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Sustainability Insights: Spotlight On Sustainable Finance Through The Lens Of Our SPOs And CTAs

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Sustainability Insights: Spotlight On Sustainable Finance Through The Lens Of Our SPOs And CTAs

This report does not constitute a rating action.

Our latest Sustainable Finance Spotlight report is available on spglobal.com

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The breakdown of our SPOs broadly aligns with sustainable bond issuance
  • Energy, green buildings, clean transportation and energy efficiency are the most frequent project categories we analyze.
  • Not all green bond projects support climate mitigation or adaptation as their main objectives, however.
  • Our Shades of Green approach also allows us to analyze projects supporting biodiversity restoration or conservation, for example.

SPO distribution by type, region, and sector
Green SPOs lead by financing type and Europe, the Middle East, and Africa (EMEA) leading by region. We assessed more than two-thirds of our 227 green SPOs as Dark green or Medium green.
North America is well represented among social and sustainability SPOs, mainly reflecting the financing of housing and essential services projects. Dark green or Medium green shades were frequently attributed to renewable energy, clean transportation, and climate adaptation.
In Asia-Pacific (APAC), most of our SPOs were on green and sustainability-linked financing. There was a large representation of Light green and Medium green shades in the green buildings category.

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We also provide EU Taxonomy assessments for green bond issuers
  • The EU Taxonomy is a comprehensive classification system introduced by EU regulation. It aims to align economic activities with a net-zero trajectory by 2050 and with broader environmental objectives.
  • Activities aligned with the EU Taxonomy must show a substantial contribution to an EU objective, do no significant harm (DNSH) to other objectives, and incorporate minimum safeguards. The first two are defined by the TSC (technical screening criteria) of the six environmental EU objectives that currently cover more than 150 economic activities.
  • The EU Taxonomy is key to the European Green Bond Regulation, since it requires that at least 85% of the funds raised through a European green bond be allocated to economic activities aligned with the EU Taxonomy.
  • All EU Taxonomy-aligned projects we have reviewed were assigned a shade of green.

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In the Sustainable Finance Spotlight report, more than 40 examples illustrate our analytical approach
  • Our spotlight report showcases 30 green project categories and six social project categories along with three EU Taxonomy assessments, in addition to three Climate Transition Assessments
  • As low- and lower-middle income countries continue to look to sustainable debt markets to finance development and climate objectives, our holistic jurisdiction analysis takes account of local aspects.

Table 1

Green projects shown as examples in the Sustainable Finance Spotlight report
Sector Light green Medium to Light green Medium green Dark to Medium green Dark green
Agriculture  SalMar   Rwanda§  Cinis Fertilizer 
Biodiversity  Togo*§  Qingdao Conson Development  Dominican Republic 
Clean transportation  Xunta de Galicia  Volvo Group 
Climate change adaptation  Rwanda§  Fastpartner 
Energy  Rwanda*§  Oglethorpe Power Corp  Altech Batteries  
Energy efficiency  Reykjavik Energy  IREIT 
Green buildings  California Housing Finance Agency  Platzer 
Pollution prevention and control  A2A  Togo§  Agilyx 
Sustainable water  Banco Interamericano de Finanzas  Rwanda§  Huai’an Investment Holdings 

*Example in the Jurisdiction Analysis section. **Example in the EU Taxonomy section. §Projects carried out in a low- or middle-income country.

Our analysis of social projects shows activities in both developed and developing markets
  • Asia-Pacific (APAC) and the Americas feature more prominently in social and sustainability financing than in green financing.
  • The definitions of the social objective and target population are key, and these often depend on the local context.
  • Social and affordable housing projects are the most common social project categories.

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Table 2

Social projects shown as examples in the Sustainable Finance Spotlight report 
Project categories  Americas  Europe, the Middle East, and Africa  Asia-Pacific 
Social projects (various types)  Bogota Distrito Capital (Access to essential services)  FirstRand  Philippine National Bank (PNB)  (Affordable basic infrastructure) 
Social housing projects  The City of New York  Korea Land & Housing Corp. 

Our Climate Transition Assessments show a range of future shades and time horizons
  • We have assigned Dark green future shades to companies whose role is solely to support the transition in the energy and automotive sectors.
  • In the real estate sector, strategies that consider value-chain emissions can better support the transition to a low-carbon future.
  • The time horizon we select matches the company’s planned transition changes, considering implementation actions and risks.
  • So far, we have only publicly released CTAs with a green future shade, although our assessment covers all shades as potential outcomes.

Table 3

Climate Transition Assessments 
Company  Sector  Country  Green Equity Designation  Future Shade  Time horizon 
Primrock  Energy services  Sweden  Nasdaq  Dark green  Foreseeable future 
DST Electric Vehicle Rental (Shenzhen) Co.  Automotive  China  N/A  Dark green  Foreseeable future 
Fabege  Real estate  Sweden  Nasdaq  Medium green  2030 
Kempower Oyj  Energy  Finland  Nasdaq  Dark green  Foreseeable future 
PSP Swiss Property  Real estate  Switzerland  N/A  Light green  2035 

Period September-December 2024.

Related Research

Primary Contacts:Patrice Cochelin, Paris 33144207325;
patrice.cochelin@spglobal.com
Victor H Laudisio, Sao Paulo 55-1130394834;
victor.laudisio@spglobal.com
Tim Axtmann, Oslo ;
tim.axtmann@spglobal.com
Catherine Baddeley, London 44-2071760459;
catherine.baddeley@spglobal.com
Luis Solis, Madrid 34-914233218;
luis.solis@spglobal.com
Maria Ortiz De Mendivil, Madrid 34-914233217;
maria.omendivil@spglobal.com
Maria Knudsen, Oslo ;
maria.knudsen@spglobal.com
Maxime Chul, Paris 33-144207216;
maxime.chul@spglobal.com
Erin Boeke Burke, New York 1-212-438-1515;
Erin.Boeke-Burke@spglobal.com
Catherine Rothacker, Oslo ;
catherine.rothacker@spglobal.com
Alan Bonilla, San Francisco 1-415-371-5021;
alan.bonilla@spglobal.com
Carina Waag, Oslo ;
carina.waag@spglobal.com
Irina Velieva, Stockholm 7-49-5783-4071;
irina.velieva@spglobal.com
Jesus Palacios, Washington DC 52-55-5081-2872;
jesus.palacios@spglobal.com
BRUNO MASSINGA, London 44-20-7176-0019;
bruno.massinga@spglobal.com

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