Project Details
Project
United Utilities Sustainable Finance Framework Second-Party Opinion
Client
United Utilities
Project Type
Sustainability Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
U.K.
Evaluation Date
Nov 2020
Evaluation Summary
Sustainalytics is of the opinion that the United Utilities Sustainable Finance Framework is credible and impactful and aligns with the Green Bond Principles 2018, Social Bond Principles 2020, Sustainability Bond Guidelines 2018 and Green Loan Principles 2020. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Sustainable Water and Wastewater Management, Renewable Energy, Energy Efficiency, Pollution Prevention and Control, Environmentally Sustainable Management of Living Natural Resources and Land Use, Terrestrial and Aquatic Biodiversity Conservation, Clean Transportation and Access to Essential Services – are aligned with those recognized by the Green Bond Principles, Social Bond Principles and Green Loan Principles. Sustainalytics considers that the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDG goals 6, 7, 11, 14 and 15.
PROJECT EVALUATION/SELECTION
United Utilities’ Sustainable Finance Committee, comprised of representatives from the Company’s Treasury, Sustainability, Finance and Regulated Business will oversee the project evaluation and selection process. The Committee will meet semi-annually to review proposed allocations, while the Company’s Treasury function will be responsible for final approval. This is in line with market practice.
MANAGEMENT OF PROCEEDS
United Utilities’ Treasury will be responsible for managing the net proceeds of all issuances under the Framework. The Company applies a three-year look-back period for refinancing. Pending allocation, net proceeds will be invested on a temporary basis in accordance with the Company’s relevant internal policies, in cash, cash equivalents or similar instruments. This is in line with market practice.
REPORTING
United Utilities intends to provide reporting within oneyear of issuance and until full allocation. Allocation reporting will include total amount of proceeds allocated to eligible projects, the proportion of proceeds allocated to refinancing of existing eligible projects and unallocated proceeds, while impact reporting will draw on several quantitative and qualitative impact indicators. Sustainalytics views United Utilities’ allocation and impact reporting as aligned with market practice.