ACRA checks the client’s debt obligations (bonds and loans) for compliance with the Sustainability Bond Guidelines 2021 of the International Capital Market Association (ICMA).
WHY CHOOSE ACRA?
QUESTIONS AND ANSWERS
What are sustainability debt obligations?
Sustainability debt obligations are issued to finance projects that make a clear positive contribution to solving social and environmental problems.Sustainability bonds are bonds where the proceeds will be exclusively applied to finance or re-finance a combination of both green and social projects. Therefore, two areas are financed within the framework of a single issue.
What is a sustainability obligation assessment for?
If an issuer wants to finance its social and green projects via a single issue and at the same time clearly indicate its positive contribution to the development of society, it can mark its financial obligations as sustainable. This has the following advantages:
- Creates a positive image of a socially and environmentally responsible company.
- Helps to increase the pool of investors and creditors.
- Results in potential oversubscription for the issue.
- Increases the transparency of the transaction.
- Allows the issuer to receive benefits from the state1.
Bonds or loans are labeled as sustainability commitments by an independent verifier — ACRA
Preparing for assessment of sustainability bonds
In order to issue sustainability bonds, the issuer must:
- Determine the projects for which funding will be attracted.
- Conduct an initial assessment of projects: are they social or green and are they in line with ICMA/LMA/LSTA principles, taxonomies and current market practices?
- Go through the necessary steps similar to preparing for the issue of social and green obligations.
- Develop a Sustainable Finance Framework (SFF)2, which is an officially approved public document that defines:
- Use of proceeds.
- Process of evaluating and selecting projects.
- Management of proceeds.
- Determine whether additional policies and procedures are needed for each of the SFF clauses, and if necessary, develop them.
- Verify the bonds/loans planned for placement with a certified verifier — ACRA.
- Prepare documentation for the placement of bonds or obtaining a loan.
- Choose an exchange for placement/creditor bank.
- Carry out a financial transaction and enter the national and/or international registries.
- Maintain annual reports on the use of received funds.
- ICMA’s sustainability bond guidelines and principles
- ICMA’s social bond guidelines and principles
- ICMA’s green bond principles and guidelines
- LSTA/LMA green loan principles and guidelines
- LSTA/LMA social loan principles and guidelines
- Moscow Exchange’s listing rules
- Bank of Russia’s securities issue standards
Why choose ACRA?
ACRA is included in the list of independent verifiers of ICMA, VEB.RF and the Moscow Exchange.
After assigning an assessment to debt obligations, an issue can be included in the databases of ICMA, VEB.RF, the Sustainability Sector of the Moscow Exchange and/or other databases at the request of the issuer.
ACRA’s sustainability obligation verification process
The process for obtaining a sustainability obligation assessment is as follows
ACRA carries out the assessment in no more than 30 (thirty) business days following the client’s provision of the necessary documents and information.
2If the issuer/borrower already has separate green and social finance policies, the development of a third separate document is not required.