Certification

The Climate Bonds Standard and Certification Scheme is a fairtrade like labelling scheme for bonds. Rigorous scientific criteria ensure that it is consistent with the 2 degrees Celsius warming limit in the Paris Agreement. The Scheme is used globally by bond issuers, governments, investors and the financial markets to prioritise investments which genuinely contribute to addressing climate change.

Glossary

Green Bond

A financial debt instrument that is linked with green and climate friendly assets or projects.

Climate Bonds Standard & Certification

Climate Bonds Initiative's "FairTrade"-like scheme that ensures the bond is aligned with the Paris Agreement 2 degree warming limit. This scheme is comprised of several steps and processes.

Issuer

The entity that wants to issue a green bond and highlight its green and climate friendly credentials. This can be a private company, a listed company, a bank, a government department, a government related agency, etc.

Verifier

A third party, independent company that checks the bond against the Climate Bonds Standard and provide assurance to the market that the bond meets the requirements.

Verification

The process by which the bond issuer engages a Verifier to ensure their bond issuance complies with the Climate Bonds Standard and Certification Scheme. It is comprised of steps both before and after the bond issuance (see below).

Pre-issuance verification

The "first half" of the verification process, which happens before the bond the issuance. This may take from a couple of weeks up to a few months, depending on the complexity of the bond or assets. The issuer engages an Approved Verifier, who will guide the issuer through the process of Certification and if necessary, help them identify which projects and assets are eligible. The Verifier will then complete a report for the Climate Bonds Standard Board to review and understand whether the bond is eligible for Certification.

Pre-issuance Verification report

The report produced as a part of the pre issuance verification procedures.

Post-issuance verification

The "second half" of the verification process, which happens after the bond issuance. This is simpler and generally a quick check to see that the issuer has followed its plans and allocated the funds appropriately as stated in the pre issuance verification. The issuer engages the same Verifier as before and a report is produced within 12 months of the bond issuance.

Post-issuance Verification report

The report produced as a part of the post issuance verification procedures.

Annual Reporting

Over the term of the bond, the issuer will provide a report to confirm that their assets haven't changed and the funds are allocated appropriately. This report will be published on Climate Bonds' website and publicly available. Climate Bonds' does not require that this report have any involvement of the Verifier, however some issuers have chosen to engage the Verifier again to produce more detailed reports.

CONTACT

If you are interested in Basic Certification or Programmatic Certification of a type of bond which is not covered by the definitions above please contact directly:

Rob Fowler