Project Details
Project
Shinhan Bank Sustainable Development Goals (SDG) Bond
Client
Shinhan Bank
Project Type
Sustainability Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
South Korea
Evaluation Date
Dec 2018
Evaluation Summary
Sustainalytics is of the opinion that the Shinhan Bank SDG Bond Framework is credible and impactful, and aligns with the Sustainability Bond Guidelines 2018. This assessment is based on the following:
USE OF PROCEEDS
The eight green categories and the three social categories for eligible use of proceeds – (i) Renewable Energy, (ii) Energy Efficiency, (iii) Green Buildings, (iv) Pollution Prevention and Control, (v) Clean Transportation, (vi) Sustainable Water and Wastewater Management, (vii) Climate Change, (viii) Terrestrial and Aquatic Biodiversity Conservation, (ix) Access to Essential Services, (x) Employment Generation, and (xi) Socioeconomic Advancement and Empowerment – are aligned with those recognized by the Green Bond Principles 2018, the Social Bond Principles 2018, and the Sustainability Bond Guidelines 2018. Although the financing is not exclusively project-based, the use of proceeds will, in Sustainalytics’ opinion, have positive environmental and social impacts and advance the UN Sustainable Development Goals 1, 6, 7, 8, 9, 11, 12,13, and 14
PROJECT EVALUATION/SELECTION
A dedicated SDG Bond Working Group (SBWG) will oversee Shinhan Bank’s internal process in evaluating and selecting projects. The SBWG will be coordinated by the Treasury Department and will consist of members from various departments, including the CSR Department. This is in line with market practice.
MANAGEMENT OF PROCEEDS
Shinhan Bank will track the net use of proceeds through a project register. The net proceeds or an amount equal to net proceeds of the bonds will be allocated to eligible green and/or social projects. Pending allocation, proceeds will be invested in cash or cash equivalent following Shinhan Bank’s usual liquidity management policy. This is in line with market practice.
REPORTING
Shinhan Bank intends to publish the information in its annual report within one year of issuance, and on an annual basis. Allocation reporting will include the allocated amount on a projectbasis, the aggregate amount allocated to eligible projects, as well as the portion of financing and refinancing. Impact reporting will include relevant social and environmental metrics, where feasible. Sustainalytics views Shinhan Bank’s allocation and impact reporting as aligned with market practice.