Why is it important?
Investor demand for Green Bonds & Climate Bonds is strong, and will increase in line with the delivery of quality products into the market.
However, investor concerns about the credibility of green labelling are also growing. Standards, assurance & certification are essential to improved confidence and transparency and further strong growth in the market.
What is it?
The Climate Bonds Standard and Certification against that Standard is an easy-to-use tool that allows investors and intermediaries to assess the environmental integrity of bonds. The Standard is backed by the Climate Bonds Standard Board of investor representatives, which collectively represent $51 trillion of assets under management.
The Climate Bonds Standard
The Climate Bonds Standard consists of a Certification process, Pre-Issuance requirements, Post-Issuance requirements and a suite of sector eligibility & guidance documents. The Green Bond Principles are fully integrated.
New Climate Bonds Standard V3.0 is available here.
Climate Bonds Standard V2.1 is available here.
All resources for the user of the Standard are availble on the Resources for Issuers & Verifiers page.
HOW DOES IT WORK?
Certification is a simple and worthwhile process. The bond issuer contracts an Approved Verifier to confirm that the bond meets with all of the requirements in the Standard.
Sector Eligibility Criteria
These spell out the sector specific technical criteria for eligible projects & assets. These are developed with a wide range and a large number of experts in the specific field and ensures that the assets and projects linked to the bond, loan or other debt instrument are fully aligned with the Paris Agreement to limit global warming to under 2 degrees.
- Sector specific criteria for Water Infrastructure, Solar, Wind, Low Carbon Buildings, Geothermal Energy, Marine Renewable Energy, Forestry, Bioenergy, Waste Management and Low Carbon Transport are available.
- Criteria for Land Use, Agriculture, Hydropower and Shipping are awaiting Board approval, having recently undergone public consultation.