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Role of External Reviews
- Enhanced Transparency: External reviews provide an independent assessment of an issuer’s green credentials, ensuring that information about the use of proceeds is transparent and reliable. This helps to prevent “greenwashing,” where an issuer might misrepresent the environmental benefits of a bond.
<li><strong>Comprehensive Assessment</strong>: These reviews involve a detailed evaluation of the issuer's internal processes, including project selection, tracking of proceeds, and allocation systems. This ensures that the bond is aligned with environmental objectives and meets the Climate Bonds Standard.</li>
<li><strong>Certification Process</strong>: External reviews are crucial in the certification process, which includes both pre-issuance and post-issuance phases. During these phases, approved verifiers assess whether the bond's proceeds are used for projects consistent with the Climate Bonds Taxonomy, ensuring alignment with climate change mitigation goals.</li>
<li><strong>Maintaining Certification Integrity</strong>: Post-issuance, further assurance activities may be conducted by external verifiers to ensure ongoing compliance with the Climate Bonds Standard. This periodic verification helps maintain the credibility of certified climate bonds over time.</li>
Overall, external reviews are essential for ensuring that climate bonds meet rigorous environmental standards, providing confidence to investors and enhancing the integrity of the Climate Bonds Initiative’s tracking process.
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