Review of Chapter IX – Green Debt Securities of the Operational Circular for issue and listing of Non-Convertible Securities (NCS)
Summary
This circular revises Chapter IX of the NCS Operational Circular to align green debt securities regulations with the updated Green Bond Principles. It mandates specific initial and continuous disclosure requirements for issuers, including environmental objectives, use of proceeds, and impact reporting. The provisions apply to all issues launched on or after April 1, 2023, with a two-year 'comply or explain' transition period for third-party verification. This section outlines the mandatory disclosure formats for major environmental indicators under Annex I of the BRSR framework. It requires entities to report data on energy consumption, water usage, emissions, and waste management across specified parameters. The document further details leadership indicators focusing on renewable energy sources and water discharge metrics in stressed areas. This section mandates the disclosure of water withdrawal, consumption, and discharge metrics along with their treatment levels. It requires reporting on Scope 3 greenhouse gas emissions, including intensity calculations and optional metrics. The entity must also detail impacts on biodiversity, resource efficiency initiatives, disaster managemen
Text
Chapter IX of the SEBI Circular... specifies the following with reference to issuers of green debt securities: (a) Additional disclosure requirements in the offer document; (b) Continuous disclosure requirements in annual report and financial results; and (c) Responsibilities of the issuer
In the backdrop of increasing interest in sustainable finance... SEBI undertook a review of the regulatory framework for green debt securities to align with the updated Green Bond Principles (GBP) recognised by IOSCO
An issuer desirous of issuing green debt securities shall make the following additional disclosures in the offer document for public issues / private placements: 1.1 A statement on environmental sustainability objectives of the issue of green debt securities
Brief details of decision-making process followed/proposed for determining the eligibility of project(s) and/or asset(s)... such as: a) Process followed/ to be followed for determining how the project(s) and/or asset(s) fit within the eligible green projects categories... b) The criteria making the project(s) and/ or asset(s) eligible... c) Details of taxonomies, green standards or certifications... d) Details of the alignment of the objective of the issue with the India’s Intended Nationally Determined Contributions in case of the proceeds raised though issuance of transition bonds
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
Details of an indicative estimate of distribution of proceeds raised though issuance of green debt security between financing and refinancing of project(s) and/ or asset(s); if applicable
Details of the intended types of temporary placement of the unallocated and unutilised net proceeds from the issue of green debt securities
Details related to the perceived social and environmental risks and proposed mitigation plan associated with the project(s) proposed to be financed/ refinanced through the proceeds from the issue of green debt securities
The issuer shall 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. The said requirement... is applicable on a ‘comply or explain’ basis for a period of two years
An issuer who has listed green debt securities, shall provide following additional disclosures along with its annual report and financial results: 2.1 Utilisation of the proceeds of the issue... verified by the report of an external auditor, to verify the internal tracking method and the allocation of funds
Details of unutilized proceeds including the temporary placement/utilization of unallocated and unutilized proceeds from each ISIN of green debt security issued by the issuer
You have read the preview. Create a free account to read the full document and see every order that applied it.
Free accounts include 10 searches/day with full text access.
Source: SecMarx — Review of Chapter IX – Green Debt Securities of the Operational Circular for issue and listing of Non-Convertible Securities (NCS). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.