The Green Bond Principles (GBP), Social Bond Principles (SBP), Sustainability Bond Guidelines (SBG) and Sustainability-Linked Bond Principles (SLBP) (the “Principles”) - the global standard for a $2.4 trillion market, ...
representing the largest source of market finance
dedicated to sustainability and climate transition available
internationally to corporates, banks and sovereigns - announce new and
updated publications including new definitions for green securitisation,
updated key performance indicators for Sustainability-Linked Bonds and
new resources for climate transition finance.
Specific publications and resources released today are:
- New definitions for green
securitisation (Secured Green Collateral Bond, Secured Green Standard
Bond) clarifying terminology and market practice, notably for
collateral. A related Q&A
is also being released (including sustainability criteria relating to
collateral, no double counting principles, reporting requirements,
etc.). Similar guidance is also available for social bond securitisation.
- An updated registry
of approximately 300 key performance indicators (KPIs) for
Sustainability-Linked Bonds, the fastest-growing segment of the
sustainable bond market. The KPIs are classified by sector and between
core and secondary indicators following the input of over 90 leading
market participants and stakeholders. An accompanying Q&A
also addresses, among other issues, the materiality assessment of KPIs,
which has been a topic of debate among market participants and
stakeholders.
- A new Climate Transition Finance (CTF) Methodologies registry
has been created with a list of tools to specifically help issuers,
investors, or financial intermediaries validate their emission reduction
trajectories/pathways as "science-based". Similarly, the Guidelines for External Reviews have been updated to facilitate the assessment of alignment with the existing Climate Transition Finance Handbook (CTFH).
The Principles have also released today additional guidance, updates and templates, specifically:
- New metrics for impact reporting (1) for Green Projects relating to environmentally sustainable management of living natural resources and land use, and (2) for Social Projects (including an enriched list of social indicators and impact confirmation on target population).
- Updated high-level mapping to the United Nations’ Sustainable Development Goals (SDGs).
- A recommendations paper and proposed information template for providers of Green, Social and Sustainability Bond index services.
- Pre-issuance Checklist
for Green Bonds/Green Bond Programmes and an updated Sustainable
Bond/Bond Programme Information Template (including disclosure of the
issuer’s sustainability strategy).
The standards and guidance from the Principles are developed
with the input of over 400 market participants and stakeholders, as well
as the participation of many other organisations through technical
working groups. In 2021, the Principles were referenced by an estimated
98% of sustainable bonds issued globally and have been translated into
25 languages.
The new and updated publications and resources in
support of market transparency and development are being announced at
the 2022 Annual Conference of the Principles on the 28 June in London.
The conference will also feature discussions on workstreams concerning
the application of the Principles in a wider context, including
commercial paper and repo, as well as high yield and emerging markets.
Denise
Odaro, Chair of the Principles, Head of Investor Relations,
International Finance Corporation (IFC), said: ”The Principles serve as a
model for incorporating sustainability into capital markets, and the
updates this year ensure that they remain current with market
developments while also recognising emerging related products.
Additionally, the updated KPI registry and climate transition
methodologies stand to aid issuers to fundamentally and rapidly advance
the transition to a low-carbon economy via the bond market and beyond.”
Nicholas
Pfaff, Deputy Chief Executive and Head of Sustainable Finance, ICMA,
said: “The 2022 announcements of the Principles represent critical
support for market integrity and development. Sustainability now
permeates all areas of the capital markets. The Principles provide
market participants and stakeholders with an essential reference for
product standards, agreed terminology and technical consistency, as well
as a resource to benchmark ambition.”
Ashley Schulten, Head of
Responsible Investing for Global Fixed Income, BlackRock, and Vice-Chair
of the Principles, said: “What the Principles have accomplished over
the years has been truly impressive. This has been possible thanks to
the very active participation across various market players, the
incredible support of ICMA, and the input through our member and
advisory network covering the sustainability ecosystem. These updated
guidelines reflect hundreds of hours of research, feedback and
consensus-building across this community.”
Tanguy Claquin, Global
Head of Sustainable Banking, Crédit Agricole CIB and Vice-Chair of the
Principles, said: “As every year, the Principles community publishes new
best practices and guidelines for the sustainable bond market. It is a
great toolbox for market participants, but also a great reference for
stakeholders and regulators that can be used to ensure market
transparency and credibility. I want to deeply thank all the people who
have dedicated their time to the development of these new texts.”
New/updated documents released:Green Bond Principles - June 2021 (with June 2022 Appendix 1)Pre-issuance Checklist for Green Bonds / Green Bond Programmes - June 2022Social Bond Principles - June 2021 (with June 2022 Appendix 1)Sustainable Securitisation Related questions - June 2022Sustainability-Linked Bond Principles Related Questions - June 2022Sustainability-Linked Bonds Illustrative KPIs Registry - June 2022Climate Transition Finance Methodologies Registry - June 2022Green, Social and Sustainability Bonds: A High-Level Mapping to the Sustainable Development Goals - June 2022Handbook - Harmonised Framework for Impact Reporting (Green Bonds) - June 2022Harmonised Framework for Impact Reporting for Social Bonds - June 2022Guidelines for Green, Social, Sustainability and Sustainability-Linked Bonds External Reviews June 2022 - June 2022Green, Social and Sustainability Bond Index Service Mapping Supporting Paper - June 2022Index Providers Mapping Template - June 2022ICMA
© ICMA
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article