The Securities and Exchange Board of India (SEBI) published a Consultation Paper on Green and Blue Bonds as a mode of sustainable finance on August 4 2022. SEBI, through this consultation paper, is seeking public comments on a proposed regulatory framework:
- to amplify the definition of green debt securities,
- to introduce the concept of blue bonds
- to reduce the compliance cost for issuers of green debt securities with while not creating any perverse incentives that may lead to ‘greenwashing’.
We welcome SEBI’s initiative to seek comments and suggestions on this critical area. SEBI’s consultation paper has posed some questions on new initiatives such as blue bonds as well as has stated some modifications to existing guidelines with respect to disclosure norms for green bonds, disincentives for greenwashing, etc. Our comments and suggestions focus on the green bonds disclosures and disincentives for greenwashing aspects.
Our comments and suggestions are towards encouraging rigorous end use monitoring, issuer accountability and transparency in the Indian green bond market. We hope that this finally leads to strong investor participation in Indian green bonds and aids green bond policy formulation and maturation.