Formats
Evaluation Summary#
Sustainalytics is of the opinion that the New Zealand Sovereign Green Bond Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021. This assessment is based on the following:
Use of proceeds#
The eligible categories for the use of proceeds – Clean Transport, Energy Efficiency and Renewable Energy, Green Buildings, Living and Natural Resources and Land Use, Terrestrial and Aquatic Biodiversity, Climate Change Adaptation, Sustainable Water and Wastewater Management and Pollution Prevention and Control – are aligned with those recognized by the Green Bond Principles. Sustainalytics considers that investments in the eligible categories are expected to lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDGs 6, 7, 9, 11, 12, 13, 14 and 15.
Project evaluation / selection#
The New Zealand Government (the “Government”) has established a cross-agency Green Bond Committee (GBC).[1] The New Zealand Treasury (the “Treasury”) will conduct the initial evaluation and selection of potential eligible projects against the eligible criteria. The GBC will be responsible for the final endorsement of the eligible projects. The Government has processes in place to identify and mitigate common environmental and social risks associated with the eligible projects. Sustainalytics considers the project selection process to be in line with market practice.
Management of proceeds#
The Treasury will be responsible for the allocation of proceeds and will periodically review and adjust the balance of total green bond proceeds allocated to eligible projects. The Government intends to reach full allocation within two financial years following the financial year of issuance. Pending allocation or reallocation, an amount equivalent to the unallocated proceeds will be deposited as cash in the Crown’s Settlement Account with the Reserve Bank of New Zealand. This is in line with market practice.
Reporting#
The Government intends to report on the allocation of proceeds on an annual basis and to prepare an impact report two years from issuance and report annually thereafter. Allocation reporting may include the total net green bond proceeds and the amount of unallocated proceeds. In addition, the Government is committed to reporting on relevant impact metrics. Sustainalytics views the Government’s allocation and impact reporting as aligned with market practice.
Note
- [1] The Green Bond Committee is chaired by the Treasury and comprises representatives from the New Zealand Debt Management; the Ministry for the Environment; the Ministry of Transport; Waka Kotahi New Zealand Transport Agency; the Ministry of Business, Innovation and Employment; the Ministry for Primary Industries; the Department of Conservation; and an independent member with relevant skills and experience.