Second-Party Opinion

State of the Netherlands Green Bond
Framework
Evaluation Summary
Sustainalytics is of the opinion that the State of the Netherlands Green Bond Framework
is credible and impactful and aligns with the four core components of the Green Bond
Principles 2018. This assessment is based on the following:
The eligible categories for the use of proceeds are
aligned with those recognized by the Green Bond Principles.
Sustainalytics considers that expenditures related to renewable
energy, energy efficiency, clean transportation, climate change
adaptation & sustainable water management will lead to positive
environmental impacts and advance the UN Sustainable
Development Goals (7) Affordable and Clean Energy, (9) Industry,
Innovation and Infrastructure, (11) Sustainable Cities and
Communities and (13) Climate Action.
The State of the Netherlands’
internal process for evaluating and selecting expenditures is aligned
with market practice. Potential expenditures are initially screened by
the Dutch State Treasury Agency (DSTA) before being evaluated and
selected during the annual review carried out by the Green Bond
Working Group, which is comprised of representatives from the DSTA,
Ministry of Finance, Ministry of Economic Affairs and Climate Policy,
and Ministry of Infrastructure and Water Management.
The State of the Netherlands will
annually review the expenditure level of eligible expenditures and will
decide how proceeds are allocated to these expenditures. The State
of the Netherlands intends to allocate at least 50% of net proceeds to
eligible expenditures in the budget year of issuance or future years.
while up to 50% of an issuance could be allocated to government
expenditures realized in the budget year preceding issuance.
Expenditures are tracked based on the National Financial Annual
Reporting. Unallocated proceeds will be managed according to the
treasury policy of the Dutch State and proceeds will be tracked and
reviewed until full allocation. The Dutch State’s processes for
management of proceeds are aligned with market practice.
The State of the Netherlands intends to publish an
allocation report annually, within three months following the
publication of the National Financial Annual Report. The report will
include an overview of the allocation of Green bond proceeds to the
eligible expenditure categories, a breakdown of allocation per
expenditure category and the unallocated proceeds (if any). Impact
reporting will be published annually in an impact report and will
provide information on the relevant impact categories. Sustainalytics
views the State of the Netherlands’ allocation and impact reporting as
aligned with market practice.

© Sustainalytics 2019

Evaluation date

18 March 2019

Issuer Location

The Hague,
Netherlands

Report Sections
Introduction.................................................. 2
Sustainalytics’ Opinion ................................ 3
Appendices ................................................ 10

For inquiries, contact the Sustainable Finance
Solutions project team:
Joshua Zakkai (Amsterdam)
Project Manager
joshua.zakkai@sustainalytics.com
(+31) 20 205 00 79
Lili Hocke (Amsterdam)
Project Manager
lili.hocke@sustainalytics.com
(+31) 20 205 00 40
Evan Bruner (Amsterdam)
Project Support
evan.bruner@sustainalytics.com
(+31) 20 205 00 27
Jean-Claude Berthelot (Amsterdam)
Client Relations
Jean-claude.berthelot@sustainalytics.com
(+31) 20 205 00 15

Second-Party Opinion

State of the Netherlands Green Bond

Introduction
The State of the Netherlands (the Netherlands, the Dutch State or “the country”), has developed the State of
the Netherlands Green Bond Framework (the “Framework”) under which it intends to issue green bonds and
use the proceeds to finance and refinance, in whole or in part, existing and future government expenditures
that promote the Netherlands’ realization of policy objectives aimed at decarbonizing the country’s energy,
housing and transportation sector, while building resilience to climate change. The Framework defines
eligibility criteria in four areas:
1.
2.
3.
4.

Renewable Energy
Energy Efficiency
Clean Transportation
Climate Change Adaptation & Sustainable Water Management

The State of the Netherlands engaged Sustainalytics to review the State of the Netherlands Green Bond
Framework, dated 15 March 2019, and to provide a second-party opinion on the Framework’s environmental
credentials and its alignment with the Green Bond Principles 2018 (GBP).1 This Framework has been published
in a separate document.2
As part of this engagement, Sustainalytics held conversations with various members of the Dutch State
Treasury Agency’s (DSTA) management team and received input from relevant government ministries to
understand the sustainability impact of State processes and planned use of proceeds, as well as management
of proceeds and reporting aspects of the Dutch State’s green bond. Sustainalytics also reviewed relevant
public documents and non-public information.
This document contains Sustainalytics’ opinion of the Dutch State Treasury Agency Green Bond Framework
and should be read in conjunction with that Framework.

1 The Green Bond Principles are administered by the International Capital Market Association and are available at https://www.icmagroup.org/green-

social-and-sustainability-bonds/green-bond-principles-gbp/
2 The State of the Netherlands Green Bond Framework is available on the Dutch government’s website at: https://english.dsta.nl/subjects/g/greenbonds
2

Second-Party Opinion

State of the Netherlands Green Bond

Sustainalytics’ Opinion
Section 1: Sustainalytics’ Opinion on the State of the Netherlands Green Bond
Framework
Sustainalytics is of the opinion that the State of the Netherlands Green Bond Framework is credible and
impactful and aligns with the four core components of the Green Bond Principles 2018. Sustainalytics
highlights the following elements of the State of the Netherlands Green Bond Framework:
Use of Proceeds:
•
The eligible use of proceeds categories Renewable Energy, Energy Efficiency, Clean Transportation,
Climate Change Adaptation & Sustainable Water Management – are recognized as impactful by the Green
Bond Principles 2018. Sustainalytics views positively the inclusion of both climate change mitigation and
adaptation measures in the Framework. Investments in renewable energy, energy efficiency and clean
transportation will support the transition towards a low carbon economy, while climate change adaptation
and water management expenditures will build the Netherlands’ resilience to the physical impacts of
climate change.
•
The State of the Netherlands intends to use the net proceeds of the bond to finance and refinance
government expenditures made within the budget year preceding the issuance of the green bonds, the
budget year of issuance and future budget years. Furthermore, a maximum of 50% of an issuance can be
applied to expenses incurred during the previous budget year.
•
Sustainalytics highlights that all expenditures eligible under the framework must comply with the sector
criteria of the Climate Bonds Standard. Furthermore, the State of the Netherlands has confirmed to
Sustainalytics that it intends to have all bonds issued under the framework certified by the Climate Bonds
Initiative (CBI). Sustainalytics views this as a robust practice that will facilitate alignment with a 2-degree
global warming scenario, consistent with the commitments set out in the Paris Agreement.
•
For renewable energy, the eligible expenditures fall under Economic Affairs and Climate Policy, Article 4,
“An Efficient Energy Supply and Limiting Climate Change,” portion of the National Budget. The Dutch State
has confirmed to Sustainalytics that, with regards to renewable energy, the first issuance under the State
of the Netherlands Green Bond Framework will only include expenditures for offshore wind and solar in
the form of subsidies to the operators of the renewable energy facilities under the Netherlands’ SDE
subsidy programme.3 In future issuances, other types of renewable energy expenditures might be
pursued, but the Dutch State would ensure alignment with the CBI standard through certification prior to
using green bond proceeds to finance these expenditures.
•
For energy efficiency, the main eligible central government budget code is included in article 4.1, “Energy
Transition and Sustainability” for the built environment. While the Netherlands envisions possible future
investments for both the commercial and residential building sector, the Dutch State has confirmed to
Sustainalytics that the first issuance will focus on subsidies that are part of the Incentive Scheme for
Energy Performance in the Rental Sector (STEP). STEP awards subsidies for refurbishments of rental
housing, with the goal of improving buildings’ Energy Index (EI)/Energy Performance Certificate (EPC) by
at least two steps.4 As part of the programme homes must be visited by a registered Energy Performance
Advisor (EPA) in order to verify compliance with the energy efficiency improvements required by the
programme. Sustainalytics views this approach as credible and highlights the accountability mechanism
facilitated through on-site checks by qualified assessors to ensure energy performance objectives are
achieved.
•
Expenditures under clean transportation relate to project management, maintenance, planning and
construction of the Dutch rail network, ranging from noise reduction, safety improvements and passenger
accessibility to building new stations, improving the frequency of trains, addressing railway bottlenecks
and enhancing the overall convenience for railway passengers, as well as supporting sustainable
infrastructure such as bicycle parking.
3 The Promotion of Sustainable Energy Production (SDE subsidy programme provides an operating subsidy to producers of electricity from wind, solar,

biomass and hydro facilities. The purpose of the subsidy is to compensate for pricing differentials between the cost of produ ction and market prices.
SDE description available at: http://www.rijksbegroting.nl/2019/voorbereiding/begroting,kst248548_15.html
4 The STEP subsidy requirements require a minimum improvement of two energy-index steps, but only grant subsidy when this also results in an
improvement of a minimum of two EPC energy label steps. STEP requirements available at: https://www.rvo.nl/subsidiesregelingen/stimuleringsregeling-energieprestatie-huursector-step/voorwaarden-step/particulieren
3

Second-Party Opinion

State of the Netherlands Green Bond

•

Expenditures under Climate Change Adaptation & Sustainable Water Management include measures
financed by the Dutch Deltafund that improve and ensure the Dutch flood defense, water infrastructure,
fresh water supply and quality as well as preparedness of the systems for climate change, such as
freshwater reserves for droughts. For more information on impact, see section 3.

Project Selection Process:
•
The project evaluation and selection process for eligible expenditures is the responsibility of the interdepartmental Green Bond Working Group and takes place on an annual basis. While the State of the
Netherlands prepares an initial list of projects, the Green Bond Working Group reviews the feasibility of
including the expenditures, verifies if the expenditures comply with the criteria and definition of Eligible
Green Expenditures of the Framework and approves the selected expenditures. The Green Bond Working
Group is comprised of representatives from the Dutch State Treasury Agency (who is the Chair), Ministry
of Finance, Ministry of Economic Affairs and Climate Policy and Ministry of Infrastructure and Water
Management. Sustainalytics notes the broad representation of the Working Group, including stakeholders
from relevant ministries, and considers this approach to be aligned with market practice.
Management of Proceeds:
•
The Dutch State will monitor the expenditure levels of Eligible Green Expenditures and will allocate the
proceeds of issued green bonds to Eligible Green Expenditures on an annual basis. This approach is
based on realized expenditure levels as reported in the National Financial Annual Report. The allocation
of the use of proceeds will be reviewed and approved by the Green Bond Working Group on an annual
basis until full allocation. The unallocated proceeds will be managed according to the treasury policy of
the DSTA. Sustainalytics considers that this process is in line with market practice.
Reporting:
•
In line with market practice, the State of the Netherlands commits to publishing an allocation report. The
allocation report will be published within three months following the release of the National Financial
Annual Report of the year of issuance of the inaugural green bond,5 containing: (i) an overview of the
allocation of issued green bonds to the main categories of Eligible Green Expenditures, (ii) a breakdown
of allocated proceeds per type of expenditures and (iii) the amount of unallocated proceeds (if any).
Moreover, the State of the Netherlands commits to annually update the allocation report until full
allocation of green bond proceeds.
•
The Netherlands also commits to publishing an impact report addressing the positive environmental
impact of Eligible Green Expenditures across the eligible categories of renewable energy, energy
efficiency, clean transportation and climate change adaptation and water management. Result indicators
and environmental impact indicators are included for all categories:
o Renewable Energy
▪
Result indicators: Number of projects; Number of projects split per renewable energy
technology; total subsidized renewable energy capacity (in MW);
▪
Environmental indicators: Annual GHG emission avoidance (in CO2 equivalent) savings;
actual energy production (in MWh)
o Energy Efficiency
▪
Result indicators: Number of applications; number of houses upgraded for energy
performance
▪
Environmental indicator: Annual energy savings (in MWh); Annual Greenhouse Gas
emissions reduction in (in CO2 equivalent)
o Clean Transportation
▪
Result indicator: Realized projects (case studies); KM of infrastructure maintained
▪
Environmental indicator: Annual passenger train kilometers
o Climate Change Adaptation & Water Management
▪
Result indicator: Total km and percentage of dykes reinforced to a safe level; Number
and percentage of flood defenses reinforced to a safe level
▪
Environmental indicator: Availability of flood defenses (kilometers); Reduction of flood
risk/frequency
•
The Dutch State will also provide updates caused by time-lags in the publication of specific environmental
impact indicators. This reporting is in line with market practice.

5 The publication of the National Financial Annual Report takes place annually on the third Wednesday of May.

4

Second-Party Opinion

State of the Netherlands Green Bond

Alignment with Green Bond Principles 2018
Sustainalytics has determined that the Netherlands’ Green Bond Framework aligns to the four core
components of the Green Bond Principles 2018. For detailed information please refer to Appendix 1: Green
Bond/Green Bond Programme External Review Form.

Section 2: Sustainability Strategy of the Issuer
Contribution of the Framework to the sustainability strategy of the State of the Netherlands
The Netherlands climate change strategy aligns with the ambition to achieve the well below 2-degree target
outlined by the Paris Agreement. The EU has established a goal of 40% reduction of GHG by 2030 compared
to 1990 levels,6 but the Netherlands has set its own national target at 49% reduction and calls for a 55%
reduction at the EU level by 2030.7 Should these targets prove too ambitious for the EU, the Netherlands will
strive to make agreements with like-minded countries in northwest Europe on pursuing more ambitious
targets than required under EU country allocations.8
As a country that is vulnerable to the effects of climate change and, specifically, sea level rise, climate
adaptation plays an important role in the Netherlands. On the national level, the Delta Programme has been
established to ensure that flood risk management, freshwater supply, and spatial planning will be climateproof and water-resilient by 2050. Additionally, to mitigate the impact of flooding, drought and temperature
changes, the programme has developed a spatial plan to provide the government with an overview of which
regions are most vulnerable to extreme weather conditions.
Furthermore, the Dutch State has acknowledged the importance of the green bond market and recognizes the
need for closing the investment gap that is required for enabling climate targets to be reached.9 Having
established quantitative and time-bound targets for greenhouse gas reduction, renewable energy and energy
efficiency, Sustainalytics believes that by investing in projects such as wind and solar energy, energy efficiency
in the built environment, passenger railway infrastructure and the Dutch Delta Programme, the Dutch State is
well positioned to issue green bonds and that these green bonds will contribute to national and EU climate
change mitigation and adaptation goals and strategies.
Well positioned to address common environmental and social risks associated with the expenditures
Advances in renewable energy, energy efficiency, clean transportation, climate change adaptation and
sustainable water management are of critical importance to reduce GHG emissions and improve climate
change resilience of the Netherlands. With that said, Sustainalytics recognizes that the eligible activities can
have associated negative externalities, such as biodiversity loss, community relations risks related to large
infrastructure projects and the health and safety of employees working on that infrastructure.
As a sovereign, the programmes and projects financed are strictly regulated by government policies and
procedures required in the Netherlands. Associated risks are mitigated by the following regulations:
•

Land use change and biodiversity loss
o According to the Dutch Environmental Impact Assessment Decree “Besluit
milieueffectrapportage” an Environmental Impact Assessment (EIA) must be carried out
prior to project development for certain activities, including offshore wind projects, the
construction of new railways.10 Additionally, evaluations on the need for an EIA must be

6 2030 Climate & Energy Framework available at: https://ec.europa.eu/clima/policies/strategies/2030_en
7 Dutch PM calls for more ambitious 2030 EU climate target, available at: https://www.climatechangenews.com/2018/03/05/dutch-pm-calls-ambitious-

2030-eu-climate-target/
8 Coalition Agreement “Confidence in the future” available at: https://www.kabinetsformatie2017.nl/documenten/verslagen/2017/10/10/coalitionagreement-confidence-in-the-future
9 Dutch State will issue a Green Bond available at: https://english.dsta.nl/news/news/2018/10/31/dutch-state-will-issue-a-green-bond
10 EIA Decree (2018) see Part C for list of activities that require a mandatory EIA.
5

Second-Party Opinion

State of the Netherlands Green Bond

•

•

conducted for coast line changes.11 In an environmental performance review conducted by
the OECD in 2015, the country has been recognized for is strong environmental protection
policies.12
Stakeholder engagement
o The Dutch government has legislation requiring stakeholder consultation.13 Legislation
provides legal rights to stakeholders to voice their opinion and/or challenge project
development decisions that may have a direct impact on them. There are two phases for
stakeholder participation (1) during the initial decision-making phases, before the decision
has been made and (2) after a decision has made, stakeholders can challenge in an
administrative procedure “bestuursrecht”, which is then ultimately decided by the courts.
Currently, legislation is under revision and a more integrated planning law called
Omgevingswet, which is expected to be implemented in 2021.14 The Dutch government
acknowledges that stakeholder participation is crucial for project success.15
Worker health and safety issues
o Dutch health and safety regulations require employers to develop health and safety policies
that meet minimum requirements set by the government and provide a safe working place,
identify and mitigate potential safety hazards, and provide proper training and education.16
The most relevant legislation for this Green Bond is the Working conditions law, or
Arbeidsomstandighedenwet (Arbowet),17 which requires that an official inspector
supervises and assesses compliance with the legislation. The law holds employers and
employees collectively responsible for ensuring safe working conditions. Employers and
employees create health and safety procedures that are then submitted to the government.

Sustainalytics is of the opinion that the policies and procedures described above are adequate for mitigating
the environmental and social risks associated with the development of large-scale renewable energy, clean
transportation and water infrastructure.

Section 3: Impact of Use of Proceeds
All four use of proceeds categories are recognized as impactful by the GBP. Sustainalytics has focused
below on where the impact is specifically relevant in local context.
Relevance of Renewable Energy for the Energy Mix of the Netherlands
Between 1990 and 2017, energy consumption in the Netherlands has increased by almost 10%.18 In 2017,
fossil fuels made up around 92% of total energy consumption, while the remaining 8% was produced from
mostly nuclear and renewable energy sources.19 The Netherlands’ climate objectives involve achieving 14%
sustainable energy by 2020, 16% by 2023 and almost 100% by 2050, while also aiming to reduce its CO 2
emissions by 80-95% compared to 1990.20 In order to reach its goals, the Netherlands launched its Energy
Agenda up to 2050, which outlines the way towards a low-carbon energy supply for three decades by using

11 State of the Netherlands Environmental Impact Assessment Decree available at:

https://www.infomil.nl/onderwerpen/integrale/mer/procedurehandleiding/wanneer-beoordeling/besluit-0/ ;
https://wetten.overheid.nl/BWBR0006788/2018-07-01
12 OECD Environmental Performance Review of the Netherlands available at: http://www.oecd.org/environment/country-reviews/2958654.pdf
13 There are several laws related to stakeholder participation, available at: Wet ruimtelijke ordening (https://wetten.overheid.nl/BWBR0020449/2018-0701#Hoofdstuk2); Waterwet (https://wetten.overheid.nl/BWBR0024779/2018-07-28#Hoofdstuk6); Wet geluidshinder
(https://wetten.overheid.nl/BWBR0024779/2018-07-28#Hoofdstuk6); Tracewet https://wetten.overheid.nl/BWBR0006147/2017-05-01).
14 Omgevingswet available at: https://aandeslagmetdeomgevingswet.nl/omgevingswet/
15 Stakeholder Participation for MNP available at:
https://www.pbl.nl/en/publications/2008/StakeholderParticipationGuidancefortheNetherlandsEnvironmentalAssessme ntAgency_MainDocument
16 OSH Wiki – Netherlands available at: https://oshwiki.eu/wiki/OSH_system_at_national_level_-_Netherlands
17 Arbowet
18 Energy consumption hardly changed in 2017; published April 2018; https://www.cbs.nl/en-gb/news/2018/16/energy-consumption-hardly-changed-in2017
19 Energy consumption hardly changed in 2017; published April 2018; https://www.cbs.nl/en-gb/news/2018/16/energy-consumption-hardly-changed-in2017
20 Central government encourages sustainable energy; Government of the Netherlands; accessed February 2019;
https://www.government.nl/topics/renewable-energy/central-government-encourages-sustainable-energy
6

Second-Party Opinion

State of the Netherlands Green Bond

safe, reliable and affordable energy sources.21 Moreover, the Netherlands Enterprise Agency has also
supported the production of national renewable energy through the Stimulation of Sustainable Energy
Production (SDE and SDE+) programme, which provides compensation to producers that generate renewable
energy.22 Across 2017 the use of renewable energy has significantly risen compared to 2016, increasing the
solar energy production by 60% and wind generation by 30%.23 The Dutch government announced the
extension of the programme in 2020 through SDE++, with the aim of continuing support for a decarbonized
energy sector.24
Given the context, Sustainalytics considers that the Netherlands’ subsidy programme for renewable energy
production as a key element that will facilitate ongoing generation capacity, facilitating the country’s transition
towards a low-carbon economy, while supporting the achievement of climate-related goals.
Energy Efficiency in the context of the Netherlands’ climate goals
Approximatively 15% of the total CO2 emissions in the Netherlands are produced from the electricity and gas
utilized in homes and other buildings.25 The Netherlands’ goals in terms of climate change mitigation are to
reach a reduction in GHG emissions of 49% by 2030 and of 95% by 2050. 26 In order to reach these targets, the
Government of the Netherlands has launched several programmes aimed at increasing the national energy
efficiency of buildings, such as the Energy Investment Allowance (EIA),27 Energy Performance Incentive
(STEP) and Energy-saving Fund (FEH),28 which financially support building owners through incentives. The
DSTA has confirmed to Sustainalytics that STEP will account for all energy efficiency expenditures financed
by the inaugural green bond issuance.
Sustainalytics recognizes the importance of energy efficiency gains and their contribution towards energy
efficiency goals. By using proceeds to support the implementation of an incentive scheme for increased
energy efficiency in the rental sector, Sustainalytics believes that the DSTA Green Bond can contribute to
energy efficiency improvements and a reduction of carbon emissions in the Dutch building stock.
Importance of Clean Transportation in Mitigating GHG Emissions
The transportation sector in the Netherlands contributes around 20% of the total GHG emissions of the
country,29 which increased by 9% in 2016 compared to 1990 levels.30 Railways’ share of the total GHG
emissions from the transportation sector amounts to only 0.3%.31 Of note is the fact that 91% of passenger
rail in the Netherlands is fully electrified, covering 96.3% of the total tonnes/km travelled.32 The Dutch State
confirmed to Sustainalytics that the emissions intensity of its passenger rail lines was approximately 6gCO2
per p-km, further highlighting the importance of maintaining the efficiency of the system and ensuring the
appropriate frequency of trains to accommodate passenger travel. It is expected that the use of public railway

21 Central government encourages sustainable energy; Government of the Netherlands; accessed February 2019;

https://www.government.nl/topics/renewable-energy/central-government-encourages-sustainable-energy
22 Stimulation of Sustainable Energy Production (SDE+); Netherlands Enterprise Agency; accessed February 2019; https://english.rvo.nl/subsidiesprogrammes/sde
23 Netherlands – Energy; published October 2018; https://www.export.gov/article?id=Netherlands-Energy
24Broadening SDE+, the Government of the Netherlands, accessed March 2019; https://www.rvo.nl/subsidies-regelingen/stimulering-duurzameenergieproductie
25 Measures to reduce greenhouse gas emissions; Government of the Netherlands; accessed February 2019; https://www.government.nl/topics/climatechange/national-measures
26 Dutch parliament to set target of 95 percent CO2 reduction by 2050; published June 2018; https://www.reuters.com/article/us-netherlandsclimatechange-law/dutch-parliament-to-set-target-of-95-percent-co2-reduction-by-2050-idUSKBN1JN1X5
27 Energy Investment Allowance (EIA); Government of the Netherlands; accessed February 2019; https://business.gov.nl/subsidy/energy-investmentallowance/
28 Energy Performance Incentive (STEP) and Energy-saving Fund (FEH) rented sector; Netherlands Enterprise Agency; accessed February 2019;
https://business.gov.nl/subsidy/energy-performance-incentive-energy-saving-fund-rented-sector/
29 CO2 emissions from transport (% of total fuel combustion); The World Bank; accessed February 2019;
https://data.worldbank.org/indicator/EN.CO2.TRAN.ZS?locations=NL
30 Greenhouse Gas Emissions in the Netherlands 1990-2016. National Inventory Report 2018; National Institute for Public Health and the Environment;
published 2018; https://www.rivm.nl/bibliotheek/rapporten/2018-0006.pdf
31 Greenhouse Gas Emissions in the Netherlands 1990-2016. National Inventory Report 2018; National Institute for Public Health and the Environment;
published 2018; https://www.rivm.nl/bibliotheek/rapporten/2018-0006.pdf
32 According to information provided by the State of the Netherlands.
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State of the Netherlands Green Bond

transport will grow by 1% per year.33 The two main mobility policies set in place34 are aimed at facilitating
growth in the use of public transportation and tackling of congestion.35 To facilitate progress on both tracks
it is necessary to maintain the frequency of trains and quality of passenger experience. Moreover, in its
programme called ‘Together We Can Achieve a Carbon Neutral Rail Service’, the rail sector committed to
achieving a carbon neutral footprint by 2050 36 and to achieving an annual energy reduction of 2%. Additionally,
the government also strives to promote site-specific renewable energy generation when building and
managing stations.37 Considering the above, Sustainalytics positively views the DSTA’s investments in clean
transportation, as they are expected to contribute to the continued operation of a passenger rail network that
is 91% electrified with targets for carbon neutrality and increasing energy efficiency. Moreover, DSTA’s clean
transportation expenditures would also support the Netherlands in achieving its climate goals noted in the
impact sections concerning renewable energy and energy efficiency.
Climate Change Prevention and Sustainable Water Management in the Netherlands
As a country that lies 60% below sea level, the Netherlands has been exposed to flood risk and the dangers of
high waters for centuries. With increases in sea level rise, combined with possible changes in storm surges
and increased river discharge, climate change poses a major threat for a low-lying delta region like the
Netherlands. The Dutch government has acknowledged that flood protection is already inadequate in some
areas today. In order to mitigate the increasing risk of flooding, the Netherlands is implementing its 2016
National Climate Adaptation Strategy (NAS). The strategy focuses on several climate change related topics,
including the potential failure of critical infrastructure networks, such as dikes, barriers and pumps as a result
of extreme weather events.38The Delta Programme was launched by the Dutch government with the goal of
promoting flood risk management, and ensuring that the freshwater supply and spatial planning are climateproof and water-resilient by 2050.39 The programme document, which is publicly accessible,40 outlines a
detailed strategy for addressing flood risk and flood defence issues.
Given the regional context of the Netherlands, Sustainalytics is of the opinion that the expenditures of the
Delta Programme will directly contribute to flood risk management and climate-resilient spatial planning. The
investments will also have reinforcing, and complementary impacts related to the realization of related
programmes noted above.
Alignment with/contribution to SDGs
The Sustainable Development Goals (SDGs) were set in September 2015 and form an agenda for achieving
sustainable development by the year 2030. This green bond advances the following SDG goals and targets:
Use of Proceeds
Category
Renewable Energy
Energy Efficiency

Clean
Transportation

SDG

SDG target

7. Affordable and
Clean Energy
7. Affordable and
Clean Energy

7.2 By 2030, increase substantially the share of renewable
energy in the global energy mix
7.3 By 2030, double the global rate of improvement in
energy efficiency

11. Sustainable Cities
and Communities
9. Industry, Innovation
and Infrastructure

11.1 By 2030, ensure access for all to adequate, safe and
affordable housing and basic services and upgrade slums
9.4 By 2030, upgrade infrastructure and retrofit industries
to make them sustainable, with increased resource-use
efficiency and greater adoption of clean and
environmentally sound technologies and industrial

33 Public transport; Ministry of Transport, Public Works and Water Management; accessed February 2019;
34 The Netherland’s two primary mobility policies are Nota Mobiliteit (2004) ‘Towards reliable and predictable accessibility’ and Mobiliteitsaanpak (2008)

‘Safely and smoothly from door to door’, available at: https://www.wegenwiki.nl/Nota_Mobiliteit and
https://assets.amsterdam.nl/publish/pages/865232/mobiliteitsaanpak_amsterdam_2030.pdf
35 Public transport; Ministry of Transport, Public Works and Water Management; accessed February 2019;
36 Transfer to 2040. Flexible and smart public transport; Ministry of Infrastructure and Water Management;
37 Sustainable public transport; Government of the Netherlands; accessed February 2019; https://www.government.nl/topics/mobility-public-transportand-road-safety/public-transport/goals-of-public-transport/sustainable-public-transport
38 Climate Adapt. Netherlands; accessed February 2019; https://climate-adapt.eea.europa.eu/countries-regions/countries/netherlands
39 What is the Delta Programme?; Delta Programme Commissioner; accessed February 2019; https://english.deltacommissaris.nl/deltaprogramme/what-is-the-delta-programme
40 Delta Programme (2019) available at: https://english.deltacommissaris.nl/binaries/deltacommissioner/documents/publications/2018/09/18/dp2019-en-printversie/DP2019+EN+printversie.pdf
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Second-Party Opinion

State of the Netherlands Green Bond

11. Sustainable Cities
and Communities

Climate Change
Adaptation &
Sustainable Water
Management

13. Climate Action

processes, with all countries taking action in accordance
with their respective capabilities
11.2 By 2030, provide access to safe, affordable,
accessible and sustainable transport systems for all,
improving road safety, notably by expanding public
transport, with special attention to the needs of those in
vulnerable situations, women, children, persons with
disabilities and older persons
13.1 Strengthen resilience and adaptive capacity to
climate-related hazards and natural disasters in all
countries
13.2 Integrate climate change measures into national
policies, strategies and planning

Conclusion
The State of the Netherlands Green Bond framework will contribute to important sustainability goals for
renewable energy, energy efficiency, clean transportation, climate change adaptation and sustainable water
management. The proceeds will be used to finance a range of budget expenditures, including those supporting
wind and solar energy generation; subsidies for the improvement of residential buildings’ energy profiles; new
national and regional railway infrastructure and improvements to existing infrastructure and flood defenses.
The use of proceeds, project selection and evaluation, management of proceeds and reporting processes are
all aligned with market practice. Additionally, the Dutch State will seek CBI verification for its first issuance
and all future issuances under this framework, a step that will help to ensure that all future financing of budget
expenditures through green bond proceeds are aligned with, at most, a 2-degree global warming scenario, in
alignment with the Paris Agreement. Based on the above, Sustainalytics is of the opinion that the State of the
Netherlands is well-positioned to issue green bonds and that the State of the Netherlands Green Bond
Framework is credible, impactful and aligned with the GBP principles.

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State of the Netherlands Green Bond

Appendices
Appendix 1: Green Bond / Green Bond Programme - External Review Form
Section 1. Basic Information
Issuer name:
Green Bond ISIN or Issuer Green Bond Framework
Name, if applicable: [specify as appropriate]

State of the Netherlands
The State of the Netherlands Green Bond
Framework

Review provider’s name:

Sustainalytics

Completion date of this form:

18 March 2019

Publication date of review publication: [where

appropriate, specify if it is an update and add
reference to earlier relevant review]

Section 2. Review overview
SCOPE OF REVIEW
The following may be used or adapted, where appropriate, to summarize the scope of the review.
The review assessed the following elements and confirmed their alignment with the GBPs:

☒

Use of Proceeds

☒

Process for Project Evaluation and
Selection

☒

Management of Proceeds

☒

Reporting

ROLE(S) OF REVIEW PROVIDER
☒

Consultancy (incl. 2nd opinion)

☐

Certification

☐

Verification

☐

Rating

☐

Other (please specify):
Note: In case of multiple reviews / different providers, please provide separate forms for each
review.

EXECUTIVE SUMMARY OF REVIEW and/or LINK TO FULL REVIEW (if applicable)
Please refer to Evaluation Summary above.
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Section 3. Detailed review
Reviewers are encouraged to provide the information below to the extent possible and use the comment
section to explain the scope of their review.
1. USE OF PROCEEDS
Overall comment on section (if applicable):

The eligible use of proceeds categories Renewable Energy, Energy Efficiency, Clean Transportation, Climate
Change Adaptation & Sustainable Water Management – are recognized as impactful by the Green Bond
Principles 2018. Sustainalytics views positively the inclusion of both climate change mitigation and
adaptation measures in the Framework. Investments in renewable energy, energy efficiency and clean
transportation will support the transition towards a low carbon economy, while climate change adaptation
and water management expenditures will build the Netherlands’ resilience to the physical impacts of climate
change.
The State of the Netherlands intends to use the net proceeds of the bond to finance and refinance
government expenditures made within the budget year preceding the issuance of the green bonds, the
budget year of issuance and future budget years. Furthermore, a maximum of 50% of an issuance can be
applied to expenses incurred during the previous budget year.
Sustainalytics highlights that all expenditures eligible under the framework must comply with the sector
criteria of the Climate Bonds Standard. Furthermore, the State of the Netherlands has confirmed to
Sustainalytics that it intends to have all bonds issued under the framework certified by the Climate Bonds
Initiative (CBI). Sustainalytics views this as a robust practice that will facilitate alignment with a 2-degree
global warming scenario, consistent with the commitments set out in the Paris Agreement.
For renewable energy, the eligible expenditures fall under Economic Affairs and Climate Policy, Article 4, “An
Efficient Energy Supply and Limiting Climate Change,” portion of the National Budget. The Dutch State has
confirmed to Sustainalytics that, with regards to renewable energy, the first issuance under the State of the
Netherlands Green Bond Framework will only include expenditures for offshore wind and solar in the form of
subsidies to the operators of the renewable energy facilities under the Netherlands’ SDE subsidy
programme. In future issuances, other types of renewable energy expenditures might be pursued, but the
Dutch State would ensure alignment with the CBI standard through certification prior to using green bond
proceeds to finance these expenditures.
For energy efficiency, the main eligible central government budget code is included in article 4.1, “Energy
Transition and Sustainability” for the built environment. While the Netherlands envisions possible future
investments for both the commercial and residential building sector, the Dutch State has confirmed to
Sustainalytics that the first issuance will focus on subsidies that are part of the Incentive Scheme for Energy
Performance in the Rental Sector (STEP). STEP awards subsidies for refurbishments of rental housing, with
the goal of improving buildings’ Energy Index (EI)/Energy Performance Certificate (EPC) by at least two
steps. As part of the programme homes must be visited by a registered Energy Performance Advisor (EPA)
in order to verify compliance with the energy efficiency improvements required by the programme.
Sustainalytics views this approach as credible and highlights the accountability mechanism facilitated
through on-site checks by qualified assessors to ensure energy performance objectives are achieved.
Expenditures under clean transportation relate to project management, maintenance, planning and
construction of the Dutch rail network, ranging from noise reduction, safety improvements and passenger
accessibility to building new stations, improving the frequency of trains, addressing railway bottlenecks and
enhancing the overall convenience for railway passengers, as well as supporting sustainable infrastructure
such as bicycle parking. Of note is the fact that 91% of passenger rail in the Netherlands is fully electrified,
covering 96.3% of the total tonnes/km travelled. The Dutch State confirmed to Sustainalytics that the
emissions intensity of its commuter rail lines was approximately 6gCO2 per p-km, further highlighting the

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Second-Party Opinion

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importance of maintaining the efficiency of the system and ensuring the appropriate frequency of trains to
accommodate passenger travel .
Expenditures under Climate Change Adaptation & Sustainable Water Management include measures
financed by the Dutch Deltafund that improve and ensure the Dutch flood defense, water infrastructure,
fresh water supply and quality as well as preparedness of the systems for climate change, such as
freshwater reserves for droughts. Sustainalytics notes the Netherlands’ high exposure to the physical
impacts of climate change and the associated importance of financing investments in adaptation and water
management . For more information on impact, see section 3.
Use of proceeds categories as per GBP:
☒

Renewable energy

☒

Energy efficiency

☐

Pollution prevention and control

☐

Environmentally sustainable management of
living natural resources and land use

☐

Terrestrial and aquatic biodiversity
conservation

☒

Clean transportation

☒

Sustainable water and wastewater
management

☒

Climate change adaptation

☐

Eco-efficient and/or circular economy
adapted products, production technologies
and processes

☐

Green buildings

☐

Unknown at issuance but currently expected
to conform with GBP categories, or other
eligible areas not yet stated in GBPs

☐

Other (please specify):

If applicable please specify the environmental taxonomy, if other than GBPs:

2. PROCESS FOR PROJECT EVALUATION AND SELECTION
Overall comment on section (if applicable):
The project evaluation and selection process for eligible expenditures is the responsibility of the interdepartmental Green Bond Working Group and takes place on an annual basis. While the State of the
Netherlands prepares an initial list of projects, the Green Bond Working Group reviews the feasibility of
including the expenditures, verifies if the expenditures comply with the criteria and definition of Eligible
Green Expenditures of the Framework and approves the selected expenditures. The Green Bond Working
Group is comprised of representatives from the Dutch State Treasury Agency (who is the Chair), Ministry of
Finance, Ministry of Economic Affairs and Climate Policy and Ministry of Infrastructure and Water
Management. Sustainalytics notes the broad representation of the Working Group, including stakeholders
from relevant ministries, and considers this approach to be aligned with market practice.
Evaluation and selection
☒

Credentials on the issuer’s environmental
sustainability objectives

☒

Documented process to determine that
projects fit within defined categories

☒

Defined and transparent criteria for projects
eligible for Green Bond proceeds

☒

Documented process to identify and
manage potential ESG risks associated
with the project
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Second-Party Opinion

State of the Netherlands Green Bond

☒

Summary criteria for project evaluation and
selection publicly available

☐

Other (please specify):

☒

In-house assessment

Information on Responsibilities and Accountability
☐

Evaluation / Selection criteria subject to
external advice or verification

☐

Other (please specify):

3. MANAGEMENT OF PROCEEDS
Overall comment on section (if applicable):
The Dutch State will monitor the expenditure levels of Eligible Green Expenditures and will allocate the
proceeds of issued green bonds to Eligible Green Expenditures on an annual basis. This approach is based
on realized expenditure levels as reported in the National Financial Annual Report. The allocation of the use
of proceeds will be reviewed and approved by the Green Bond Working Group on an annual basis until full
allocation. The unallocated proceeds will be managed according to the treasury policy of the DSTA.
Sustainalytics considers that this process is in line with market practice.
Tracking of proceeds:
☒

Green Bond proceeds segregated or tracked by the issuer in an appropriate manner

☒

Disclosure of intended types of temporary investment instruments for unallocated
proceeds

☐

Other (please specify):

Additional disclosure:
☐

Allocations to future investments only

☒

Allocations to both existing and future
investments

☐

Allocation to individual disbursements

☒

Allocation to a portfolio of
disbursements

☐

Disclosure of portfolio balance of
unallocated proceeds

☐

Other (please specify):

4. REPORTING
Overall comment on section (if applicable):

The Netherlands also commits to publishing an impact report addressing the positive environmental impact
of Eligible Green Expenditures across the eligible categories of renewable energy, energy efficiency, clean
transportation and climate change adaptation and water management.

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Second-Party Opinion

State of the Netherlands Green Bond

Use of proceeds reporting:
☐

Project-by-project

☒

On a project portfolio basis

☐

Linkage to individual bond(s)

☐

Other (please specify):

Information reported:
☒

Allocated amounts

☐

Other (please specify):

☒

Green Bond financed share of total
investment

☐

Semi-annual

Frequency:
☒

Annual

☐

Other (please specify):

Impact reporting:
☐

Project-by-project

☒

On a project portfolio basis

☐

Linkage to individual bond(s)

☐

Other (please specify):

Frequency:
☒

Annual

☐

Other (please specify):

☐

Semi-annual

Information reported (expected or ex-post):
☒

GHG Emissions / Savings

☒

Energy Savings

☐

Decrease in water use

☐

Other ESG indicators (please specify):
•
•
•
•

Actual annual energy
production (in MWh)
Annual passenger train KM
Availability of flood defenses
(percentage)
Reduction of flood
risk/frequency

Means of Disclosure
☒

Information published in financial report

☐

Information published in ad hoc
☐
documents
Reporting reviewed (if yes, please specify which parts of the reporting are subject to
external review):

☐

☒

Information published in sustainability
report
Other (please specify):

Where appropriate, please specify name and date of publication in the useful links section.
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Second-Party Opinion

State of the Netherlands Green Bond

USEFUL LINKS (e.g. to review provider methodology or credentials, to issuer’s documentation, etc.)

http://www.rijksbegroting.nl/2019/voorbereiding/begroting,kst248548_15.html
https://www.rvo.nl/subsidies-regelingen/stimuleringsregeling-energieprestatiehuursector-step/voorwaarden-step/particulieren
https://english.dsta.nl/news/news/2018/10/31/dutch-state-will-issue-a-green-bond
https://www.infomil.nl/onderwerpen/integrale/mer/procedurehandleiding/wanneerbeoordeling/besluit-0/ ; https://wetten.overheid.nl/BWBR0006788/2018-07-01
https://wetten.overheid.nl/BWBR0020449/2018-07-01#Hoofdstuk2
https://wetten.overheid.nl/BWBR0024779/2018-07-28#Hoofdstuk6
https://wetten.overheid.nl/BWBR0006147/2017-05-01
https://aandeslagmetdeomgevingswet.nl/omgevingswet/
https://www.pbl.nl/en/publications/2008/StakeholderParticipationGuidancefortheNethe
rlandsEnvironmentalAssessmentAgency_MainDocument
https://www.government.nl/topics/renewable-energy/central-government-encouragessustainable-energy
https://english.rvo.nl/subsidies-programmes/sde
https://www.rvo.nl/subsidies-regelingen/stimulering-duurzame-energieproductie
https://www.government.nl/topics/climate-change/national-measures
https://business.gov.nl/subsidy/energy-investment-allowance/
https://business.gov.nl/subsidy/energy-performance-incentive-energy-saving-fundrented-sector/
https://www.rivm.nl/bibliotheek/rapporten/2018-0006.pdf
https://www.wegenwiki.nl/Nota_Mobiliteit
https://assets.amsterdam.nl/publish/pages/865232/mobiliteitsaanpak_amsterdam_20
30.pdf
https://www.government.nl/topics/mobility-public-transport-and-road-safety/publictransport/goals-of-public-transport/sustainable-public-transport
https://english.deltacommissaris.nl/delta-programme/what-is-the-delta-programme
https://english.deltacommissaris.nl/binaries/deltacommissioner/documents/publications/2018/09/18/dp2019-enprintversie/DP2019+EN+printversie.pdf

SPECIFY OTHER EXTERNAL REVIEWS AVAILABLE, IF APPROPRIATE
Type(s) of Review provided:
☐

Consultancy (incl. 2nd opinion)

☒

Certification

☐

Verification / Audit

☐

Rating

☐

Other (please specify):

Review provider(s):

Date of publication:

ABOUT ROLE(S) OF INDEPENDENT REVIEW PROVIDERS AS DEFINED BY THE GBP
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Second-Party Opinion

State of the Netherlands Green Bond

i.

Second Party Opinion: An institution with environmental expertise, that is independent from the issuer may
issue a Second Party Opinion. The institution should be independent from the issuer’s adviser for its Green
Bond framework, or appropriate procedures, such as information barriers, will have been implemented within
the institution to ensure the independence of the Second Party Opinion. It normally entails an assessment of
the alignment with the Green Bond Principles. In particular, it can include an assessment of the issuer’s
overarching objectives, strategy, policy and/or processes relating to environmental sustainability, and an
evaluation of the environmental features of the type of projects intended for the Use of Proceeds.

ii.

Verification: An issuer can obtain independent verification against a designated set of criteria, typically
pertaining to business processes and/or environmental criteria. Verification may focus on alignment with
internal or external standards or claims made by the issuer. Also, evaluation of the environmentally
sustainable features of underlying assets may be termed verification and may reference external criteria.
Assurance or attestation regarding an issuer’s internal tracking method for use of proceeds, allocation of
funds from Green Bond proceeds, statement of environmental impact or alignment of reporting with the GBP,
may also be termed verification.

iii.

Certification: An issuer can have its Green Bond or associated Green Bond framework or Use of Proceeds
certified against a recognized external green standard or label. A standard or label defines specific criteria,
and alignment with such criteria is normally tested by qualified, accredited third parties, which may verify
consistency with the certification criteria.

iv.

Green Bond Scoring/Rating: An issuer can have its Green Bond, associated Green Bond framework or a key
feature such as Use of Proceeds evaluated or assessed by qualified third parties, such as specialised research
providers or rating agencies, according to an established scoring/rating methodology. The output may include
a focus on environmental performance data, the process relative to the GBP, or another benchmark, such as
a 2-degree climate change scenario. Such scoring/rating is distinct from credit ratings, which may
nonetheless reflect material environmental risks.

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Second-Party Opinion

State of the Netherlands Green Bond

Disclaimer
© Sustainalytics 2019. All rights reserved.
The intellectual property rights to this Second-Party Opinion (the “Opinion”) are vested exclusively in
Sustainalytics. Unless otherwise expressly agreed in writing by Sustainalytics, no part of this Opinion may be
reproduced, disseminated, comingled, used to create derivative works, furnished in any manner, made
available to third parties or published, parts hereof or the information contained herein in any form or in any
manner, be it electronically, mechanically, through photocopies or recordings, nor publicly released without
the “Green Bond Framework” in conjunction with which this Opinion has been developed.
The Opinion was drawn up with the aim to provide objective information on why the analyzed bond is
considered sustainable and responsible, and is intended for investors in general, and not for a specific investor
in particular. Consequently, this Opinion is for information purposes only and Sustainalytics will not accept
any form of liability for the substance of the opinion and/or any liability for damage arising from the use of
this Opinion and/or the information provided in it.
As the Opinion is based on information made available by the client, the information is provided “as is” and,
therefore Sustainalytics does not warrant that the information presented in this Opinion is complete, accurate
or up to date, nor assumes any responsibility for errors or omissions. Any reference to third party names is
for appropriate acknowledgement of their ownership and does not constitute a sponsorship or endorsement
by such owner.
Nothing contained in this Opinion shall be construed as to make a representation or warranty, express or
implied, regarding the advisability to invest in or include companies in investable universes and/or portfolios.
Furthermore, nothing contained in this Opinion shall be construed as an investment advice (as defined in the
applicable jurisdiction), nor be interpreted and construed as an assessment of the economic performance and
credit worthiness of the bond, nor to have focused on the effective allocation of the funds’ use of proceeds.
The client is fully responsible for certifying and ensuring its commitments’ compliance, implementation and
monitoring.
In case of discrepancies between the English language and translated versions, the English language version
shall prevail.

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Second-Party Opinion

State of the Netherlands Green Bond

Sustainalytics
Sustainalytics is a leading independent ESG and corporate governance research, ratings and analytics firm
that support investors around the world with the development and implementation of responsible investment
strategies. With 13 offices globally, the firm partners with institutional investors who integrate ESG
information and assessments into their investment processes. Spanning 30 countries, the world’s leading
issuers, from multinational corporations to financial institutions to governments, turn to Sustainalytics for
second-party opinions on green and sustainable bond frameworks. Sustainalytics has been certified by the
Climate Bonds Standard Board as a verifier organization, and supports various stakeholders in the
development and verification of their frameworks. In 2015, Global Capital awarded Sustainalytics “Best SRI or
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Second Party Opinion Provider. The firm was recognized as the “Largest External Reviewer” by the Climate
Bonds Initiative as well as Environmental Finance in 2018, and in 2019 was named the “Largest Approved
Verifier for Certified Climate Bonds” by the Climate Bonds Initiative. In addition, Sustainalytics received a
Special Mention Sustainable Finance Award in 2018 from The Research Institute for Environmental Finance
Japan for its contribution to the growth of the Japanese Green Bond Market.
For more information, visit www.sustainalytics.com
Or contact us info@sustainalytics.com

18