Project Details
Project
Low Income Investment Fund Sustainability Bond Framework Second-Party Opinion
Client
Low Income Investment Fund
Project Type
Sustainability Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
U.S.
Evaluation Date
Jun 2019
Evaluation Summary
Sustainalytics is of the opinion that the LIIF Sustainability Bond Framework, contained with the bond’s POM, is credible and impactful, and aligns with the Sustainability Bond Guidelines 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds are aligned with those recognized by both the Green Bond Principles and Social Bond Principles. Sustainalytics considers green projects related to green buildings, energy efficiency, and transit-oriented development and social projects in the areas of affordable housing, child care, education, community health care, and healthy foods to have positive environmental or social impacts and advance various UN Sustainable Development Goals.
PROJECT EVALUATION/SELECTION
LIIF has used its existing policies and procedures to select the eligible projects for its Sustainability Bond. The final approval for all credit offered rests with its Chief Credit Officer or its Internal Loan Committee. If a policy exception be required, approval from the Lending Risk Committee is required before the loan is approved. This is in line with market practice.
MANAGEMENT OF PROCEEDS
LIIF will immediately use the proceeds of the bond to finance a portfolio of projects which has been previously identified, and there will be no ongoing management of proceeds once this allocation occurs. This is in line with market practice.
REPORTING
Considering the intention to fully allocate at time of issuance to a defined list of projects, no further allocation reporting is considered necessary; this is in line with market practice. LIIF will provide impact reporting in line with its existing reporting regime, which provide project-level details for a selection of projects to its website and in its annual report. Sustainalytics views positively LIIF’s overall approach to reporting, while noting that transparency around the specific impacts of the Sustainability Bond would be furthered by the publication of annual impact reporting related to the Bond.