External Review and Best Practice Guidance

Bonds labelled green by the issuer should be qualified as green by an independent third party

Issuers have the opportunity to distinguish their bonds as truly green through Climate Bonds Certification, the market's gold standard for external review. While providing essential information on the green eligibility criteria for the use of proceeds is a minimum requirement, issuers can enhance transparency by commissioning an external review of their green credentials.

These reviews come in various forms, ensuring a comprehensive assessment. For more information on the types of review available, refer to the tables below. By obtaining Certification under the longstanding Climate Bonds Standard and Certification Scheme, issuers uphold the pinnacle of market best practice.

Stand out from the crowd and demonstrate your commitment to sustainability. Choose Climate Bonds Certification for unparalleled credibility and trust in the green bond market. Join the ranks of visionary issuers driving the transition to a greener future.

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Pre-issuance reviews

TYPE OF REVIEW	WHAT IT COVERS	SERVICE PROVIDERS	EXAMPLES
Third party Assurance	Assurance reports state whether the green issuance is aligned with a reputable international framework, such as the Green Bond Principles (GBP) or Green Loan Principles (GLP)	Accounting / audit firms	KPMG Assurance Report commissioned by IDBI Bank Deloitte’s Assurance Report commissioned by CGN
Second Party Opinion (SPO)	SPOs provide an assessment of the issuer’s green bond framework, analysing the “greenness” of eligible projects/assets. Some also provide a sustainability "rating", giving a qualitative indication of aspects of the issuer's framework and planned allocation of proceeds	Environmental Social Governance (ESG) service providers (such as Oekom, Sustainalytics, Vigeo Eiris, DNV GL) and scientific experts (such as CICERO, CECEP Consulting). Other environmental consultants and assessment organisations.	DNV GL SPO commissioned by Arise AB Sustainalytics’ SPO commissioned by the Development Bank of Japan Kestrel Verifier's SPO commissioned by the Sacramento Municipal Utility District ("SMUD")
Green Bond Rating	A number of rating agencies assess the bond’s alignment with the Green Bond Principles and the integrity of its green credentials	Rating agencies such as Moody’s, S&P Global Ratings, JCRA, R&I, RAM Holdings	Moody’s Green Bond Rating assigned to Banco Nacional de Costa Rica’s USD500m green bond S&P’s Green Evaluation assigned to Province of La Rioja’s USD200m green bond
Pre-issuance verification of the Climate Bonds Certification according to the Climate Bonds Standard	The Climate Bonds Standard is the only Paris Agreement aligned standard available in the market. Independent verification confirms that the use of proceeds adhere to the Climate Bonds Standard and sector specific criteria (e.g. Low Carbon Transport)	Verifiers approved by the Climate Bonds Standard and Certification Scheme	Oekom (now known as ISS ESG) ’s independent verification statement of ABN Amro’s EUR500m green bond First Environment’s independent verification statement of Los Angeles County MTA’s USD471m green bond

Post-issuance reviews

TYPE OF REVIEW	WHAT IT COVERS	SERVICE PROVIDERS	EXAMPLES
Second party or third party assurance report	Assurance of allocation of proceeds to eligible green projects.	Audit firms, ESG research service providers (Oekom, Sustainalytics) and scientific experts	DNV GL 2018 Assurance report for NAB’s AUD300m 2014 green bond
Impact reporting	Reporting that seeks to quantify the climate or environmental impact of a project/asset numerically	Issuer, Audit firms, ESG research service providers (Oekom, Sustainalytics) and scientific experts	HSBC’s green bond report Iberdola’s Sustainability Report 2016, and PWC’s independent Assurance report (pg. 266) Berlin Hyp Green Bonds Impact Report (June 2016)
Post-issuance verification of the Climate Bonds Certification according to the Climate Bonds Standard	Assurance against the Climate Bonds Standard, including the allocation of proceeds to eligible green projects and types of green projects	Verifiers approved by the Climate Bonds Standard and Certification Scheme	EY’s post-issuance report for Westpac’s AUD500m 2016 green bond KPMG’s post-issuance report for Axis Bank’s USD500m 2016 green bond

“Our ambition is to issue a “dark green” bond. The certificate which we, as the State of the Netherlands, have obtained from the Climate Bonds Initiative is tangible evidence of this ambition. Our aim is to give an extra boost to the Dutch green capital market through the issuance of the Green Bond.”

— Wopke Hoekstra, Minister of Finance, DSTA, Netherlands & Certified Climate Bond Issuer

“Climate Bonds Certification provides issuers with an independent and science based standard to showcase the greenness of their green bond assets. Investors appreciate issuers who go the extra mile by providing transparent and ambitious criteria using Climate Bonds standards”

— Joop Hessels, Executive Director, Head of Sustainable Markets at ABN AMRO Bank N.V. & Certified Climate Bond Issuer

Disclaimer: The information contained in this document does not constitute investment advice in any form or any invitation or inducement to engage in investment activity and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or debt instrument or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for any content on any external website. Certification under the Climate Bonds Standard relates exclusively to the conformity of one or more designated debt instruments, designated assets and/or designated entities with the applicable Climate Bonds Standard at the time of certification. Certification under the Climate Bonds Standard carries no implication (and should not be understood as carrying any implication) as to any other aspect of any debt instrument or investment product or any collection of debt instruments or investment products or any asset or entity or group of assets or entities or as to continuing conformity at any time after the time of certification. In particular, such certification carries no implication (and should not be understood as carrying any implication) that any stated target has been or will at any time be met or that any particular legal or regulatory requirement has been or will be satisfied. The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or (subject to the previous paragraph) any other aspect of any debt instrument or investment product or any collection of debt instruments or investment products or any asset or entity or group of assets or entities and no information within this document should be taken as such, nor should any information in this document be relied upon in making any investment decision. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment made by an individual or organisation, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative document.

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External Review

External Review and Best Practice Guidance