; Renewable energy; Water/waste water management;
Location
China
Evaluation Date
Oct 2021
Evaluation Summary
Sustainalytics is of the opinion that the HTWO Guangzhou Green Finance Framework 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 – Clean Transportation, Renewable Energy, and Sustainable Water and Wastewater Management – are aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that investments in the eligible categories are expected to facilitate low-carbon transportation, improve the environmental performance of the Company’s operations in China and advance the UN Sustainable Development Goals, specifically SDG 6, 7 and 9.
PROJECT EVALUATION / SELECTION
HTWO’s internal Working Group, comprising of senior members from Finance and Accounting department and Business Strategy department, will manage the process of evaluating and selecting projects in accordance with the eligibility criteria in the Framework. The eligible assets will be reviewed on an annual basis. HTWO intends to apply HMC’s requirements on environmental protection, ethics and human rights to all allocation decisions made under the Framework. Sustainalytics considers these risk management systems to be adequate and the project selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
HTWO intends to monitor and track the allocation of proceeds to eligible projects via a Green Financing Register, which will be reviewed by the Working Group on an annual basis. Pending full allocation, proceeds will be temporarily held as cash or cash equivalents in HTWO’s main operating bank accounts, for up to 12 months from issuance. This is in line with market practice.
REPORTING
HTWO intends to annually report on the allocation and impact of proceeds until full allocation on its website, for public issuances, or make the same available to its lenders or investors upon request. Allocation reporting will include the total amount of proceeds allocated, the share of financing versus refinancing and the balance of unallocated proceeds. As part of impact reporting, HTWO is committed to reporting on relevant environmental impact metrics. Sustainalytics views HTWO’s allocation and impact reporting as aligned with market practice.