India has unveiled a comprehensive new regulatory framework aimed at reinforcing ESG standards and carbon neutral strategy alignment for debt securities. The Securities and Exchange Board of India (SEBI) has launched its Framework for ESG Debt Securities (excluding green bonds), covering social, sustainability, and sustainability-linked bonds (SLBs). 

This move enhances transparency, integrity, and investor trust in ESG-related financial instruments. While green bonds are already governed by a separate structure, the new framework sets clear guidelines for pre- and post-issuance disclosures, mandatory third-party reviews, and alignment with global standards such as the ICMA Principles and Climate Bonds Standard. 

Key Highlights of the Framework: 

• Use of Proceeds: To be labeled as social or sustainability bonds, the funds must support projects tied to categories like affordable infrastructure, essential services, employment generation, food security, and socio-economic advancement. 

• Mandatory Disclosures: Issuers must disclose the bond’s social objectives, target population, eligibility criteria, and fund allocation tracking methodology. Ongoing annual reports must include fund utilization updates and details on unutilized proceeds. 

• Third-Party Reviewers: Independent reviewers must certify the bonds’ alignment with global ESG standards and verify internal monitoring and impact reporting. 

• SLB-Specific Requirements: Issuers must disclose sustainability strategies, define Key Performance Indicators (KPIs), and set measurable Sustainability Performance Targets (SPTs). Third-party evaluators are required to assess the robustness and relevance of KPIs and the ambition of SPTs. 

This regulatory shift underlines India’s growing commitment to integrating ESG principles into capital markets and promoting a resilient carbon neutral strategy. By demanding transparency and accountability, SEBI is fostering credibility in India’s sustainability bond ecosystem and encouraging responsible investment flows aligned with global climate goals. 

Sumber: 

https://www.esgtoday.com/india-launches-new-regulations-for-social-sustainability-sustainability-linked-bonds/