In the context of the climate crisis, some companies see sustainable debt market instruments – green bonds, sustainability bonds, sustainability-linked bonds (SLBs), transition bonds – as a “green” way out. SLBs, a relatively new type of bond supposed to finance polluting companies’ climate transition, are especially at risk of being used as another greenwashing instrument. For example, a recent investigation revealed that HSBC counts as SLBs bonds that are linked to the disastrous EACOP project. Because of the extreme flexibility of SLBs’ structure, even highly destructive companies can label their bonds as “sustainable-linked” by only committing to marginal efforts.
The Climate Bond Initiative (CBI), which certifies sustainable debt market instruments, published its “draft proposals for the structural expansion of the Climate Bonds Standard and Certification Scheme to certify non-financial corporates and SLBs issued by non-financial corporates”. Concretely, its rules to certify SLB issuers (i.e. companies allowed to issue SLBs according to their standard) are now open for feedback. Additionally, in the same document the CBI also opens the door to strengthened criteria around green bond issuance.
Reclaim Finance answered the consultation and calls on other organizations to also submit an answer (by November 4th). This is a great opportunity to ensure that sustainable debt instruments certified by the CBI are actually tied to clear transition requirements at the issuer level.