CLIMATE BONDS STANDARD

The Climate Bonds Standard version 4.2 provides a science-based framework for certifying climate-aligned investments. It covers four primary certification paths: Use of Proceeds (UoP) debt instruments, specific assets, non-financial legal entities, and sustainability-linked debt (SLD). Certification requires independent verification by approved third parties and adherence to sector-specific criteria. For entities and SLDs, the standard emphasizes absolute measures tied to transition pathways, requiring climate mitigation performance targets (CMPTs) and robust transition plans. The standard also includes a specialized certification for agri-food entities focusing on deforestation- and conversion-free sourcing.

• The Climate Bonds Standard offers four distinct certification categories: Use of Proceeds (UoP) debt instruments, specific assets, non-financial legal entities, and sustainability-linked debt (SLD) issued by non-financial legal entities.
• For Use of Proceeds (UoP) certifications, issuers must allocate at least 95% of net proceeds to projects and assets that meet the Standard's Sector Criteria.
• The Standard allows a 5% flexibility pocket for UoP instruments to finance projects that do not fully satisfy Sector Criteria, provided they align with ICMA Green/Social Bond Principles and avoid excluded activities such as fossil fuel exploration, natural gas production, and crude oil refining.
• Entity and SLD certifications require that at least 90% of the entity's or the instrument's represented economic activities are 'compliant activities' based on revenue share or GHG emissions weighting.
• Entity and SLD certifications are divided into 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 31 December 2030.
• A credible company transition under the Standard is defined by five hallmarks: Paris-aligned targets, robust plans, implementation action, internal monitoring, and external reporting.
• Parent groups of certified entities must commit to no expansion of fossil fuel activities after 1 January 2023 and no conversion of high-carbon stock (HCS) land after 1 January 2020.
• The Standard includes a specific certification for agri-food entities focusing on 'deforestation- or conversion-free sourcing', requiring that supply chains only include commodities from land not subject to deforestation or natural ecosystem conversion after 31 December 2020.
• Certification for UoP instruments involves a three-phase process: pre-issuance (assessing internal processes and frameworks), post-issuance (confirming allocation), and ongoing certification (annual reporting).
• All certifications require mandatory verification by an 'approved verifier', which must be an independent third-party assurance or external review provider approved by the Climate Bonds Standard Board.

APA

Climate Bonds Initiative (2024). CLIMATE BONDS STANDARD. https://www.climatebonds.net/files/documents/Climate-Bonds_Standard-version-4.2_Jun-2024.pdf

Chicago

Climate Bonds Initiative. CLIMATE BONDS STANDARD. 2024. https://www.climatebonds.net/files/documents/Climate-Bonds_Standard-version-4.2_Jun-2024.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=CLIMATE BONDS STANDARD |date=June 2024 |url=https://www.climatebonds.net/files/documents/Climate-Bonds_Standard-version-4.2_Jun-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 = jun, url = {https://www.climatebonds.net/files/documents/Climate-Bonds_Standard-version-4.2_Jun-2024.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }