Sebi Notifies Stronger Framework For Green Bonds; Introduces Concept Of Blue, Yellow Bonds

February 7, 2023

In exercise of powers conferred under SEBI Act, 1992, SEBI (Issue and Listing of Non- Convertible Securities) (Amendment) Regulations, 2023 amends 2021 regulations to expand the scope of the definition of Green Debt Securities (GDS).
SEBI defines “Green debt security” as a debt security issued for raising funds sustainable energy, clean transportation, sustainable waste management etc.
As per new framework, projects and assets categories under GDS has been expanded to incorporate
1. Blue bonds: Comprises funds raised for sustainable water management including clean water and water recycling, and sustainable maritime sector including shipping, fishing, ocean energy and mapping etc.
2. Yellow bonds: Comprises funds raised for solar energy generation and upstream industries and downstream industries associated with it.
3. Transition bonds: Comprises funds raised for transitioning to a more sustainable form of operations, in line with India’s Intended Nationally Determined Contributions.

Significance of the move

Gives more clarity regarding what is considered ‘green’, thus preventing ‘greenwashing’.
Help in attracting sustainable finance.
Aligns extant framework for GDS with updated Green Bond Principles (GBP) recognised by IOSCO.

INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS (IOSCO)

It is the international body that brings together world’s securities regulators and is recognized as global standard setter for securities sector.
Secretariat- Madrid, Spain.
SEBI is a member of IOSCO Board.