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Weakness in the green bond framework disclosed by an issuer.
We meet wit OP Financial Group when they first disclosed their initial GB framework. We told them that we were interested in their green bond but that we would not invest in it because we were not comfortable with one eligible project category (possibility to (re)finances loans granted to “leading players in terms of ESG criteria in their relevant field. Moreover the part of the turnover that is not classified as “green” is not allowed to be in any means environmentally harmful (environmentally neutral activities)”). Indeed we found that such category implies the possibility that the green bond finance “non green” assets. We thus asked them to remove this eligible project category from their framework. The engagement was successful since OP finally decided to review its framework and remove this project category, limiting eligible assets to loans granted to “green pure players” (90% of the turnover from environmental friendly activities as specified by the elgibility criteria). Thanks to this engagement, we were finally able to invest in this green bond.