Archive · 6 Jun 2025
SEBI Implements Strict Rules for ESG-Tagged Bonds
SEBI, India's financial watchdog, is making sure companies are honest about their green and social bonds.
Starting in mid-2025, companies issuing these bonds must follow strict rules.
They must show exactly how they'll use the money, like for clean water or education.
Companies can't use the money for things that hurt the environment, like oil or weapons.
They also have to regularly report how they are doing.
This helps make sure that companies are truly helping the environment or society, not just pretending to.
SEBI introduces guidelines for ESG-labeled debt securities to combat 'purpose-washing'.
Framework effective from June 5, 2025, applies to social, sustainability, and sustainability-linked bonds.
Detailed guidelines on eligible use of proceeds, disclosures, and post-issuance reporting are mandated.
ESG proceeds are prohibited from funding harmful activities, including fossil fuels and weapons.
Issuers must provide annual reports on proceeds utilization and environmental/social impact.
- Who
- The Securities and Exchange Board of India (SEBI).
- What
- SEBI has notified a framework for ESG-labeled debt securities.
- When
- Effective June 5, 2025.
- Where
- India.
- Why
- To enhance transparency and prevent 'purpose-washing' in sustainable finance.
- Effective Date
- June 5, 2025
- Securities Covered
- Social, Sustainability, Sustainability-Linked Bonds
- Scope of Framework
- Listed corporate bonds
- International Standards Alignment
- ICMA Principles, Climate Bonds Standard
