New Guidelines on Climate Transition Finance

In a bid to supporting, financing and accelerating the climate transition, the Green and Social Bond Principles has launched clear guidelines on the disclosures that should be made by issuers on their climate change strategy when raising funds in debt capital markets.

The new Climate Transition Finance Handbook clarifies the information that should be made publicly available to investors in connection with the issuance of ‘use of proceeds’ bonds aligned with the Green and Social Bond Principles or Sustainability Bond Guidelines, or general corporate purpose bonds issued in line with the Sustainability-Linked Bond Principles.

The recommended disclosures in the new Handbook are based on the work of the Climate Transition Finance Working Group and they referenced existing climate change disclosure frameworks developed by relevant industry groups, regulatory bodies and the scientific community.

The recommendations have four key elements:

  1. Issuer’s climate transition strategy and governance;
  2. Business model environmental materiality;
  3. Climate transition strategy to be ‘science-based’ including targets and pathways; and,
  4. Implementation transparency.

“With only a decade left to meet the goal of halving greenhouse gas emissions globally, the Climate Transition Finance Handbook is a timely document. The Handbook comprises disclosure recommendations to facilitate the necessary flow of capital to issuers required to decarbonize and implement a climate transition strategy on the basis of a science-based alignment with the Paris Agreement.”

Denise Odaro, Chair of the Green and Social Bond Principles Executive Committee.

Climate Transition Finance Handbook

source: http://www.icmagroup.org