Green Bond Principles & Climate Bonds Standard

Green Bond Principles & Climate Bonds Standard

Voluntary best practice guidelines called the “Green Bond Principles” (GBP) were established in 2014 by a consortium of investment banks: Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank, JPMorgan Chase, BNP Paribas, Daiwa, Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank and SEB. Ongoing monitoring and development of guidelines has since moved to an independent secretariat hosted by the International Capital Market Association (ICMA).

The GBP emphasise the required transparency, accuracy and integrity of information that will be disclosed and reported by issuers to stakeholders. The GBP have four core components:

1. Use of Proceeds
2. Process for Project Evaluation and Selection
3. Management of Proceeds 
4. Reporting

The Green Bond Principles do not provide details on “green”. The green definitions are left to the issuer to determine. Broad green project categories suggested by the principles include:

  • Renewable energy
  • Energy efficiency (including efficient buildings)
  • Sustainable waste management
  • Sustainable land use (including sustainable forestry and agriculture)
  • Biodiversity conservation
  • Clean transportation
  • Clean water and/or drinking water

World Bank and IFC have their own criteria or definitions of eligible green projects.

The Climate Bonds Initiative provides green definitions that are sector specific, developed by scientists and industry experts. These fall into eight broad categories under our Taxonomy. Sector specific standards are used for Certification