External Review

Bonds are labelled green by the issuer and should be qualified as green by an independent party

 

Issuers self-label bonds as green. At a minimum, the issuers will by themselves provide detail to investors on the green eligibility criteria for the use of proceeds, for example disclosed in a green bond framework.

For more transparency, issuers can also commission an external review on the green credentials of the use of proceeds. These reviews can take different forms. For more details about the types of review, see the tables below. 

 

Pre-issuance reviews

TYPE OF REVIEW WHAT IT COVERS SERVICE PROVIDERS EXAMPLES

Third party Assurance

Assurance reports state whether the green issuance is aligned with the Green Bond Principles and the Climate Bonds Standard

Audit firms

KPMG Assurance Report commissioned by IDBI Bank;

Deloitte’s Assurance Report commissioned by CGN

Second Party Opinion

Provide an assessment of the issuer’s green bond framework, analysing the “greenness” of eligible projects/assets. Some second party opinions also provide a sustainability rating, giving a qualitative indication (e.g. CICERO rates green bond frameworks according to three grades – light green, medium green, dark green – that reflect the alignment of the framework to a low-carbon economy)

Environmental Social Governance (ESG) service providers (Oekom, Sustainalytics, Vigeo), DNV GL and scientific experts (CICERO, CECEP Consulting)

CICERO’s SPO commissioned by the Republic of Indonesia;

DNV GL SPO commissioned by Arise AB;

Sustainalytics’ SPO commissioned by the Development Bank of Japan

 

Green Bond Rating

A number of rating agencies assess the bond’s alignment with the Green Bond Principles and the integrity of its green credentials

Rating agencies (Moody’s, RAM Holdings, R&I, S&P Global Ratings)

Moody’s Green Bond Rating assigned to Banco Nacional de Costa Rica’s USD500m green bond;

S&P’s Green Evaluation assigned to Province of La Rioja’s USD200m green bond

Pre-issuance verification of the Climate Bonds Certification according to the Climate Bonds Standard

The Climate Bonds Standard is the only Paris Agreement aligned standard available in the market. Third party verification confirms that the use of proceeds adhere to the Climate Bonds Standard and sector specific criteria (e.g. Low Carbon Transport)

Verifiers approved by the Climate Bonds Standard scheme: audit firms and ESG service providers

Oekom’s independent verification statement of ABN Amro’s EUR500m green bond;

First Environment’s independent verification statement of Los Angeles County MTA’s USD471m green bond

 

 

Post-issuance reviews

TYPE OF REVIEW

WHAT IT COVERS

SERVICE PROVIDERS

EXAMPLES

Second party or third party assurance report

Assurance of allocation of proceeds to eligible green projects.

Audit firms, ESG research service providers (Oekom, Sustainalytics) and scientific experts

DNV GL 2018 Assurance report for NAB’s AUD300m 2014 green bond

 

Impact reporting

Reporting that seeks to quantify the climate or environmental impact of a project/asset numerically

Issuer, Audit firms, ESG research service providers (Oekom, Sustainalytics) and scientific experts

HSBC’s green bond report;

Iberdola’s Sustainability Report 2016, and PWC’s independent Assurance report (pg. 266);

Berlin Hyp Green Bonds Impact Report (June 2016)

Post-issuance verification of the Climate Bonds Certification according to the Climate Bonds Standard

Assurance against the Climate Bonds Standard, including the allocation of proceeds to eligible green projects and types of green projects

Verifiers approved by the Climate Bonds Standard scheme: audit firms and ESG service providers

EY’s post-issuance report for Westpac’s AUD500m 2016 green bond;

KPMG’s post-issuance report for Axis Bank’s USD500m 2016 green bond

 

See what external reviews are publicly available here.