CLIMATE BONDS STANDARD

The Climate Bonds Standard Version 4.1 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, non-financial entities, and Sustainability-Linked Debt (SLD), ensuring they meet rigorous climate mitigation and transition criteria.

• The Climate Bonds Standard Version 4.1 expands its certification scope beyond Use of Proceeds (UoP) debt instruments to include assets, non-financial legal entities, and sustainability-linked debt (SLD).
• For Use of Proceeds (UoP) certification, issuers must allocate at least 95% of net proceeds to projects and assets that meet the Standard's Sector Criteria. A 'flexibility pocket' of up to 5% is allowed for projects that do not fully satisfy the Sector Criteria but align with ICMA Green/Social Bond principles and avoid specific excluded activities, such as fossil fuel exploration or high-carbon-stock land conversion.
• Entity Certification is currently limited to non-financial legal entities or segregated segments thereof. To obtain certification, at least 90% of the entity's economic activities (weighted by revenue or GHG emissions) must be 'Compliant Activities' that meet requirements for climate performance, delivery strategy, governance, and disclosure.
• The Standard defines two levels of certification for Entities and SLDs based on the timing of alignment with Sector Criteria: Level 1 ('Aligned') for those already aligned at the time of certification, and Level 2 ('Transition') for those that align by December 31, 2030.
• Certification for Entities and SLDs requires a Transition Plan consisting of a Vision, a Strategic Narrative, and Implementation Plans (including Action Plans for Scope 1, 2, and sometimes 3 emissions, and a Finance Plan). These plans must be supported by Board approval and a governance structure that monitors progress and corrects underperformance within 12 months.
• Parent Groups of certified entities or SLD issuers must adhere to 'Climate Safeguards,' which include a public commitment to no expansion of fossil fuel activities after January 1, 2023, a commitment against the conversion of high-carbon-stock land since January 1, 2020, and a public net zero emissions commitment covering all material Scope 1, 2, and 3 emissions.
• The certification process requires mandatory verification by an 'Approved Verifier'—an independent third party approved by the Climate Bonds Standard Board. Verifiers must follow ISAE3000 or equivalent international standards and provide a Verification Report with an unqualified opinion for certification to be granted.
• UoP instruments must be allocated within 24 months of issuance, though the Climate Bonds Standard Secretariat may grant extensions up to 5 years (or exceptionally 10 years). To maintain certification, issuers must provide annual Update Reports covering allocation, eligibility, and encouraged impact reporting.
• Asset Certification focuses exclusively on the eligibility of a project, asset, or portfolio under Sector Criteria, independent of its financing. One-off certifications are valid for 12 months, while Programmatic Asset Certification allows for annual verification to maintain status.
• The Standard supports a wide variety of UoP instruments, including bilateral loans, commercial paper, covered bonds (such as the German Pfandbrief), green deposits, sukuk, and securitised bonds (ABS, MBS, CLO).

APA

Climate Bonds Initiative (2024). CLIMATE BONDS STANDARD. https://www.climatebonds.net/files/documents/Climate-Bonds_Climate-Bonds-Standard_V4-1_Feb-2024.pdf

Chicago

Climate Bonds Initiative. CLIMATE BONDS STANDARD. 2024. https://www.climatebonds.net/files/documents/Climate-Bonds_Climate-Bonds-Standard_V4-1_Feb-2024.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=CLIMATE BONDS STANDARD |date=February 2024 |url=https://www.climatebonds.net/files/documents/Climate-Bonds_Climate-Bonds-Standard_V4-1_Feb-2024.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2024climate, author = {{Climate Bonds Initiative}}, title = {{CLIMATE BONDS STANDARD}}, institution = {Climate Bonds Initiative}, year = {2024}, month = feb, url = {https://www.climatebonds.net/files/documents/Climate-Bonds_Climate-Bonds-Standard_V4-1_Feb-2024.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }