Issuers are advised to commission external reviews for their green credentials at least at the pre-issuance stage of a green bond. These reviews help confirm alignment with principles such as the Green Bond Principles (GBP) and enhance credibility among investors. While the frequency of reviews beyond the initial issuance can vary, for sustainability-linked bonds, annual post-issuance verification is required to assess performance against selected key performance indicators (KPIs).
Here are the key points regarding when issuers should commission external reviews:
- Pre-issuance reviews are recommended to assess the green credentials of the bond framework and eligible projects.
- Post-issuance reviews are typically required for sustainability-linked bonds at least annually to verify performance against set targets.
- General best practice suggests transparency through regular disclosure, potentially involving additional external reviews as needed or as the bond program evolves.
Overall, the frequency of external reviews can depend on the type of bond and the issuer’s objectives, with sustainability-linked bonds having more specific requirements.
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