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"DNVGL"isatradingnameofDNVGLBusinessAssuranceServicesUKLimited,awhollyownedsubsidiaryofDNVGLBusinessAssuranceGroupASandDNVGLGroupAS.
RegisteredOffice:4thfloor,VivoBuilding,London,SE19LSwww.
dnvgl.
comTDBANKGREENBOND2DNVGLELIGIBILITYASSESSMENTScopeandObjectivesTDBankGroup,N.
A.
(henceforthreferredtoas"TDBank")isaleadingCanadianmultinationalbankingandfinancialservicescorporationheadquarteredinToronto.
TDBankisintendingtoissueasecondGreenBondinthetotalrangeofUSDOneBillion(henceforthreferredtoas"theBond").
ThepurposeoftheBondistofinance/refinanceTDBank'sloansandprojectsin17projectcategories,aslistedintheSchedule1ofthisreview.
DNVGLBusinessAssuranceServicesLimited(henceforthreferredtoas"DNVGL")hasbeencommissionedbyTDBanktoprovideaGreenBondeligibilityassessmentontheTDBankGreenBond.
Ourmethodologytoachievethisisdescribedunder'WorkUndertaken'below.
Wewerenotcommissionedtoprovideindependentassuranceorotherauditactivities.
NoassuranceisprovidedregardingthefinancialperformanceoftheBond,thevalueofanyinvestmentsintheBond,orthelongtermenvironmentalbenefitsofthetransaction.
OurobjectivehasbeentoprovideanassessmentthattheBondhasmetthecriteriaestablishedonthebasissetoutbelow.
ResponsibilitiesoftheManagementofTDBankandDNVGLThemanagementofTDBankhasprovidedtheinformationanddatausedbyDNVGLduringthedeliveryofthisreview.
OurstatementrepresentsanindependentopinionandisintendedtoinformTDBank'smanagementandotherinterestedstakeholdersintheBondastowhethertheestablishedcriteriahavebeenmet,basedontheinformationprovidedtous.
InourworkwehavereliedontheinformationandthefactspresentedtousbyTDBank.
DNVGLisnotresponsibleforanyaspectoftheprojectsorassetsreferredtointhisopinionandcannotbeheldliableifestimates,findings,opinions,orconclusionsareincorrect.
Thus,DNVGLshallnotbeheldliableifanyoftheinformationordataprovidedbyTDBank'smanagementandusedasabasisforthisassessmentwerenotcorrectorcomplete.
BasisofDNVGL'sopinionWehaveadaptedourgreenbondeligibilityassessmentmethodologytocreateTDBank-specificGreenBondEligibilityAssessmentProtocol(henceforthreferredtoas"Protocol")-seeSchedule2.
OurProtocolincludesasetofsuitablecriteriathatcanbeusedtounderpinDNVGL'sopinion.
Page2of9AsperourProtocol,thecriteriaagainstwhichtheBondhasbeenreviewedaregroupedunderthefourPrinciples:PrincipleOne:UseofProceeds.
TheUseofProceedscriteriaareguidedbytherequirementthatanissuerofagreenbondmustusethefundsraisedtofinanceeligibleactivities.
Theeligibleactivitiesshouldproduceclearenvironmentalbenefits.
PrincipleTwo:ProcessforProjectEvaluationandSelection.
TheProjectEvaluationandSelectioncriteriaareguidedbytherequirementsthatanissuerofagreenbondshouldoutlinetheprocessitfollowswhendeterminingeligibilityofaninvestmentusingGreenBondproceeds,andoutlineanyimpactobjectivesitwillconsider.
PrincipleThree:ManagementofProceeds.
TheManagementofProceedscriteriaareguidedbytherequirementsthatagreenbondshouldbetrackedwithintheissuingorganization,thatseparateportfoliosshouldbecreatedwhennecessaryandthatadeclarationofhowunallocatedfundswillbehandledshouldbemade.
PrincipleFour:Reporting.
TheReportingcriteriaareguidedbytherecommendationthatatleastannualreportingtothebondinvestorsshouldbemadeoftheuseofbondproceedsandthatquantitativeand/orqualitativeperformanceindicatorsshouldbeused,wherefeasible.
WorkundertakenOurworkconstitutedahighlevelreviewoftheavailableinformation,basedontheunderstandingthatthisinformationwasprovidedtousbyTDBankingoodfaith.
Wehavenotperformedanauditorotherteststochecktheveracityoftheinformationprovidedtous.
Theworkundertakentoformouropinionincluded:CreationofaTDBank-specificProtocol,adaptedtothepurposeoftheBond,asdescribedaboveandinSchedule2tothisAssessment;AssessmentofdocumentaryevidenceprovidedbyTDBankontheBondandsupplementedbyhigh-leveldesktopresearch.
Thesechecksrefertocurrentassessmentbestpracticesandstandardsmethodology;ReviewofTDBank'spublishedmaterialwithregardstoTDBank'senvironmentalactivitiesrelatingtothecompany;ReviewofTDBank'smarketingandroadshowmaterialsinregardstotheBond;DiscussionswithTDBank'smanagement,andreviewofrelevantdocumentationandevidencerelatedtothecriteriaoftheProtocol;Documentationoffindingsagainsteachelementofthecriteria.
Ouropinionasdetailedbelowisasummaryofthesefindings;andReviewedtheprojecttrackingmechanismsandprocess.
Page3of9FindingsandDNVGL'sopinionDNVGL'sfindingsarelistedbelow:1.
PrincipleOne:UseofProceeds.
TDBankisintendingtoissueaGreenBondtofinanceandrefinanceassetsinthefollowingareas;Renewableenergygeneration,Energyefficiencyandmanagement,GreeninfrastructureandSustainablelanduse.
Schedule1providesfurtherdetailsoftheprojectcategoriesintheseareas.
Theevidencewehavereviewedsuggeststhatthecurrentlyidentifiedprojectcategoriesareprovidingclearenvironmentalbenefits,eitherthroughtheproductionofrenewableandlowcarbonenergy,thereducedconsumptionofenergy,energyefficiencyandmanagement,greeninfrastructure,conservation,wasteandwatermanagement,sustainablelanduseorenhancingclimateresiliency.
Theexpectedbenefitsarequantifiedasannualenergysavedorgreenenergygenerated,annualGHGemissionsreduced/avoidedandnaturalcapitalvalue.
TDBankhasalsoconfirmeda24monthlookbackperiodpriortothedateofissuanceforeligibleprojects.
2.
PrincipleTwo:ProcessforProjectEvaluationandSelection.
TheTDBankGreenBondFrameworkdescribestheprocessthroughwhichprojectsareidentified,selectedandreviewed,includingdetailsoftherolesthatdifferentdepartmentsplayinthisprocess.
InadditiontothiswehavereviewedTDBank'scorporatepoliciesinrelationtoenvironmentalandsocialgovernance,andfoundthesetobeinlinewithindustrypractice.
3.
PrincipleThree:ManagementofProceeds.
Pendingallocation,TDBank'sTreasury&BalanceSheetManagement(TBSM)groupholdsthegreenproceedsinasegregatedinvestmentportfolioconsistingofcashorshort-termliquidmoneymarketinstruments.
Aseligibleprojectsarefunded,investmentsaresold,releasingfundsfromtheaccounttooffsetthegreencommitments.
4.
PrincipleFour:Reporting.
TDBankwillreportontheallocationofproceedsoftheGreenBondandassociatedenvironmentalbenefitsonanannualbasisthroughtheTDBankCorporateResponsibilityReportandtheInvestorRelationswebsite,includingthefollowingmetrics:annualenergysavedorgreenenergygenerated,annualGHGemissionsreduced/avoidedandnaturalcapitalvalue,wheredataisavailable.
OnthebasisoftheinformationprovidedbyTDBankandtheworkundertaken,itisDNVGL'sopinionthattheBondmeetsthecriteriaestablishedintheProtocolandthatitisalignedwiththestateddefinitionofgreenbondswithintheGreenBondPrinciples2017.
forDNVGLBusinessAssuranceServicesUKLimitedLondon,08September2017DougFarquharPrincipalConsultantandProjectDirectorDNVGL–BusinessAssurancePage4of9AboutDNVGLDrivenbyourpurposeofsafeguardinglife,propertyandtheenvironment,DNVGLenablesorganisationstoadvancethesafetyandsustainabilityoftheirbusiness.
Combiningleadingtechnicalandoperationalexpertise,riskmethodologyandin-depthindustryknowledge,weempowerourcustomers'decisionsandactionswithtrustandconfidence.
Wecontinuouslyinvestinresearchandcollaborativeinnovationtoprovidecustomersandsocietywithoperationalandtechnologicalforesight.
Withouroriginsstretchingbackto1864,ourreachtodayisglobal.
Operatinginmorethan100countries,our16,000professionalsarededicatedtohelpingcustomersmaketheworldsafer,smarterandgreener.
Page5of91SCHEDULE1:DESCRIPTIONOFCATEGORIES/ASSETSTOBEFINANCED/REFINANCEDTHROUGHTHEBONDAreaDescriptionCategoriesRenewableEnergyGenerationInvestmentsthathelpsupplyenergyfromrenewableandlowcarbonsourcesWindenergyGeothermalenergySolarenergyTidalandoceanenergygenerationBiomass1Hydropower2EnergyefficiencyandmanagementInvestmentsthathelpreduceenergyconsumptionorhelpmanageandstoreenergyBuildingefficiencyIndustrialefficiencyTransportationefficiencyEnergydistribution,storage,andmanagementClimatechangeandeco-efficientproducts,productiontechnologies,andprocessesGreeninfrastructureandsustainablelanduseInvestmentsthatsupportconservation,sustainableland,wasteorwatermanagement,andenhanceclimateresiliencySustainableagricultureSustainableforestryWaterandwaste-watermanagementandtreatmentSustainablewastemanagementConservationPollutionpreventionandcontrol1Bioenergyfromsourcesthatdonotdepleteexistingterrestrialcarbonpools.
2Existinghydropowerassetsintemperatezones,ornewhydropowerfacilitiesunder25MWgenerationcapacity.
Page6of9SCHEDULE2:TDBANK-SPECIFICGREENBONDELIGIBILITYASSESSMENTPROTOCOL1.
UseofproceedsRef.
CriteriaRequirementsWorkUndertakenDNVGLFindings1aTypeofbondThebondmustfallinoneofthefollowingcategories,asdefinedbytheGreenBondPrinciples:GreenUseofProceedsBondGreenUseofProceedsRevenueBondGreenProjectBondGreenSecuritizedBondInadditiontoreviewingtheevidencebelow,wehadseveraldetaileddiscussionswithTDBankManagementontheCriteriarequired.
Evidencereviewed:TDBankGreenBondTermSheetTDBankGreenBondFrameworkTheTDBankGreenBondfallswithinthecategoryofaGreenUseofProceedsBond.
1bGreenProjectCategoriesThecornerstoneofaGreenBondistheutilizationoftheproceedsofthebondwhichshouldbeappropriatelydescribedinthelegaldocumentationforthesecurity.
Inadditiontoreviewingtheevidencebelow,wehadseveraldetaileddiscussionswithTDBankManagementontheCriteriarequired.
Evidencereviewed:TDBankGreenBondTermSheetTDBankGreenBondFrameworkWeconcludethatthelegaldocumentationconfirmstheutilizationofproceedsisappropriatelydescribed.
1cEnvironmentalbenefitsAlldesignatedGreenProjectcategoriesshouldprovideclearenvironmentallysustainablebenefits,which,wherefeasible,willbequantifiedorassessedbytheissuer.
Inadditiontoreviewingtheevidencebelow,wehadseveraldetaileddiscussionswithTDBankManagementontheCriteriarequired.
Evidencereviewed:TDBankGreenBondTermSheetTDBankGreenBondFrameworkThespreadsheet"GreenBondTrackingListEligibilityCriteria.
xlsx"TheevidencereviewedgivesustheopinionthatthedesignatedGreenProjectcategoriesdoprovideclearenvironmentallysustainablebenefits.
Inaddition,eligibilitycriteriademonstratethattheGreenProjectcategoriesprovideclearenvironmentalbenefitsandthethresholdsofselectionarewithinreasonablelimits.
Page7of92.
ProcessforProjectSelectionandEvaluationRef.
CriteriaRequirementsWorkUndertakenDNVGLFindings2aIssuer'senvironmentalandsocialandgovernanceframeworkInadditiontoinformationdisclosedbyanissueronitsGreenBondprocess,criteriaandassurances,GreenBondinvestorsmayalsotakeintoconsiderationthequalityoftheissuer'soverallframeworkandperformanceregardingenvironmentalsustainability.
Inadditiontoreviewingtheevidencebelow,wehadseveraldetaileddiscussionswithTDBankManagementontheCriteriarequired.
Evidencereviewed:TDBankGreenBondTermSheetTDBankGreenBondFrameworkThespreadsheet"GreenBondTrackingListEligibilityCriteria.
xlsx"TD2016CorporateResponsibilityReportTDEnvironmentalPolicyTDNon-RetailEnvironmentalandSocialCreditRiskProcessTDPositionStatementonResponsibleEnergyDevelopmentTDSustainableInvestingApproachWeconcludethat,fromtheinformationprovided,TDBank'sapproachtomanagingenvironmentalsustainabilityisinlinewiththeobjectiveoftheGreenBondandTDBank'smaterialissuesreflectthis.
3.
ManagementofproceedsRef.
CriteriaRequirementsWorkUndertakenDNVGLFindings3aTrackingprocedureThenetproceedsofGreenBondsshouldbecreditedtoasub-account,movedtoasub-portfolioorotherwisetrackedbytheissuerinanappropriateInadditiontoreviewingtheevidencebelow,wehadseveraldetaileddiscussionswithTDBankManagementontheCriteriarequired.
Evidencereview:WefoundthattheTDBankGreenBondwillbetrackedinanappropriatemannerandattestedtobyaformalinternalprocessthatwillbelinkedtotheTDBanklendingandinvestmentoperationsforGreenProjects.
Page8of9Ref.
CriteriaRequirementsWorkUndertakenDNVGLFindingsmannerandattestedtobyaformalinternalprocessthatwillbelinkedtotheissuer'slendingandinvestmentoperationsforGreenProjects.
TDBankGreenBondTermSheetTDBankGreenBondFrameworkThespreadsheet"GreenBondTrackingListEligibilityCriteria.
xlsx"Thespreadsheet"GreenBond-GreenProjectsTracking-Q3-2017-09012017.
xlsx"3bTrackingprocedureSolongastheGreenBondsareoutstanding,thebalanceofthetrackedproceedsshouldbeperiodicallyreducedbyamountsmatchingeligiblegreeninvestmentsorloandisbursementsmadeduringthatperiod.
Inadditiontoreviewingtheevidencebelow,wehadseveraldetaileddiscussionswithTDBankManagementontheCriteriarequired.
Evidencereview:TDBankGreenBondTermSheetTDBankGreenBondFrameworkThespreadsheet"GreenBondTrackingListEligibilityCriteria.
xlsx"Thespreadsheet"GreenBond-GreenProjectsTracking-Q3-2017-09012017.
xlsx"Weconcludethatthereisaclearprocessinplaceforthetrackingofthebalancetakingintoaccountinvestmentsorloandisbursements.
3cTemporaryholdingsPendingsuchinvestmentsordisbursementstoeligibleGreenProjects,theissuershouldmakeknowntoinvestorstheintendedtypesoftemporaryinvestmentinstrumentsforthebalanceofunallocatedproceeds.
Inadditiontoreviewingtheevidencebelow,wehadseveraldetaileddiscussionswithTDBankManagementontheCriteriarequired.
Evidencereview:TDBankGreenBondTermSheetTDBankGreenBondFrameworkThespreadsheet"GreenBondTrackingListEligibilityCriteria.
xlsx"Thespreadsheet"GreenBond-GreenProjectsTracking-Q3-2017-09012017.
xlsx"WeconcludethatTDBankhasinplaceasegregatedinvestmentportfolioconsistingofcashandshort-termliquidmoneymarketinstrumentstouseastemporaryinvestments.
Page9of94.
ReportingRef.
CriteriaRequirementsWorkUndertakenDNVGLFindings4aPeriodicalreportingInadditiontoreportingontheuseofproceedsandthetemporaryinvestmentofunallocatedproceeds,issuersshouldprovideatleastannuallyalistofprojectstowhichGreenBondproceedshavebeenallocatedincluding-whenpossiblewithregardstoconfidentialityand/orcompetitiveconsiderations-abriefdescriptionoftheprojectsandtheamountsdisbursed,aswellastheexpectedenvironmentallysustainableimpact.
Inadditiontoreviewingtheevidencebelow,wehadseveraldetaileddiscussionswithTDBankManagementontheCriteriarequired.
Evidencereview:TDBankGreenBondTermSheetTDBankGreenBondFrameworkTD2016CorporateResponsibilityReportReportingonpreviousgreenbond"TDGreenBond–UseofProceeds2015"ReviewofroadshowpresentationandaccompanyingmarketingmaterialsWefoundthatTDBankplantoreportontheGreenBondinalignwiththerequiredCriteria.
TDBankstatethattheywillreportontheproceedsofthebondannuallyintheirCRreport.
EvidenceofreportingintheCRreportonthepreviousGreenBondwasreviewed,aswasevidenceoftheUseofProceedsonthepreviousGreenBond.