TaxTMI 
TaxTMI 
Framework for Environment, Social and Governance (ESG) Debt Securities (other than green debt securities)
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....ssue and Listing of Non-Convertible Securities) Regulations 2021 ('SEBI NCS Regulations') defines ESG debt securities as under: "Environment, Social and Governance Debt Securities or "ESG Debt Securities" means green debt securities, social bonds, sustainability bonds, sustainability-linked bonds, or any other type of bonds, by whatever name called, that are issued in accordance with such international frameworks as adapted or adjusted to suit Indian requirements that are specified by the Board from time to time, and any other securities as specified by the Board." III. Further, in terms of Regulation 2(1)(q) of the SEBI NCS Regulations "Green debt security" means a debt security issued for raising funds subject to the conditions as may be specified by the Board from time to time, to be utilised for project(s) and/ or asset(s) falling under certain categories mentioned therein. IV. Regulation 12A of the SEBI NCS Regulations reads as under: "Issuance of Environment, Social and Governance Debt Securities 12A. An issuer desirous of issuing and listing of Environment, Social and Governance Debt Securities shall comply with such conditions as may be specified by ....
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.... d) Employment generation and programmes designed to prevent and/or alleviate unemployment stemming from socioeconomic crises, climate transition projects and/or other considerations for a "just transition" (such provision and/or promotion could include SME financing and microfinance) e) Food security and sustainable food systems (e.g. physical, social, and economic access to safe, nutritious, and sufficient food that meets dietary needs and requirements; resilient agricultural practices; reduction of food loss and waste; and improved productivity of small-scale producers) f) Socioeconomic advancement and empowerment (e.g. equitable access to and control over assets, services, resources, and opportunities; equitable participation and integration into the market and society, including reduction of income inequality) g) any other category, as may be specified by the Board from time to time. 5. For purposes of SEBI NCS Regulations and SEBI LODR Regulations, 2015 and this Circular, Sustainability bonds shall have the definition as under: 'Sustainability bonds' means a debt security issued for raising funds, subject to the condition....
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....chapter IX of the NCS Master Circular^4 and for social bonds as specified in Annexure-A of this circular. 10. Initial disclosure requirements, continuous post-listing obligations and appointment of independent third-party reviewer/ certifier for sustainability-linked bonds: An issuer desirous of issuing sustainability-linked bonds shall make the disclosures as specified in Part I of Annexure B in the offer document for public issues/ private placements in addition to adhering to the obligations in accordance with the relevant international standards that the securities are aligned/ issued with. An issuer who has listed sustainability-linked bonds shall provide disclosures as specified in Part II of Annexure-B along with its annual report and financial results. The issuer of sustainability-linked bonds shall appoint an independent third party reviewer/ certifier to undertake the activities and responsibilities specified in part III of Annexure-B. VI. Responsibilities of the issuer: An issuer of social bonds/ sustainability bonds shall: a) Maintain a decision-making process which it uses to determine the continuing eligibility of the project(s) and/or as....
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....y. IX. The circular shall come into force for issuances of ESG debt securities with effect from June 05, 2025. X. The Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 55 (1) of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 to protect the interest of investors in securities and to promote the development of, and to regulate the securities market. XI. This Circular is available at www.sebi.gov.in under the link "Legal→Circulars". Yours faithfully, Rohit Dubey General Manager Department of Debt and Hybrid Securities +91-022 2644 9510 [email protected] Annexure-A I. Initial disclosure requirements for issue and listing of Social Bonds: An issuer desirous of issuing social bonds shall make the following additional disclosures in the offer document for public issues/ private placements: 1. Social objectives of the social project(s) including but not limited to details of the target population and the intended benefits of the proposed social projects to the identified target population; 2. Brief....
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....s of social bonds. 2. Details of unutilised proceeds including the temporary placement/ utilisation of unallocated and unutilised proceeds from each ISIN of social bond issued by the issuer. 3. The following additional disclosures shall be made in the Annual Report: a) List of project(s) and/or asset(s) to which proceeds of the social bonds have been allocated/invested including a brief description of such project(s) and/or asset(s), amounts disbursed/ allocated and their expected impact. b) In cases where confidentiality agreements restrict the disclosure of details about specific project(s) and/or asset(s), the information shall be presented in generic terms or on an aggregated portfolio basis (e.g. percentage allocated to certain project categories). c) Qualitative performance indicators and, where feasible, quantitative performance measures of the social impact (as applicable) of the project(s) and/or asset(s). If the quantitative benefits/impact cannot be ascertained, then the said fact may be appropriately disclosed along with the reasons for non-ascertainment of the benefits/impact on the environment. d) Methods and the k....
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....or the purpose of this circular. Such ESG Rating Provider shall comply with the conditions specified in paragraph III.i above. v. The issuer shall ensure that the details regarding the independent third party reviewer are adequately disclosed in the offer document. Annexure B I. Initial disclosure requirements for issue and listing of Sustainability-Linked Bonds: An issuer desirous of issuing sustainability-linked bonds shall make the following additional disclosures in the offer document for public issues/ private placements: 1. The issuer shall disclose the rationale for issuance of sustainability-linked bonds and consistency with issuers' overall sustainability and business strategy; 2. Details of taxonomies, standards or certifications both Indian and global, if any, referenced. 3. The issuer shall adhere to pre-issuance obligations in accordance with the relevant international standards that the securities are aligned with. 4. An indicative list of disclosures to be specified in offer document is given below for reference: a) Details of Issuer's core sustainability and business strategy; b) Details o....
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....nced, including amount outstanding. II. Continuous disclosure requirements An issuer who has listed sustainability-linked bonds shall provide following disclosures along with its annual report and financial results: a. An issuer who has listed sustainability-linked bonds, shall adhere to the post-issuance obligations in accordance with the relevant international standards that the securities are aligned with. b. An issuer who has listed sustainability-linked bonds, shall provide following additional disclosures along with its annual report and financial results: i. up-to-date information on the performance of the selected KPI(s), including baselines where relevant; and ii. A verification report by an independent third-party reviewer in relation to the SPT, outlining the performance against the SPTs and the related impact, and timing of such impact, on the bond's financial and/or structural characteristics. III. Independent third party reviewer/ certifier for sustainability-linked bonds: i. The issuer shall appoint an independent third party reviewer/ certifier to ascertain that the sustainability-linked bonds are in alignm....