Market developments

This report examines the current state of the AFOLU (Agriculture, Forestry, and Other Land Use) sustainable debt market and identifies key areas for further development to drive systemic change. It delves into how corporates of all sizes along the supply chain can leverage sustainable debt. The report illustrates the application of the latest international disclosure initiatives and guidance from Climate Bonds Sector Criteria, showcasing examples of metrics beyond scope 3 GHG emissions that can be used for green and sustainable debt reporting or for sustainability-linked KPIs.

Building on the foundational work launched last year, Climate Bonds Initiative, together with International Investor Group on Climate Change (IIGCC), Sustainable Markets Initiative (SMI), and Climate Arc, have released, "Navigating Corporate Transitions: a tool for financial institutions". This paper presents a methodology for a tool designed to aid financial institutions in assessing and categorising corporates by their transition credibility and maturity.

Climate Bonds releases a full-length report on Sustainability-Linked Bonds (SLBs), which assesses the profile, structural features, KPI performance, and transition plans of SLB issuance, and makes recommendations aimed at growing a credible SLB market. This first of-its-kind report reveals that the sustainability credentials of many SLBs have been weak and require improvement and introduces a best practice checklist for high-quality SLB issuance.

The EUDR, in line with EU sustainability and due diligence standards, presents challenges for supply chains, cost control, and trade. Our new report delves into these regulations, offering key insights for investment in this sector.

A transition plan is a time-bound and trackable strategy and roadmap presenting the plans and actions for reducing emissions with a science-based pathway to net zero.

This paper is designed to provide a complementary and introductory guide to assist stakeholders understand the basic markers of a credible transition plan, however it cannot replace independent in-depth verification and certification.