Disclosure Requirements for Issuance and Listing of Green Debt Securities
Summary
This circular establishes specific disclosure and compliance requirements for the issuance and listing of Green Debt Securities under SEBI regulations. It defines Green Debt Securities based on eligible environmental categories such as renewable energy, clean transportation, and biodiversity conservation. Issuers are mandated to disclose project eligibility criteria, fund tracking mechanisms, and continuous performance metrics in their offer documents and annual reports.
Text
A Debt Security shall be considered as „Green‟ or „Green Debt Securities‟, if the funds raised through issuance of the debt securities are to be utilised for project(s) and/or asset(s) falling under any of the following broad categories: Renewable and sustainable energy, Clean transportation, Sustainable water management, Climate change adaptation, Energy efficiency, Sustainable waste management, Sustainable land use, Biodiversity conservation, or any other category specified by Board.
The issuer of a Green Debt Securities shall make following disclosures: A statement on environmental objectives of the issue of Green Debt Securities.
Brief details of decision-making process issuer has followed/would follow for determining the eligibility of project(s) and/or asset(s), for which the proceeds are been raised through issuance of Green Debt Securities. An indicative guideline of the details to be provided is as under: process followed/ to be followed for determining how the project(s) and/or asset(s) fit within the eligible green projects categories; the criteria, making the project(s) and/or asset(s) eligible for using the Green Debt Securities proceeds; and environmental sustainability objectives of the proposed green investment.
Issuer shall provide the details of the system/procedures to be employed for tracking the deployment of the proceeds of the issue.
Details of the project(s) and/or asset(s) or areas where the issuer, proposes to utilise the proceeds of the issue of Green Debt Securities, including towards refinancing of existing green project(s) and/or asset(s), if any.
The issuer may appoint an independent third party reviewer/certifier, for reviewing /certifying the processes including project evaluation and selection criteria, project categories eligible for financing by Green Debt Securities, etc. Such appointment is optional and is at the part of issuer, however any such appointment of reviewer/certifier shall be disclosed in the offer document.
Following shall be provided along with the half yearly and annual financial results: Utilisation of the proceeds of the issue, as per the tracking done by the issuer using the internal process as disclosed in offer document/disclosure document. The utilisation of the proceeds shall be verified by the report of an external auditor, to verify the internal tracking method and the allocation of funds towards the project(s) and/or asset(s), from the proceeds of Green Debt Securities.
Details of unutilized proceeds.
Following additional disclosures have to be provided along with annual report: List of project(s) and/or asset(s) to which proceeds of the Green Debt Securities have been allocated/invested including a brief description of such project(s) and/or asset(s) and the amounts disbursed. However, where confidentiality agreements limit the amount of detail that can be made available about specific project(s) and/or asset(s), information shall be presented about the areas in which such project(s) and/or asset(s) fall into.
Qualitative performance indicators and, where feasible, quantitative performance measures of the environmental impact 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.
Methods and the key underlying assumptions used in preparation of the performance indicators and metrics;
An issuer of Green Debt Securities shall: maintain a decision-making process which it uses to determine the continuing eligibility of the project(s) and/or asset(s). This includes, without limitation a statement on the environmental objectives of the Green Debt Securities and a process to determine whether the project(s) and/or asset(s) meet the eligibility requirements.
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Source: SecMarx — Disclosure Requirements for Issuance and Listing of Green Debt Securities. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.