CLIMATE BONDS STANDARD

The Climate Bonds Standard Version 4.0 is a voluntary labelling scheme developed by the Climate Bonds Initiative to certify debt instruments, assets, and non-financial legal entities that align with the Paris Climate Agreement. It provides a science-based framework for certifying Use of Proceeds (UoP) instruments, specific physical assets, entities undergoing climate transition, and Sustainability-Linked Debt (SLD).

• The Climate Bonds Standard Version 4.0 expands its certification scope beyond Use of Proceeds (UoP) green instruments to include general-purpose instruments, assets, and non-financial legal entities.
• Certification for Use of Proceeds (UoP) debt instruments requires that proceeds be allocated to specific projects, assets, or activities that align with sector-specific criteria. Issuers must provide a Green Finance Framework and undergo mandatory verification by an Approved Verifier.
• For UoP instruments, the standard mandates that net proceeds must be allocated to nominated projects within 24 months of issuance, though extensions up to 10 years may be granted under specific justifications.
• Entity Certification is available for non-financial legal entities and is based on a 'Certification Threshold' where at least 90% of the entity's economic activities must be 'Compliant Activities' based on revenue share or GHG emissions weighting.
• Entity and Sustainability-Linked Debt (SLD) certifications are based on five 'Hallmarks' of a credibly transitioning company: Paris-aligned targets, robust plans, implementation action, internal monitoring, and external reporting.
• Entity and SLD certifications offer two levels: Level 1 ('Aligned'), where targets align with Sector Criteria at the time of certification, and Level 2 ('Transition'), where targets must align by December 31, 2030.
• Parent Groups of certified entities must adhere to specific 'Climate Safeguards', including a public commitment to no expansion of fossil fuel exploration, extraction, or power generation after January 1, 2023, and no conversion of high-carbon-stock land since January 1, 2020.
• Sustainability-Linked Debt (SLD) certification is valid for the full term of the instrument, provided the issuer maintains annual verification and ensures the instrument does not mature before the first interim performance target is reached.
• Asset Certification focuses exclusively on the environmental credentials of specific projects or portfolios regardless of financing, and is valid for a maximum of 12 months unless a Programmatic Asset Certification process is adopted.
• The standard defines a wide range of eligible Use of Proceeds instruments, including bilateral loans, commercial paper, covered bonds (Pfandbrief), green deposits, and Sukuk.

APA

Climate Bonds Initiative (2023). CLIMATE BONDS STANDARD. https://www.climatebonds.net/files/documents/Climate-Bonds_Climate-Bonds-Standard_V4-0_Apr-2024.pdf

Chicago

Climate Bonds Initiative. CLIMATE BONDS STANDARD. 2023. https://www.climatebonds.net/files/documents/Climate-Bonds_Climate-Bonds-Standard_V4-0_Apr-2024.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=CLIMATE BONDS STANDARD |date=April 2023 |url=https://www.climatebonds.net/files/documents/Climate-Bonds_Climate-Bonds-Standard_V4-0_Apr-2024.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2023climate, author = {{Climate Bonds Initiative}}, title = {{CLIMATE BONDS STANDARD}}, institution = {Climate Bonds Initiative}, year = {2023}, month = apr, url = {https://www.climatebonds.net/files/documents/Climate-Bonds_Climate-Bonds-Standard_V4-0_Apr-2024.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }