CITY OF OTTAWA GREEN DEBENTURE - sustainalytics.com · sustainable development. The City of Ottawa has developed a Green Debenture Framework under which it intends to issue Green

CITYOFOTTAWAGREENDEBENTURE

SECONDOPINIONBYSUSTAINALYTICS

October27,2017

www.sustainalytics.com

CharlottePeyraud(NewYork)

SeniorAssociate,InstitutionalRelations

[email protected](+1)6465180184

MeganWallingford(Toronto)

Manager,AdvisoryServices

[email protected]

(+1)6473173689

©Sustainalytics2017

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TABLEOFCONTENTS1. Introduction 3

2. Sustainalytics’Opinion 4Section1:Sustainalytics’OpinionontheCityofOttawa’sGreenDebentureFramework 4Section2:AssessmentoftheCityofOttawa’sEnvironmentalMandate 5Section3:ImpactofUseofProceeds 7Conclusion 11

APPENDICES 12

SUSTAINALYTICS 19


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1. INTRODUCTIONTheCityofOttawa(the“City”)istheNationalCapitalofCanada,andwithapopulationof970,000itisthefourth largestcity inCanadaandsecond largest intheProvinceofOntario.1 TheCity iscommittedtoadvancing “amore sustainable, resilient, and liveable future,”2 aswell as promoting environmentallysustainabledevelopment.TheCityofOttawahasdevelopedaGreenDebentureFrameworkunderwhichitintendstoissueGreenDebenturesthatwillfundenvironmentallybeneficialprojectsintheCityofOttawa.TheGreenDebentureFrameworkhasbeenpublishedbytheCityasaseparatedocumentonitswebsite.3ThenetproceedsofeachGreenDebentureissuedundertheFrameworkwillbeusedtofinance,inwholeor in part, capital projects that promote environmental sustainability across the City in an effort tomitigate and adapt to the effects of climate change, reduce greenhouse gas (GHG) emissions, andpromotethetransitiontoalow-carboneconomy.TheFrameworkoutlineseightcategoriesofeligibilityforEligibleProjects:

1) RenewableEnergy;2) EnergyEfficiency;3) PollutionPreventionandControl;4) CleanTransportation;5) SustainableWaterManagement;6) SustainableManagementofNaturalResources;7) ClimateChangeAdaptationandResilience;and8) GreenBuildings.

TheCityhasengagedSustainalyticstoprovideasecondopiniononitsframeworkandtheframework’senvironmental credentials.Aspart of this engagement, Sustainalytics held conversationswith variousmembersoftheCity’smanagementteamtounderstandthesustainabilityimpactoftheirprocessesandplanneduseofproceeds,aswellasthemanagementofproceedsandreportingaspectsoftheCityofOttawa’sGreenDebentureFramework.Sustainalyticsalsoreviewedrelevantpublicdocumentsandnon-publicinformation.FollowingthisengagementbetweentheCityandSustainalytics,someelementsoftheGreenDebentureFrameworkwereclarifiedtoensureanalignmentwiththelevelofdisclosureexpectedbyICMA’sGreenBondPrinciples,2017.ThisdocumentcontainsSustainalytics’opinionontheCityofOttawa’sGreenDebentureFrameworkandshouldbereadinconjunctionwiththatframework.

1CityofOttawaStatistics:https://ottawa.ca/en/city-hall/get-know-your-city/statistics-and-economic-profile/statistics2APlanforSustainabilityandResilience:http://ottawa.ca/calendar/ottawa/citycouncil/ec/2012/02-21/03-Document%203%20-

%20CoF_Sust%20Plan_FINAL%5B1%5D.pdf3http://ottawa.ca/en/business/doing-business-city/investor-relations


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2. SUSTAINALYTICS’OPINIONSection1:Sustainalytics’OpinionontheCityofOttawa’sGreenDebentureFramework

• TheCityofOttawa’sGreenDebentureFrameworkincludeseligibilitycriteria,suchasrenewableenergy, energy efficiency, pollution prevention and control, clean transportation, sustainablewater management, sustainable management of natural resources, climate adaptation andresilience,andgreenbuildings.AlleligibilitycriteriafortheUseofProceedsarerecognizedbytheGreenBondPrinciples2017asprojectcategorieswithenvironmentalbenefits.

• SustainalyticsisoftheviewthattheCityofOttawahasaclearandtransparentprocessforproject

evaluationandselection,whichisledbyitsCorporateServicesDepartment(CSD).TheCitywilladopt a collaborative approach and consult with external expert stakeholders including withPlanning, Infrastructure,andEconomicDevelopment,Legalandotherdepartmentsasneeded.TheCSDwillverifytheeligibilityofallprojectswiththePlanning, InfrastructureandEconomicDevelopmentDepartment,andeligibleprojectswillcomplywithallapplicablelaws,regulationsandpolicies.ForeachGreenDebenture,theCitywilldraftaby-lawwhichincludestheeligibleprojectstobefinanced,andwhichwillbeavailableontheCity’swebsite4.

• Impacts of the proceeds from Green Debentures issued under the City’s Green Debenture

Frameworkareexpectedtocontributeto:

i. AchievingtheCityofOttawa’senvironmentaltargets, includingtodecreasepercapitalemissionsby20%(from5.8to4.6equivalenttonnesofcarbondioxide)between2012and2024;andtoreducepercapitalelectricityconsumptionby6%by2020;

ii. Achievingprovincialandnational levelGHGemissiontargets, includingtheProvinceofOntario’scommitmenttoreduceGHGemissionsby15%by2020,37%by2030,and80%by 2050 (below 1990 levels); and Canada’s commitment to a 30% reduction in GHGemissionsbelow2005levelsby2030;

iii. Achieving its strategic objectives related to the environment and sustainable

transportation,asoutlinedintheCityofOttawa’s2015-2018StrategicPlan5;andiv. AchievingtheUNSustainableDevelopmentGoals,especiallygoals6,7,9,11,12,15.

• Sustainalytics notes that the City will conduct internal compliance reviews prior to the first

anniversaryofeachGreenDebentureissuance.TheCorporateServiceDepartmentwillrevieweachGreenDebenturetoensureitscompliancewiththeGreenDebentureFramework,andtheTreasurerwillprovideareportofthereview.

4http://ottawa.ca/en/business/doing-business-city/investor-relations5CityofOttawa2015-2018StrategicPlan:http://documents.ottawa.ca/sites/documents.ottawa.ca/files/documents/2015_2018_strategic_plan_en.pdf


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• SustainalyticsnotesthattheCityplanstorefineandenhance itsGreenDebentureFramework

andtheEligibilityCriteriaasandwhenadditionaldetailsofproposedprojectsbecomeavailable.

• Inordertoensureimpactsaremeaningful,SustainalyticsrecommendsthattheCityofOttawaspecifyaminimumperformanceimprovementthresholdforprojectsforeligibilitycriteriasuchasenergyefficiencyandsustainablewatermanagement,andthatitstrivetomeetthesethresholdsforimprovementsonprojectsfinancedwithdebentureproceeds.Sustainalyticsrecognizesthatmarketbestpracticewithrespecttoenergyefficiencyistoinvestintechnologiesthatensureaminimumof20-30%energyefficiencyperformanceimprovements.Withrespecttosustainablewater management, Sustainalytics recommends that the City select projects that have clearenvironmental impacts, such as pollution control and water efficiency, and that go beyondbusiness-as-usualrequirementsormeetingregulations.

• WithrespecttoitsGreenBuildingeligibilitycriteria,SustainalyticsencouragestheCityofOttawa

toalignwithmarketpracticesbyensuringprojectsmeetatleastaLEEDSilverstandard,oraimformarketbestpracticeofobtainingaLEEDGoldorPlatinumstandard,oranequivalentstandardcontainedinothernational,regional,orinternationalrecognizedthird-partycertifications.

AlignmentwithGreenBondPrinciples2017SustainalyticshasdeterminedthattheCity’sGreenDebentureFrameworkalignstothefourpillarsoftheGreenBondPrinciples2017.FordetailedinformationpleaserefertoAppendixB:GreenBond/GreenBondProgrammeExternalReviewForm.Section2:AssessmentoftheCityofOttawa’sEnvironmentalMandateContributionoftheCityofOttawa’sGreenDebentureFrameworktoitsenvironmentalmandateandcommitments.Sustainalytics has reviewed the City’s environmental mandate and commitments, including itsEnvironmentalStrategy2020andits2015-2018StrategicPlan.SustainalyticsisoftheviewthattheCityiscommittedtopromotingenvironmentallysustainabledevelopment,whilealsoreducingitsimpactonclimatechange.Specifically,thestrengthoftheCity’senvironmentalmandateisderivedfromits(1)clearenvironmental strategy including environmental commitments; (2) its action plan, which includesenvironmental objectives and associated targets that align with the aim of the Green DebentureFramework;and(3)aregionalresilienceplanthataddressesenvironmentalsustainabilityalongsidesocialand economic sustainability, where the Green Debenture eligibility criteria align with several goalsoutlinedintheplan.IntheCityofOttawa’sEnvironmentalStrategy2020,6theCityrecognizestheimportanceofprotectingandpreservingtheenvironment,andtheroleofmunicipalitiesinaddressingclimatechange.Notably,the City’s Environmental Strategy is underpinned by four goals: (1) a green city,which is one that isenvironmentallyresponsible;(2)developmentinharmonywithenvironment,wheretheuseofdeveloped

6Ottawa2020EnvironmentalStrategy:http://documents.ottawa.ca/sites/documents.ottawa.ca/files/documents/enviro_strategy_en.pdf.


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spacesismaximizedsuchthatexistinggreenspacesandsubwatershedsaremaintainedanddisturbancesareminimized;(3)focusingonwalking,cyclingandtransit,shiftingawayfromcar-orientedtransportationnetworks; and (4) ensuring clean air, water, and soils. The City also demonstrates is commitment toclimateactionandemissions reductionsasamemberof thePartners forClimateProtectionprogram(PCP)7whereithasachievedallfivemilestonesofthepartnership,atthecommunityandcorporatelevel,including creating a GHG inventory, setting reduction targets, developing a local action plan,implementingtheactionplan,andmonitoringandreportingonprogress.TheCity’scommitmenttotransitiontoalow-carboneconomyisalsoreflectedinits2015-2018StrategicPlan.8TwooftheCity’ssevenStrategicPrioritiesfor2015-2018reflectitscommitmenttoenvironmentalsustainability,addressingclimatechangeandthetransitiontoalow-carboneconomy:

• TransportationandMobility:TheCityaimstoaddresscurrentandfuturetransportationneedsof its residents, including building an environmentally sustainable light-rail transit system;promotingandprovidinginfrastructurethatsupportssafemobilityincludingcyclingandwalking,andensuringthesafety,accessibility,reliabilityandaffordabilityofpublictransit,amongotherobjectives.

• SustainableEnvironmentalServices:TheCityaimstoprovidesustainableenvironmentalservicesthatsupporttheprotectionoftheCity’snaturalassets,withinthecontextofplannedgrowth.Itsstrategicobjectivesinthisareaincludeimplementingprojectsthatprotectproperty,land,airandwater,suchas increasingforestcoverage,managingstormwater,andassessingwaterquality,amongotherprojects.

SustainalyticsviewspositivelythattheCityofOttawa,inpartnershipwiththeCityofGatineauandtheNationalCapitalCommission,havedevelopedthreecomprehensiveplansoutliningstrategies,objectives,and targets to ensure that the region achieves a “sustainable, resilient and liveable future”: TheSustainability and Resilience Plan,9 The Energy and Emissions Plan,10 and The Risk Prevention andMitigationPlan.11Notably, intheoverarchingSustainabilityandResiliencePlana long-termvisionandgoals that address all aspects of sustainability – environmental, social and economic – are outlined.SustainalyticsviewsthatthecredibilityoftheCityofOttawa’sGreenDebentureFrameworkisenhancedbythealignmentoftheFrameworkseligibilitycriteriatosixofthetenresiliencegoals(SeeAppendixAforacompletelistofresiliencegoals):

1. Energy:energyisusedefficientlyandsuppliedfromgreen,renewablesources;2. Biodiversityandecosystemhealth:ecosystemsarehealthy,protected,andsupportbiodiversity;

7PartnersforClimateProtection:https://fcm.ca/home/programs/partners-for-climate-protection/milestone-framework.htm8CityofOttawa2015-2018StrategicPlan:http://documents.ottawa.ca/sites/documents.ottawa.ca/files/documents/2015_2018_strategic_plan_en.pdf9APlanforSustainabilityandResilience:http://ottawa.ca/calendar/ottawa/citycouncil/ec/2012/02-21/03-Document%203%20-

%20CoF_Sust%20Plan_FINAL%5B1%5D.pdf10APlanforEnergyandEmissions:http://ottawa.ca/calendar/ottawa/citycouncil/ec/2012/02-21/03-Document%204%20-

%20CoF_Energy%20Plan_FINAL%5B1%5D.pdf11APlanforRiskPreventionandMitigation:http://ottawa.ca/calendar/ottawa/citycouncil/ec/2012/02-21/03-Document%205%20-

%20Ottawa_Risk%20Plan_FINAL%5B1%5D.pdf


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3. Connectivity and mobility: walking, cycling, and transit are resident’s first choice fortransportation;

4. Waterandwastewater:waterresourcesarecherished,conservedandprotected;5. Materialsandsolidwaste:wasteisreducedtowardzero;and,6. Climatechange:theregionadaptstoclimatechange.12

Overall,SustainalyticsisoftheviewthattheCityofOttawaiswell-positionedtoissueGreenDebenturesandthatsuchissuancesunderitsGreenDebentureFrameworkwillalignwith,andpositivelycontributetotheCityofOttawa’senvironmentalmandateandcommitmenttoresilience.TheCityiswellpositionedtoaddresscommonenvironmentalandsocialrisksassociatedwithprojectsSustainalytics recognizes that there are environmental and social risks associated with infrastructureprojects,suchasthedisruptionofecosystemsandbiodiversityloss;air,noise,orwaterpollutioncontrol;and the need for community approval, among others. The City of Ottawa has laws, regulations andpoliciestoaddresstheserisks(forexample,theOntarioHumanRightsCode13,theMunicipalAct,200114,theSafeDrinkingWaterAct(2002)15,andtheOntarioDrinkingWaterQualityStandards16)andwillensurethatallprojectsfundedcomplywithsuchlaws,regulations,andpolicies.Section3:ImpactofUseofProceedsAlloftheeligibilitycriteriadefinedintheCityofOttawa’sGreenDebentureFrameworkarerecognizedashavingbeneficialenvironmental impactsby theGreenBondPrinciples,2017. SustainalyticshighlightsbelowsomekeypotentialimpactsofprojectsthatmeettheeligibilitycriteriaoftheFramework.Advancing the transition toa low-carboneconomyandcontributing to theachievementof climate-relatedtargets,throughrenewableenergy,energyefficiency,andsustainablemanagementofnaturalresourcesprojects.TheCityofOttawa’sAirQualityandClimateChangeManagementPlan,17outlinesthenecessityfortheCity toachievebroad-scale improvements inenergyefficiencyandGHGemissions reduction.TheCityidentifiesboththemitigationofclimatechange(throughreducingenergydemand,fossilfueldependenceandGHGemissions)aswellas,climatechangeadaptation(includingimprovinginfrastructureresiliencyandreducingriskstostructures)withinthegoalsofitsplan.ThoughtheCityreportedin2014thatitspercapitaemissionsdroppedby20%between2004and2012,ithassetanewtargetoffurtherreducingpercapitaemissionsby anadditional 20%between2012and2024 (from5.8 to4.6equivalent tonnesofcarbondioxideperperson).Inaddition,ittargetsreducingpercapitaelectricityconsumptionby6%by2020. Finally, Sustainalytics views favourably that the City recognizes the importance of sustainably

12APlanforSustainabilityandResilience:http://ottawa.ca/calendar/ottawa/citycouncil/ec/2012/02-21/03-Document%203%20-

%20CoF_Sust%20Plan_FINAL%5B1%5D.pdf13https://www.ontario.ca/laws/statute/90h1914MunicipalAct2001:https://www.ontario.ca/laws/statute/01m25#BK11115SafeDrinkingWaterAct,2002:https://www.ontario.ca/laws/statute/02s3216OntarioDrinkingWaterQualityStandards:https://www.ontario.ca/laws/regulation/03016917AirQualityandClimateChangeManagementPlanhttp://app05.ottawa.ca/sirepub/cache/2/eviyv1ibbn3c1son0hnyvk0i/19338210192017100238283.PDF


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managingitsexistingnaturalresourcesaspartofatransitiontoalow-carboneconomy:itistargetingnonetlossofnaturalcarbonstorageareas(suchasforestandwetlands)between2012and2024.TheCityofOttawa’sclimate-relatedtargetsalignwiththeambitionsandcommitmentsoutlinedbyboththeProvinceofOntarioandtheFederalGovernmentofCanada.AttheProvinciallevel,Ontariohasbothmedium and long-termGHG emission reduction targets. In the long term, the aim is to reduceGHGemissions to80%below1990 levelsby2050,while itsmedium-termtargets include15%below1990levelsby2020and37%below1990levelsby2030.18Nationally,CanadahascommittedtoreduceitsGHGemissionsby30%below2005levelsby2030.19SustainalyticsisoftheviewthattheCity’sinvestmentinrenewableenergy,energyefficiency,andthesustainablemanagementofnaturalresourcesprojectswillcontribute local,provincialandnational levelclimate-relatedtargets,supportingatransitiontoa low-carboneconomy.Theimportanceofcleantransportationandtheimpactoftransitioningtoacleanertransportsystem.AmongthemajoreconomicsectorsinCanada,thetransportationsectoristhesecondhighestemitterofGHG emissions, accounting for an estimated 23% of emissions (2014).20.Meanwhile, the province ofOntarioestimatesthattransportationisthehighest-emittingsectorintheprovince,accountingfor35%oftotalemissions(2013)ofwhich70%isduetoautomobilesandtrucks.21Asreflectedinnationalandprovincial level commitments, moving toward a low-carbon economy necessitates transitioning to acleanertransportationsystem. This includesshiftingto lower-emittingmodesoftransport,expandingpublictransportationsystems,andincreasingtheavailabilityofzero-emissionsvehicles.2223In linewithprovincialandnationalcommitments,theCityofOttawarecognizestheneedtoshifttoacleaner transportation system,whereprotecting theenvironment is a keyelement thatunderpins itstransportation vision.24 An environmentally sustainable transit system is also one of seven strategicpriorities in the City’s 2015-2018 Strategic Plan.25 Aligned with national and provincial findings,transportation,especiallyduetoarelianceonprivatevehiclesforcommuting,accountsforasignificantportionofemissionsintheCity,estimatedat40%in2012.26TheCityhasalreadytakensignificantstepsto improveitstransportsystembyinvesting inmajorpublictransitprojectsthatareexpectedtohavepositiveenvironmental impacts. Forexample,theCity iscurrentlyexpanding its light-rail transit (LRT)system,addinganadditional30km,whichisexpectedtoresultin70%ofCityresidentswithin5kmofaccessingtheLRT.Anticipatedsocialandenvironmentalbenefitsincludeadecreaseinroadcongestionofapproximatelyonesixthoftotalvehiclekilometrestravelledby2031;anestimatedfuelsavingsof50

18Ontario’sClimateStrategy:https://dr6j45jk9xcmk.cloudfront.net/documents/4928/climate-change-strategy-en.pdf19Canada’s2017NationallyDeterminedContributionSubmissiontotheUnitedNationsFrameworkConventiononClimateChange:

http://www4.unfccc.int/ndcregistry/PublishedDocuments/Canada%20First/Canada%20First%20NDC-Revised%20submission%202017-05-11.pdf20Pan-CanadianFrameworkonCleanGrowthandClimateChange:https://www.canada.ca/content/dam/themes/environment/documents/weather1/20170125-

en.pdf21Ontario’sFive-YearClimateChangeActionPlan:http://www.applications.ene.gov.on.ca/ccap/products/CCAP_ENGLISH.pdf22Ontario’sFive-YearClimateChangeActionPlan:http://www.applications.ene.gov.on.ca/ccap/products/CCAP_ENGLISH.pdf23Pan-CanadianFrameworkonCleanGrowthandClimateChange:https://www.canada.ca/content/dam/themes/environment/documents/weather1/20170125-

en.pdf24Ottawa:TransportationMasterPlan:http://documents.ottawa.ca/sites/documents.ottawa.ca/files/documents/tmp_en.pdf25CityofOttawa2015-2018StrategicPlan:http://documents.ottawa.ca/sites/documents.ottawa.ca/files/documents/2015_2018_strategic_plan_en.pdf26AirQualityandClimateChangeManagementPlan:http://app05.ottawa.ca/sirepub/cache/2/eviyv1ibbn3c1son0hnyvk0i/19338210192017100238283.PDF


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millionlitres,and,by2048,areductioninGHGemissionsbyover110thousandtonnesandofcriticalaircontaminants(CACs)byover3,000tonnes27.TheCityofOttawahasindicatedtoSustainalyticsthatitintendstofinanceacleantransportationproject,specifically its LRT project, with the City’s first Green Debenture. Sustainalytics is of the view thatinvestmentsincleantransportationprojects,includingpublictransitprojectslikeitscurrentLRTproject,arealignedwithitsoverallenvironmentalmandate,aswellasprovincialandnationalcommitmentstotransitiontoacleanertransportsystem,andwillpositivelycontributeto local,nationalandprovincialGHGreductiontargets. TheimportanceofclimatechangeadaptationandresilienceprojectsSustainalytics believes the City’s investment in projects related to the redesigning, retrofitting andupgradingofinfrastructureandbuildingstobuildresilienceforextremeweathereventswillsupporttheCity in adapting to climate change and its impact. The City of Ottawa is facing a rising annualmeantemperature, andaccording to theProvinceofOntario’s ‘middleof the road’predictions theaveragetemperatureacrosstheprovincewillincreasebetween2.5-3.7degreeCelsiusby2050(baseline1990).InOttawa,thesechangesinclimateareexpectedtocauseincreasedfrequency,durationandintensityofprecipitation including snow, rain and ice storms; increased variability and intensity of temperatureincludingheatwavesand cold snaps; and, changes inwinddirectionand speed. TheCityanticipatessignificantimpacttoinfrastructuresuchasseverestormsdamagingpowerinfrastructure,aswellasroads,bridges and buildings; heavy rain fall causing flooding that exceeds the current capacity ofmunicipalinfrastructure; more extreme variability in temperatures which may damage paved surfaces andtransportationinfrastructure;andincreaseddroughtscausingdamagetobuildingfoundations.28 AlignmentwithandcontributiontotheUNSustainableDevelopmentGoalsAgreed tobyheadsof states inSeptember2015, theUnitedNations’SustainableDevelopmentGoals(SDGs)provideabroadandcomprehensivesvisionforasustainablesociety,andoutlineprioritiesandanagenda for achieving sustainable development by 2030. The use of proceeds of the City’s GreenDebentureFrameworkalignwithandadvancethefollowingSDGsandtargets:

UseofProceedsCategory SDG SDGtarget

RenewableEnergy 7.AffordableandCleanEnergy

7.2 - By 2030, increase substantially the share ofrenewableenergyintheglobalenergymix.

EnergyEfficiency 7.AffordableandCleanEnergy9.Industry,Innovation,andInfrastructure

7.3By2030,doubletheglobalrateofimprovementinenergyefficiency9.4 - By 2030, upgrade infrastructure and retrofitindustriestomakethemsustainable,withincreasedresource-use efficiency and greater adoption ofcleanandenvironmentallysoundtechnologiesand

27Stage2OttawaLRT:BusinessCase:http://www.stage2lrt.ca/wp-content/uploads/2015/09/Doc_7_Business_Case.pdf28ManagingRisksThroughAdaptation:http://app05.ottawa.ca/sirepub/cache/2/p5u2vvmijqqbholllvc3fg4c/1933941020201702533739.PDF


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industrialprocesses,withallcountriestakingactioninaccordancewiththeirrespectivecapabilities.

PollutionPreventionandControl

6.CleanWaterandSanitation11.SustainableCitiesandCommunities12.ResponsibleConsumption&Production

6.3 By 2030, improve water quality by reducingpollution, eliminating dumping and minimizingrelease of hazardous chemicals and materials,halvingtheproportionofuntreatedwastewaterandsubstantially increasing recycling and safe reuseglobally11.6 By 2030, reduce the adverse per capitaenvironmentalimpactofcities,includingbypayingspecial attention to air quality andmunicipal andotherwastemanagement12.5 - By 2030, substantially reduce wastegenerationthroughprevention,reduction,recyclingandreuse.

CleanTransportation

11.SustainableCitiesandCommunities

11.2 -By2030,provideaccess to safe, affordable,accessibleandsustainabletransportsystemsforall,improvingroadsafety,notablybyexpandingpublictransport, with special attention to the needs ofthose in vulnerable situations, women, children,personswithdisabilitiesandolderpersons.

SustainableWaterManagement

6.CleanWaterandSanitation 6.1-By2030,achieveuniversalandequitableaccesstosafeandaffordabledrinkingwaterforall.6.3 - By 2030, improve water quality by reducingpollution, eliminating dumping and minimizingrelease of hazardous chemicals and materials,halvingtheproportionofuntreatedwastewater and substantially increasingrecyclingandsafereuseglobally.

SustainableManagementofNaturalResources

15.LifeonLand 15.1By2020,ensuretheconservation,restorationand sustainable use of terrestrial and inlandfreshwater ecosystems and their services, inparticular forests, wetlands, mountains anddrylands,inlinewithobligationsunderinternationalagreements.15.2 By 2020, promote the implementation ofsustainablemanagementofalltypesofforests,haltdeforestation, restore degraded forests andsubstantially increase afforestation andreforestationglobally

ClimateChangeAdaptationandResilience

9.Industry,InnovationandInfrastructure11.SustainableCitiesandCommunities

9.4 By 2030, upgrade infrastructure and retrofitindustriestomakethemsustainable,withincreasedresource-use efficiency and greater adoption ofcleanandenvironmentallysoundtechnologiesandindustrialprocesses,withallcountriestakingactioninaccordancewiththeirrespectivecapabilities


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11.5 By 2030, significantly reduce the number ofdeaths and the number of people affected andsubstantially decrease the direct economic lossesrelativetoglobalgrossdomesticproductcausedbydisasters, includingwater-related disasters,with afocus on protecting the poor and people invulnerablesituations

GreenBuildings 7.AffordableandCleanEnergy11.SustainableCitiesandCommunities

7.3By2030,doubletheglobalrateofimprovementinenergyefficiency11.6 By 2030, reduce the adverse per capitaenvironmentalimpactofcities,includingbypayingspecial attention to air quality andmunicipal andotherwastemanagement

Referto:https://sustainabledevelopment.un.org/?menu=1300ConclusionTheCityofOttawa, through itsGreenDebentureFramework,aims to invest inprojects thatpromoteenvironmentallysustainabledevelopmentandthetransitiontoalow-carboneconomy,andthatmitigateandadapttotheeffectsofclimatechange.TheFrameworkidentifieseighteligiblecategoriestowhichbondproceedsmaybedirected:(1)renewableenergy;(2)energyefficiency;(3)pollutionpreventionandcontrol; (4) clean transportation; (5) sustainable watermanagement; (6) sustainablemanagement ofnaturalresources;(7)climatechangeadaptationandresilience;and(8)greenbuildings.SustainalyticsisoftheviewthattheFrameworkisalignedwithandwillhaveapositiveimpactontheCityofOttawa’senvironmental and resilience mandate and commitments. It is also aligned with and will advancesustainabledevelopmentprioritiesincludingsixoftheUNSustainableDevelopmentGoals.Furthermore, theCityofOttawa’sGreenDebentureFramework is alignedwith the fourpillarsof theGreen Bond Principles 2017 (see Appendix B), which addresses use of proceeds, process for projectevaluationandselection,managementofproceeds,andreporting.Basedontheaboveconsiderations,SustainalyticsisoftheviewthattheCityofOttawa’sGreenDebentureFrameworkisrobustandcredible.


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APPENDICESAppendixA:OverviewoftheTenGoalsOutlinedinthePlanforSustainabilityandResilienceinCanada’sCapitalRegion

Source:http://ottawa.ca/calendar/ottawa/citycouncil/ec/2012/02-21/03-Document%203%20-%20CoF_Sust%20Plan_FINAL%5B1%5D.pdf


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AppendixB:GreenBond/GreenBondProgrammeExternalReviewForm

GreenBond/GreenBondProgrammeExternalReviewForm

Section1. BasicInformation

Issuername:TheCityofOttawa

GreenBondISINorIssuerGreenBondFrameworkName,ifapplicable:CityofOttawaGreenDebentureFramework

Reviewprovider’sname:Sustainalytics

Completiondateofthisform:10-26-2017

Section2. Reviewoverview

SCOPEOFREVIEW

ThereviewassessedthefollowingelementsandconfirmedtheiralignmentwiththeGBPs:

☒ UseofProceeds ☒ ProcessforProjectEvaluationandSelection☒ ManagementofProceeds ☒ Reporting

ROLE(S)OFREVIEWPROVIDER☒ Consultancy(incl.2ndopinion) ☐ Certification

☐ Verification ☐ Rating

☐ Other(pleasespecify):

EXECUTIVESUMMARYOFREVIEWand/orLINKTOFULLREVIEW(ifapplicable)PleaserefertoGreenBondFramework(postedinaseparatedocument)andSecondOpinionDocumentabove.


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Section3. Detailedreview1.USEOFPROCEEDSOverallcommentonsection(ifapplicable):TheCityofOttawa,throughitsGreenDebentureFramework,aimstoinvestinprojectsthatpromoteenvironmentallysustainabilitydevelopmentandthetransitiontoalow-carboneconomy,andmitigateandadapttotheeffectsofclimatechange.TheFrameworkidentifieseighteligiblecategoriestowhichbondproceedsmaybedirected:(1)renewableenergy;(2)energyefficiency;(3)pollutionpreventionandcontrol;(4)cleantransportation;(5)sustainablewatermanagement;(6)sustainablemanagementofnaturalresources;(7)climatechangeadaptationandresilience;and(8)greenbuildings.SustainalyticsisoftheviewthattheseeligibilitycriteriaalignwithandwillhaveapositiveimpactontheCityofOttawa’senvironmentalandresiliencemandateandcommitments,andisalignedwithandwilladvancesustainabledevelopmentprioritiesincludingsixoftheUNSustainableDevelopmentGoals.

UseofproceedscategoriesasperGBP:

☒ Renewableenergy

☒ Energyefficiency

☒ Pollutionpreventionandcontrol

☒ Sustainablemanagementoflivingnaturalresources

☐ Terrestrialandaquaticbiodiversityconservation

☒ Cleantransportation

☒ Sustainablewatermanagement

☒ Climatechangeadaptation

☐ Eco-efficientproducts,productiontechnologiesandprocesses

☒ Other(pleasespecify):GreenBuildings

☐ UnknownatissuancebutcurrentlyexpectedtoconformwithGBPcategories,orothereligibleareasnotyetstatedinGBPs

Ifapplicablepleasespecifytheenvironmentaltaxonomy,ifotherthanGBPs:

2.PROCESSFORPROJECTEVALUATIONANDSELECTIONOverallcommentonsection(ifapplicable):SustainalyticsisoftheviewthattheCityofOttawahasaclearandtransparentprocessforprojectevaluationandselection,whichisledbyitsCorporateServicesDepartment(CSD).TheCitywilladoptacollaborativeapproachandconsultwithotherexternalexpertstakeholdersincludingwithPlanning,Infrastructure,andEconomicDevelopment,Legalandotherdepartmentsasneeded.TheCSDwillverifytheeligibilityofallprojectswiththePlanning,InfrastructureandEconomicDevelopmentDepartment,andeligibleprojectswillcomplywithall


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applicablelaws,regulationsandpolicies.ForeachGreenDebenture,theCitywilldraftaby-lawwhichincludestheeligibleprojectstobefinanced,andwhichwillbeavailableontheCity’swebsite.

Evaluationandselection

☒ DefinedandtransparentcriteriaforprojectseligibleforGreenBondproceeds

☒ Documentedprocesstodeterminethatprojectsfitwithindefinedcategories

☐ Summarycriteriaforprojectevaluationandselectionpubliclyavailable


InformationonResponsibilitiesandAccountability

☐ Evaluation/Selectioncriteriasubjecttoexternaladviceorverification

☒ In-houseassessment


3.MANAGEMENTOFPROCEEDSOverallcommentonsection(ifapplicable):TheCityofOttawawillapplytheproceedsofaGreenDebenturedirectlytoaprojecttorepaythebridgefinancingoftheCity.Inmostcases,theCityexpectsthatcapitalprojectswillhavebeendevelopedandsubstantialcompletioncriteriamet.Incaseswheresubstantialcompletionhasnotbeenachieved,theCitywillholdthefundsinaCityaccountandinvesttheholdingswithmaturitiesthatalignwiththesubstantialcompletionoftheprojects.Shouldexcessfundsexistincaseswhensubstantialcompletionhasbeenachieved,theCitywillapplythefundstootherprojectsthatmeettheeligibilitycriteriaundertheGreenDebentureFramework.Sustainalyticsisoftheopinionthatthisisinlinewithmarketpractices.

Trackingofproceeds:

☒ GreenBondproceedssegregatedortrackedbytheissuerinasystematicmanner

☒ Disclosureofintendedtypesoftemporaryinvestmentinstrumentsforunallocatedproceeds


Additionaldisclosure:

☒ Allocationstofutureinvestmentsonly ☐ Allocationstobothexistingandfutureinvestments

☐ Allocationtoindividualdisbursements ☒ Allocationtoaportfolioofdisbursements

☒ Disclosureofportfoliobalanceofunallocatedproceeds


4.REPORTING


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Overallcommentonsection(ifapplicable):TheCityofOttawa’sCorporateServicesDepartmentisresponsibleforcoordinatingreportingrequirements.TheCitywillreportannuallyonitswebsitebothallocationandimpactreportingincludinginformationonwhichprojectshavebeenfundedbyaGreenDebenture;informationonthedistributionofunspentdebentures;projectstatusreportforeligibleprojects;keyperformanceindicatorswhenpossible;andasummaryoftheCity’sgreenbonddevelopmentsincludingexistingandfutureprojects.SustainalyticsisoftheopinionthattheCityofOttawa’sreportinganddisclosureisinlinewithmarketpractices.

Useofproceedsreporting:

☐ Project-by-project ☐ Onaprojectportfoliobasis

☐ Linkagetoindividualbond(s) ☒ Other(pleasespecify):TheCityofOttawahasindicatedthatitsfirstGreenDebenturemayfundisLRT;however,futureGreenDebenturesmayincludeaportfolioofprojects.

Informationreported:

☒Allocatedamounts ☐ GBfinancedshareoftotalinvestment

☐Other(pleasespecify):

Frequency:

☒Annual ☐ Semi-annual


Impactreporting:

☒ Project-by-project ☐ Onaprojectportfoliobasis

☐ Linkagetoindividualbond(s) ☐ Other(pleasespecify):

Frequency:

☒Annual ☐ Semi-annual


Informationreported(expectedorex-post):

☒GHGEmissions/Savings ☒ EnergySavings

☒OtherESGindicators(pleasespecify):amountofenergygeneratedfromrenewables,amountofpollutantsoremissionsreduced,amountofwastedivertedfromlandfills,


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numberofpassengerjourneysusinggreentransportation,watersaved,areaofnaturalassetsconserved,protectedorrestored,listofeligiblebuildingsreceivingthirdpartyverifiedgreenbuildingcertifications.

MeansofDisclosure

☐ Informationpublishedinfinancialreport ☐ Informationpublishedinsustainabilityreport

☐ Informationpublishedinadhocdocuments

☒ Other(pleasespecify):informationtobepublishedontheCityofOttawa’swebsite.

☐ Reportingreviewed(ifyes,pleasespecifywhichpartsofthereportingaresubjecttoexternalreview):

Whereappropriate,pleasespecifynameanddateofpublicationintheusefullinkssection.USEFULLINKS(e.g.toreviewprovidermethodologyorcredentials,toissuer’sdocumentation,etc.)SPECIFYOTHEREXTERNALREVIEWSAVAILABLE,IFAPPROPRIATEType(s)ofReviewprovided:

☒ Consultancy(incl.2ndopinion) ☐ Certification

☐ Verification/Audit ☐ Rating


Reviewprovider(s): Dateofpublication:ABOUTROLE(S)OFREVIEWPROVIDERSASDEFINEDBYTHEGBP(i) ConsultantReview:Anissuercanseekadvicefromconsultantsand/orinstitutionswithrecognized

expertiseinenvironmentalsustainabilityorotheraspectsoftheissuanceofaGreenBond,suchas theestablishment/reviewofan issuer’sGreenBondframework.“Secondopinions”mayfallintothiscategory.

(ii) Verification:AnissuercanhaveitsGreenBond,associatedGreenBondframework,orunderlyingassets independentlyverifiedbyqualifiedparties, suchasauditors. Incontrast tocertification,verification may focus on alignment with internal standards or claims made by the issuer.Evaluation of the environmentally sustainable features of underlying assets may be termed


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verificationandmayreferenceexternalcriteria.

(iii) Certification:AnissuercanhaveitsGreenBondorassociatedGreenBondframeworkorUseofProceeds certified against an external green assessment standard. An assessment standarddefinescriteria,andalignmentwithsuchcriteriaistestedbyqualifiedthirdparties/certifiers.

(iv) Rating:AnissuercanhaveitsGreenBondorassociatedGreenBondframeworkratedbyqualifiedthirdparties,suchasspecializedresearchprovidersorratingagencies.GreenBondratingsareseparatefromanissuer’sESGratingastheytypicallyapplytoindividualsecuritiesorGreenBondframeworks/programmes.

Disclaimer All rights reserved. No part of this second party opinion (the “Opinion”) may be reproduced, transmitted or published in any form or by any means without the prior written permission of Sustainalytics. The Opinion was drawn up with the aim to explain why the analyzed bond is considered sustainable and responsible. 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, Sustainalytics does not warrant that the information presented in this Opinion is complete, accurate or up to date. 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, this Opinion shall in no event 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.


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SUSTAINALYTICS Sustainalytics is an independent ESG and corporate governance research, ratings and analysis firm supporting investors around the world with the development and implementation of responsible investment strategies. With 13 offices globally, Sustainalytics partners with institutional investors who integrate environmental, social and governance information and assessments into their investment processes. Today, the firm has more than 300 staff members, including 170 analysts with varied multidisciplinary expertise of more than 40 sectors. Through the IRRI survey, investors selected Sustainalytics as the best independent responsible investment research firm for three consecutive years, 2012 through 2014 and in 2015, Sustainalytics was named among the top three firms for both ESG and Corporate Governance research. The firm was also named the Best SRI or Green Bond Research Firm by Global Capital in 2015 and Most Impressive Second Opinion Provider in 2017. For more information, visit www.sustainalytics.com Sustainalytics [email protected]

Best SRI or Green Bond Research or Rating Firm

Most Impressive Second Opinion Provider