Transition Finance for Transforming Companies

A Climate Bonds discussion paper: Transition Finance for Transforming Companies


Climate Bonds has always recognised the importance for all sectors of the economy to go green. We have set eligibility criteria for use-of-proceeds across the renewable energy, buildings, transport, water infrastructure, waste management, forestry and agriculture sectors. Work is ongoing to develop the same for a number of high emitting sectors including cement, chemicals and steel. This will form the basis of an expanded range of use-of-proceeds bonds certification into sectors often labelled as transition.

It is also Climate Bonds’ intention to certify instruments beyond use-of-proceeds bonds, including SLBs and similar (e.g,. Sustainability Linked Loans - SLLs). The intention is to provide transparency over the science-based criteria for credible SLBs and similar instruments, and assurance for investors that those requirements have been met in respect of any certified issuance. Consideration is also being given to the certification of companies (i.e. not in association with any particular financial instrument).
This paper presents Climate Bonds’ proposal of the five hallmarks of a credibly transitioning company, i.e. a company whose transition is rapid and robust enough to align with the global goal to nearly halve emissions by 2030 and reach net zero by 2050, in line with the Paris Agreement. These would be the key elements that would be the focus of assessment for certification, and all five hallmarks would need to be satisfied. 




This document is a discussion paper intended as the basis for comment and discussion.  We are keen to receive feedback, comments and suggestions.  There are some specific questions on the attached feedback form, that also has space for other aspects.  The form is available at the link below and responses can be submitted in English, Chinese, Spanish and Portuguese.