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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Framework for Environment, Social and Governance (ESG) Debt Securities (other than green debt securities)

05-Jun-2025 | SEBI/HO/DDHS/DDHS-POD-1/P/CIR/2025/84

SEBI has issued a Circular regarding the Framework for ESG Debt Securities (excluding green debt securities), effective from 5th June, 2025. By virtue of this circular, SEBI has introduced an operational framework to facilitate issuance of ESG debt securities (excluding green debt securities), namely social bonds, sustainability bonds, and sustainability-linked bonds. Key highlights of the circular: a. The requirements under this framework are in addition to those prescribed under SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (SEBI NCS Regulations) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations). b. The framework defines the terms social bonds, sustainability bonds, and sustainability-linked bonds. c. It clarifies that if a project has both social and environmental benefits, the issuer may classify the debt security based on the primary objective of the project. d. Disclosure requirements for social bonds are outlined under Annexure A of the Framework. e. For sustainability bonds: Initial disclosure and continuous post-listing obligations are specified. Appointment of an independent third-party reviewer/certifier is mandatory. Relevant provisions are detailed in Part IX of the NCS Master Circular. f. For sustainability-linked bonds, disclosure requirements are provided under Annexure B of the Framework. g. The framework specifies the responsibilities of the issuer at the time of issuing these securities. h. It also provides measures to mitigate the risk of “purpose-washing” and to ensure that the securities remain “True to Label.” For detailed information, please refer to the attached circular.

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