Project Details
Project
Hydro One Limited Sustainable Financing Framework Second-Party Opinion (2024)
Client
Hydro One Limited
Project Type
Sustainability Bond/Loan
Industry Group
Utilities
Use of Proceeds
Renewable energy; Energy efficiency; Clean transport; Conservation; Climate change adaptation; Socio-economic advancement; Access to essential services;
Location
Canada
Evaluation Date
Aug 2024
Evaluation Summary
Sustainalytics is of the opinion that the Hydro One Limited Sustainable Financing Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2023, Green Loan Principles 2023 and Social Loan Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Clean Energy, Energy Efficiency, Clean Transportation, Biodiversity Conservation, Climate Change Adaptation, Socio-economic Advancement of Indigenous Peoples, and Access to Essential Services – are aligned with those recognized by the Green Bond Principles, Social Bond Principles, Green Loan Principles and Social Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental and social impacts and advance the UN Sustainable Development Goals, specifically SDGs 7, 8, 9, 10, 13 and 15.
PROJECT EVALUATION AND SELECTION
Hydro One’s Sustainable Finance Working Group is responsible for the evaluation and selection of projects in line with the eligibility criteria of the Framework. The Company has adopted internal environmental and social risk policies and guidelines which apply to all eligible projects. Sustainalytics considers the project selection process and the environmental and social risk management policies to be in line with market practice.
MANAGEMENT OF PROCEEDS
Hydro One’s Treasury Department will be responsible for tracking and managing proceeds through a Sustainable Financing Register. Hydro One intends to reach full allocation within 24 months of each issuance, and has a 24 month look-back period for refinancing. Pending allocation, unallocated proceeds will be held temporarily in cash equivalents, used to repay debt or invested in bank deposits. Sustainalytics considers this to be in line with market practice.
REPORTING
Hydro One intends to report on allocation of proceeds on its website on an annual basis until full allocation. Allocation reporting will include details such as allocation per eligible category, share of unallocated proceeds, share of financing versus refinancing. In addition, Hydro One intends to report on relevant impact metrics. Sustainalytics views Hydro One’s allocation and impact reporting as aligned with market practice.