October 2021
CIC has not carried out any audit mission for nor commissioned any consultancy services with Analogue Holdings Limited and there is no established relationship (financial or others) between CIC and Analogue Holdings Limited.
The opinion provided herein is an independent opinion on the sustainability credentials and management of the financial instrument, based on the information made available to CIC. CIC has neither interviewed any of the Analogue Holdings Limited’s employees, nor performed any on-site assessment and tests to check the accuracy of the information provided by Analogue Holdings Limited. The accuracy, comprehensiveness and trustworthiness of the information collected rests with Analogue Holdings Limited. CIC, in providing this opinion, has not certified the effectiveness, the quality or the irreversibility of the assets to be financed by the sustainable financing instrument. Analogue Holdings Limited is fully responsible for attesting the compliance with its commitments defined in its policies, for their implementation and monitoring. The opinion delivered by CIC neither focuses on the financial performance of Analogue Holdings Limited, nor on the effective allocation of its proceeds. CIC is not liable for the consequences arising if third parties use this opinion either to make investment decisions or to make any kind of business transaction.
The opinion provided by CIC on Analogue Holdings Limited can only be used by Analogue Holdings Limited and the Financial Institution. The distribution and publication are at the discretion of Analogue Holdings Limited, subject to CIC’s approval.
| Application no. | SFCS-APPLY-2021-024 |
|---|---|
| Certificate no. | SFCS-2021-017 |
| Date of application | 2021.12.23 |
| Company name | Analogue Holdings Limited |
| Business registration no. | 50520200 |
| Company profile | Established in 1977 and headquartered in Hong Kong, ATAL Engineering Group (together with its subsidiaries) (“ATAL” or the “Group”) is a leading E&M engineering service provider in Hong Kong with operations in Macau, Mainland China, the United Kingdom and the United States. Serving a wide spectrum of customers from public and private sectors, the Group provides multi-disciplinary and comprehensive E&M engineering and technology services in four major segments, including Building Services, Environmental Engineering, Information, Communications and Building Technologies (“ICBT”) and Lifts & Escalators. Our parent company, Analogue Holdings Limited, was incorporated in 1995 and listed on the Main Board of the Stock Exchange of Hong Kong in 2019 (Stock Code: 1977). |
| Sustainable financing instrument | Green Loan |
| Application level | Company Level |
Analogue Holdings Limited has confirmed the proceeds will be used for the specified Project Categories that meet the eligibility criteria stated:
| Project Categories | Renewable Energy |
| Eligibility Criteria | Projects relating to the adoption of renewable energy to reduce the demand for conventional power generation sources, such as solar energy and wind energy. |
| Project Categories | Energy Efficiency |
| Eligibility Criteria | Projects relating to the adoption of smart technologies and/or systems for optimising energy management of new and existing buildings/plants/infrastructures. Projects involving the upgrades of facilities/equipment (e.g. chiller system, lift system, lighting system, water/wastewater treatment systems) of new and existing buildings/ plants/ infrastructures. Projects relating to the adoption of construction site management measures to reduce energy consumption during the construction process. |
| Project Categories | Pollution Prevention and Control |
| Eligibility Criteria | Projects relating to the adoption of facilities, systems and equipment for promoting waste reduction and recycling, and waste-to-energy technologies. Projects relating to the adoption of facilities, systems and equipment to mitigate environmental pollution (e.g. air, noise, water) during the construction process. |
| Project Categories | Sustainable Water and Wastewater Management |
| Eligibility Criteria | Design, installation, maintenance and operation of environmental engineering facilities for water, sewage, sludge projects that will result in higher process efficiency and treatment quality of water/wastewater, such as the adoption of advanced water and/or wastewater treatment systems and technologies. Projects that improve water efficiency management during construction process and daily office operations. |
| Project Categories | Clean Transportation |
| Eligibility Criteria | Projects relating to the adoption of low emission transport. |
| Project Categories | Climate Change Adaptation |
| Eligibility Criteria | Projects that will strengthen organisational preparedness for climate change, such as the adoption of climate risk scenario planning tools and third-party vulnerability assessments. Projects that support climate change adaptation, covering the design, construction, maintenance and upgrades of buildings/plants/infrastructures. |
| Project Categories | Green building |
| Eligibility Criteria | Projects that require our contribution to related green building assessment credits for new, existing or refurbished buildings/fitouts which have received at least the 2nd highest grade of one of the regional, national or international recognised green building standards, such as LEED, BEAM Plus, WELL or other equivalent green building certifications. |
| Project Categories | Circular Economy |
| Eligibility Criteria | Responsible sourcing of sustainable materials and products including those certified by certification bodies such as the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC). |
Analogue Holdings Limited has confirmed that the selected Project Categories and Eligibility Criteria are in line with the following internationally recognized frameworks across financial markets:
Frameworks
Analogue Holdings Limited has also confirmed the following purposes of the proceeds:
Purpose of financing
Analogue proposes to raise a Green Loan for projects that falls into the following Green Loan Principle project categories, including Renewable Energy, Energy Efficiency, Pollution Prevention and Control, Sustainable Water and Wastewater Management, Clean Transportation, Climate Change Adaptation, Green Building and Circular Economy.
The eligibility criteria of each category fulfil both requirements of the Scheme and the Green Loan Principles.
To ensure that the projects financed by the sustainable financing instrument meet the eligible criteria, Analogue Holdings Limited has established an evaluation and selection process with the following key elements:
Evaluation and selection
The project evaluation and selection are conducted by a Working Group which consists of cross-functional representatives and senior members, including Executive Director, CFO, representatives from Quality, Safety and Environment Department.
The Working Group is responsible to review and select eligible projects based on the criteria set and manage their environmental risks. The shortlisted projects will be presented to the Executive Directors of the Company for approval. However, we did not receive evidence of the above structure and governance process.
We consider that the applicant has well-defined internal checking procedures for project evaluation and selection.
Analogue Holdings Limited has provided information regarding the internal governance process through which the company can track allocation of funds towards green projects. Analogue Holdings Limited will establish a register of funds to contain the following information:
Information
Pending the full allocation of the proceeds, Analogue Holdings Limited intends to hold and/or invest the balance of proceeds not yet allocated in accordance with internal governance
Analogue confirmed that there is a dedicated account for the proceeds. Key transaction information, including transaction date, the principle amount of proceeds, maturity date and interest, purchase contract and/or relevant project or sales contract will be recorded. A list of eligible projects and brief descriptions of the projects will also be included, and it has internal mechanism in tracking the financial account.
Analogue follows the requirements set by the banks on demonstrating the proceeds are allocated to green projects by including relevant terms in their agreement.
Analogue Holdings Limited is committed to transparent reporting and will publish Green Finance Report and Sustainability Report within one year from the date of issuance of each sustainable financing instrument and Annual thereafter until the full allocation of the proceeds. The report will consist of information on the allocation of the proceeds and the environmental impacts of the projects.
Allocation Report
In terms of impact reporting, Analogue Holdings Limited will report on relevant environmental metrics of the projects to which the proceeds have been allocated in line with the technical requirements.
| Project Categories | Renewable Energy |
| Metrics | Calculate/ record annual GHG emission reduced/ avoided in tCO2e Calculate/ record total installed capacity of renewable energy in MWh Calculate/ record annual renewable energy generation in MWh |
| Methodologies | CIC SFCS Technical Requirements |
| Project Categories | Energy Efficiency |
| Metrics | Calculate/ record annual GHG emission reduced/ avoided in tCO2e Calculate/ record total installed capacity of renewable energy in MWh Calculate/ record annual renewable energy generation in MWh |
| Methodologies | |
| Project Categories | Pollution Prevention and Control |
| Metrics | Calculate/ record to demonstrate waste that is prevented, minimised, reused or recycled before and after the project GHG emissions from waste management before and after the project in tCO2e Amount of air pollutants reduced/ avoided (e.g. particular matter, carbon monoxide, sulfur oxides, nitrogen oxides) (tonnes) Amount of contaminated soil removed (tonnes) or area remediated Provide supporting information and calculation (if necessary) to demonstrate the carbon reduction If applicable, provide the carbon assessment result of the CIC Carbon Assessment Tool |
| Methodologies | CIC SFCS Technical Requirements |
| Project Categories | Sustainable Water and Wastewater Management |
| Metrics | Calculate/record annual reduction in water use consumption (m3 per year) Calculate/record annual volume of wastewater treated or avoided (m3 per year) Calculate/record annual amount of sewage sludge that is treated and disposed of |
| Methodologies | CIC SFCS Technical Requirements |
| Project Categories | Clean Transportation |
| Metrics | Calculate/ record annual GHG emission reduced/ avoided in tCO2e CO2 emission per distance travelled NOx emissions avoided per km. New clean transportation infrastructure built (km) Number of electric vehicle charging stations installed Air quality improvement measures (Air contaminants reduced e.g. particular matter, carbon monoxide, sulfur oxides, nitrogen oxides) (tonnes) |
| Methodologies | CIC SFCS Technical Requirements |
| Project Categories | Climate Change Adaptation |
| Metrics | Provide record to demonstrate the reduction in number of operation days lost due to climate hazard (such as flood, landslides, typhoons etc.) Provide record to demonstrate reduction in number of operating days lost to disrupted transport networks by the climate hazard (such as flood, landslides typhoon etc.) |
| Methodologies | CIC SFCS Technical Requirements |
| Project Categories | Green building |
| Metrics | Percentage of energy use reduced/ avoided compared with local baseline or building code Percentage of water reduced/avoided compared with local baseline Waste minimised, reused, recycled in percentage of total waste and/or in tonnes p.a. Calculate/record the green roof area (square meter) |
| Methodologies | CIC SFCS Technical Requirements |
| Project Categories | Circular Economy |
| Metrics | Provided the chain of custody record and certificate for specific products, timber; concrete/ steel to demonstrate the timber products are came from FSC or PEEFC or Environmental Product Declaration, etc. Provide record to demonstrate the GGBFS is replaced PFA in the concrete. Provide declare letter from the manufacturer showing the steel with recycled content. Record including photograph or test report showing that secondary raw materials of a high market value are produced and is suitable for substitution of virgin materials in production processes The percentage and/or absolute amount in tonnes p.a. of virgin raw materials that are substituted by secondary raw materials and by-products from manufacturing process |
| Methodologies | CIC SFCS Technical Requirements |
We confirmed that Analogue has committed to continue to perform use of proceeds and impact reporting with work progress on an annual basis through the Group’s financial report and sustainability report.
| Use of proceeds | Compliant |
|---|---|
| Project evaluation and selection | Compliant |
| Management of proceeds | Compliant |
| Reporting | Compliant |
Based on the above assessment, we recommend to approve the application (Application no.: SFCS-APPLY-2021-024, Certificate no.: SFCS-2021-017) of the CIC Sustainable Finance Certification Scheme with validity from 08-10-2021 to 07-10-2023 .