Project Details
Project
RHB Sustainability Sukuk and Bond Framework Second-Party Opinion (2023)
Client
RHB Banking Group
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Renewable energy; Energy efficiency; Pollution prevention and control; Natural resources/land use management; Clean transport; Water/waste water management; Climate change adaptation; Eco-efficient products; Green buildings; Affordable basic infrastructure; Access to essential services; Affordable housing; Employment generation and Socio-economic empowerment; Food security;
Location
Malaysia
Evaluation Date
Mar 2023
Evaluation Summary
Sustainalytics is of the opinion that the RHB Sustainability Sukuk and Bond Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2021 and ASEAN Sustainability Bond Standards 2018. This assessment is based on the following:
USE OF PROCEEDS
The 14 eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles, Social Bond Principles and ASEAN Sustainability Bond Standards. Sustainalytics considers that investments in the eligible categories will lead to positive environmental or social impacts in Malaysia and advance the UN Sustainable Development Goals, specifically SDGs 2, 3, 4, 6, 7, 8, 9, 11, 12 and 13.
PROJECT EVALUATION / SELECTION
RHB Banking Group has established a Board Sustainability Committee to oversee project evaluation and selection, which is supported by the Group Sustainability Committee led by the Group Managing Director or CEO. The Board Sustainability Committee is further supported by senior leaders from RHB’s Sustainability Councils. RHB has developed and integrated ESG risks assessment tools into its lending and financing evaluation and decision-making. Sustainalytics considers the risk management system to be adequate and the project evaluation and selection process to be aligned with market practice.
MANAGEMENT OF PROCEEDS
RHB’s Group Treasury, supported by the Group Sustainability Management and Group Capital and Balance Sheet Management will oversee the management of proceeds with a centralized register to track and monitor the allocation of proceeds. RHB will apply a look-back period of a maximum of three years and aims to fully allocate proceeds within two years of issuance. Pending allocation, unallocated proceeds will be temporarily invested in cash or cash equivalents. Sustainalytics considers the process for the management of proceeds to be aligned with market practice.
REPORTING
RHB intends to report on the allocation of proceeds on its website on an annual basis until full allocation. The report will include an overview of the allocation of bonds or sukuk proceeds, including a breakdown of allocation per expenditure category and the unallocated proceeds, if any. In addition, RHB is committed to reporting on relevant impact metrics. Sustainalytics views RHB’s allocation and impact reporting as aligned with market practice.