Project Details
Project
Prudential Financial, Inc. Green Bond Framework Second-Party Opinion
Client
Prudential Financial, Inc.
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
U.S.
Evaluation Date
Feb 2020
Evaluation Summary
Sustainalytics is of the opinion that the Prudential Financial, Inc. Green Bond Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Renewable Energy, Green Buildings, Environmentally Sustainable Management of Living Natural Resources and Land Use, Energy Efficiency, Clean Transportation, Sustainable Water and Wastewater Management and Pollution Prevention and Control – are aligned with those recognized by the Green Bond Principles 2018. Sustainalytics considers that investments in these areas will lead to positive environmental impacts, in particular decreased greenhouse gas emissions, and advance the UN Sustainable Development Goals, specifically Goals 6, 7, 9, 11, 12 and 15.
PROJECT EVALUATION/SELECTION
Prudential has established a Green Bond Council, comprised of members from its Treasury, Chief Investment Office, and Corporate Governance/Sustainability teams. Prudential’s Chief Investment Office will first evaluate and determine which projects are eligible for inclusion in the portfolio of Eligible Green Assets. The Green Bond Council will review and validate the projects compiled by the Chief Investment Office. This Council will also be in charge of reviewing and validating allocation and impact reporting. This is in line with market practice.
MANAGEMENT OF PROCEEDS
Prudential’s Green Bond Council will be in charge of monitoring the allocation of proceeds. Prudential will adjust the tracked projects on a quarterly basis to match allocations to eligible assets. Prudential will, on a best efforts basis, substitute additional green assets for any assets that are no longer eligible, and unallocated proceeds will be invested either in green bonds that are in line with the company’s investment guidelines or in cash, cash equivalents and/or other liquid marketable instruments. This is in line with market practice.
REPORTING
Prudential has committed to undertaking annual allocation reporting until full allocation of any green bond as well as impact reporting where feasible. Allocation reports will contain information such as net proceeds raised from each Green Bond, aggregate amounts of funds allocated to each of the Eligible Categories as well as the balance of unallocated proceeds. Impact reporting will include relevant quantitative performance indicators. Allocation and impact reporting will be made available publicly. This is in line with market practice.