Services for Bond Issuers
Obtain an independent assessment of the environmental and social quality of your green bonds.
Sustainable Bonds & Second Party Opinions
ISS Corporate Solutions’ (ICS) Second Party Opinion (“SPO”) services provide issuers with an independent assessment of their Green, Social and Sustainability-linked financing frameworks. Those that meet ICS’ rigorous global standards give investors the security that the projects they fund are suitably sustainable.
How ISS Corporate Solutions Can Help*
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
* While 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 150 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
