ICMA Updates Climate Transition Finance Handbook and Sustainability-Linked Bond Principles

On June 22, 2023, the International Capital Markets Association (ICMA) issued its first update of its Climate Transition Finance Handbook (CTFH) since its original publication in December 2020¹ and an updated version of its Sustainability-Linked Bond Principles (SLBPs).

In its related press release, ICMA states that the updated CTFH:

[I]ntegrates the progress made by the market and the official sector on climate transition guidance and disclosures. The document includes dedicated recommendations for climate-themed green, sustainability and sustainability-linked bonds and acknowledges the development of “climate transition” bonds in certain jurisdictions. It includes new annexes with illustrative disclosures, infographics and a list of wider market and official sector guidance for climate-themed bonds.

ICMA’s Green, Social, Sustainability and Sustainability-Linked Bond Principles (Principles) were also concurrently supplemented by further guidance, specifically:

• Additional Q&As for green, social and sustainability bond securitization;
• Revised language for the Social Bond Principles (SBP) confirming notably the need to identify target populations and, separately, specific guidance for impact reporting for Social Bonds;
• Updates to the core recommendations for impact reporting for Green Bonds and impact reporting metrics for energy efficiency and renewable energy;
• A revised mapping to the United Nations’ Sustainability Development Goals ( SDGs); and
• Updated issuer information templates and external review forms.

ICMA also noted that these updates to the Principles will be discussed at the 2023 Annual Conference of Principles to be held in hybrid format in Singapore on Wednesday, 28 June, with the Monetary Authority of Singapore as the supporting partner. The conference agenda features a discussion on the key updates of the 2023 guidance from the Principles and incorporates the Asia Pacific perspective. The annual conference will also cover the critical topics currently being debated in sustainable finance including regulation, market integrity and climate transition finance.

¹Described in our related December 10, 2020, Legal Update “ICMA Issues Climate Transition Finance Handbook and FAQs.”