By Anna Peel. Originally published at ValueWalk.
S&P Global Ratings has published a second party alignment opinion for CapitaLand Integrated Commercial Trust’s (CICT) Green Finance Framework. One of the largest Real Estate Investment Trusts (REIT) in Singapore, CICT invests in retail and office properties and integrated developments. As of 31 December 2021, CICT’s portfolio consists of 21 properties in Singapore and two in Frankfurt with an asset value of 22.5 billion Singapore dollars (S$). CapitaLand Integrated Commercial Trust Management Ltd. (CICTML) – a wholly owned subsidiary of Singapore-listed CapitaLand Investment (CLI) – manages CICT. According to S&P, CICT’s green finance framework is aligned with the Green Bond Principles (GBP) and the Green Loan Principles (GLP).
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CICT’s Green Finance Framework
- CICT’s use of proceeds was found to be “aligned” with the applicable principles. The company commits to allocating the net proceeds from instruments under its Green Finance Framework exclusively to eligible green projects, which support the environmental objectives of climate change mitigation, natural resource conservation, and pollution prevention and control. However, CICT does not commit to disclosing the share of financing versus refinancing in the use of proceeds, a limitation to its use of proceeds commitment.
- CICT’s process for project evaluation and selection was found to be “aligned” as the company’s finance team will select and review green projects that are eligible for financing and then present them to CICTML’s CEO and CFO for approval on an annual basis. CICT will also leverage its risk management policies to identify and manage perceived environmental and social risks associated with the financed projects.
- The company commits to tracking and monitoring the use of proceeds of each green transaction under the framework at least on annual basis. Pending the allocation of proceeds, CICT will hold them in cash and cash equivalents, as per its treasury policy.
- CICT’s reporting was also found to be “aligned” as the company will report annually on both the proceeds allocation and the environmental impact – where relevant and feasible – of financed projects in a sustainability report or on its corporate website until full allocation.
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