Green bonds enable capital-raising and investment for new and existing projects with environmental benefits, the Green Bond Principles (GBP) seek to support issuers in financing environmentally sound and sustainable projects that foster a net-zero emissions economy and protect the environment.


The Green and Social Bond Principles (GBP) are the global standard for a $1.6 trillion market representing the largest source of market finance dedicated to sustainability and climate transition available internationally to corporates, banks and sovereigns. In 2020, these standards were referenced by an estimated 97% of sustainable bonds issued globally.

“Many investors view the sustainable bond markets through an impact lens, and will certainly welcome this year’s updates: Impact reporting is now strongly recommended for all use-of-proceeds bonds. The impact reporting handbook has been expanded with guidance on the circular economy and eco-efficient products category, and there is new guidance for database providers seeking to support market participants with the collection and aggregation of impact data.”

Johanna Köb, Head of Responsible Investment, Zurich Insurance and Vice-Chair of the Executive Committee of the GBP SBP

GBP-aligned issuance should provide transparent green credentials alongside an investment opportunity. By recommending that issuers report on the use of Green Bond proceeds, the GBP promote a step change in transparency that facilitates the tracking of funds to environmental projects, while simultaneously aiming to improve insight into their estimated impact.

The GBP, updated as of June 2021, are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for issuance of a Green Bond. This is the first update to the Green and Social Bond Principles since 2018. Over the last three years this crucial document, translated into 24 languages, has been at the centre of developments in the market as it has gone mainstream. The 2021 editions of the Social Bond Principles and Sustainability Bond Guidelines have been similarly revised.

The GBP recommend a clear process and disclosure for issuers, which investors, banks, underwriters, arrangers, placement agents and others may use to understand the characteristics of any given Green Bond. The GBP emphasise the required transparency, accuracy and integrity of the information that will be disclosed and reported by issuers to stakeholders through core components and key recommendations.

“The Green Bond Principles have been a reference text for all bond market stakeholders for more than 8 years, but this is still a young market and climate and social challenges are always more urgent. There was therefore a need to further strengthen this text to reflect the evolution of best practices. Recommending a framework, an external review and more information at issuer-level will help increase the transparency of the market. Encouraging issuers to supply more information on projects’ alignment with official or market-based taxonomies will enhance the credibility and standardisation of this market. These are very important steps forward.”

Tanguy Claquin, Global Head of Sustainable Banking, Crédit Agricole CIB and Vice-Chair of the Executive Committee of GBP SBP

The Green Bond Principles 2021 edition features:

  • Two key recommendations on the Bond Framework and External Reviews designed to increase transparency alongside the four core components (Use of Proceeds, Process for Project Evaluation and Selection, Management of Proceeds, and Reporting);
  • A recommendation of heightened transparency for issuer-level sustainability strategies and commitments;
  • Encouragement to supply information, if relevant, on the degree of alignment of projects with official or market-based taxonomies;
  • Promotion of transparency on issuer processes to identify and manage perceived and known social and/or environmental risks;
  • Links and references to the complementary guidance of the Climate Transition Finance Handbook, the Harmonised Framework for Impact Reporting, the Guidelines for External Reviews, which are supplemented by the Guidance Handbook.

The Green Bond Principles 2021 cqn be loaded here

Source: ICMA

New guidance has also been issued: