Services for Bond Issuers

Obtain an independent assessment of the environmental and social quality of your green bonds

Green Bonds and Second Party Opinions

ISS ESG’s Second Party Opinion (SPO) Services provide sustainability, green and social bond issuers with a credible and independent assessment of the sustainability quality of their bonds. Those that meet ISS ESG’s rigorous global standards give sustainability-oriented investors security that the projects they fund are suitably sustainable.

How ISS Corporate Solutions Can Help1

ISS ESG’s External Reviews’ highlights:

  • In-depth analysis of the alignment of the Financing Framework with key market guidelines, the ICMA Green and Social Bond Principles
  • Assessment of the issuer’s ESG performance against its industry peers and based on over 100 indicators
  • Evaluation of the sustainability quality of the bond, including its contribution to the UN SDGs and an analysis of the environmental and social risks management by Use of Proceeds category
  • Detailed controversy screening of the bond’s pool and of the issuer itself
    • This is a key tool to demonstrate the sustainability credentials of the bond and of its issuer to potential investors in the sustainable debt capital market, whilst avoiding reputational risk & greenwashing accusation

ISS ESG’s SPO for Use of Proceeds Bonds

Assessment → Financing Framework

Assessment of the alignment of the Green Bond Framework with the latest version of the ICMA Green, Social Bond Principles or Sustainability Bond Guidelines and with other standards (e.g. EU Green Bond Standards, EU Taxonomy and other regional guidelines)

Evaluation → UN SDGs

Granular analysis of the contribution of the bond to environmental and social goals defined by the UN Sustainable Development Goals

KPIs → Environmental and Social Risks Management

  • Deep analysis of the pool against ISS ESG project-specific KPIs, defined based on key ESG guidelines and market initiatives
  • Full E&S controversy screening of the pool

Sustainability Performance → Issuer Sustainability Performance

  • Detailed and benchmarked assessment of the issuer’s ESG performance based on ISS ESG Corporate Rating – Does the issuer address key ESG challenges related with its activities?
  • Sustainability strategy – Is the issuer’s sustainability strategy ambitious, measurable and relevant to its activities’ core climate and sustainability challenges? An example is against The Paris Climate Goal (i.e. 1.5/2°C alignment) and the UN SDGs
  • Quantitative and qualitative overview of the ESG performance displayed in the SPO

ISS ESG’s SPO for KPI-linked and ESG-linked bonds

Issuer Sustainability Strategy

  • Detailed and benchmarked assessment of the issuer’s ESG performance based on ISS ESG Corporate Rating – Does the issuer address key ESG challenges related with its activities?
  • Sustainability strategy – Is the issuer’s sustainability strategy ambitious, measurable and relevant to its activities’ core climate and sustainability challenges? An example is against The Paris Climate Goal (i.e. 1.5/2°C alignment) and the UN SDGs
  • Quantitative and qualitative overview of the ESG performance displayed in the SPO

KPIs Selection

  • Deep and comprehensive assessment of the KPIs selected:
  • Materiality
  • Holism
  • Ambition
  • Measurability
  • Action plan

Governance

  • Analysis of the issuer’s disclosure commitments
  • Financial incentive – Is a coupon adjustment linked to succeeding or failing the targets present?

Get Certified Climate Bonds with ISS ESG

Since 2015, ISS ESG is an Approved Verifier by the Climate Bonds Initiative and helps issuers certify their bond against the Climate Bonds Standard.

Advantages of Climate Bond Certification:

  • Diversifying investor base by demonstrating the low-carbon intensity of the bond in line with the goals set by the 2015 Paris Agreement
  • Increased visibility of the deal, which then belongs to the CBI certified bonds database
  • Enhanced reputation of the bond and of the issuer

1While SPOs are sold and distributed by ISS Corporate Solutions, the analytical work to prepare and issue SPOs is performed by a dedicated ISS-ESG team and is based on the ISS-ESG methodology.

About ISS ESG

Long-Standing Expertise

  • 25 Years of Excellence in ESG Research
  • Highly Experienced Analysts
  • More than 180 clients worldwide
  • Customized Service

High Quality Research

  • Focus on Materiality
  • 600+ Detailed Industry Specific Criteria
  • Transparent Rating Process
  • Scientific Advisory Board

External Review

  • Over 120 SPOs delivered
  • SPOs conducted in Europe, Asia and the US for issuers active in several sectors: Bank, Utility, Local Authority, Real Estate, Transport, Chemicals, Tourism and Automotive

Learn more about ISS ESG Green Bond Services and Second Party Opinions.

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