SUMMARY OF MAIN CHANGES FROM CBS v4.0 to v4.1
1. New Paragraph under the “Approved Veriﬁers” section
Special Provisions relating to Regulated Entities
Certain types of regulated entities, such as Credit Rating Agencies or other regulatedorganisations which provide external review services, may apply to become Approved
External Review Providers, provided they are subject to publicly disclosed regulatory
frameworks and otherwise meet the professional competence requirements of theStandard. Such firms may opt to issue External Review Reports in accordance with theirinternal processes and procedures which will have been assessed by the Climate Bonds
Initiative and the Climate Bonds Standard Board as equivalent to internationally accepted
assurance standards.
Firms applying for the Approved External Review Provider status must submit sufficient
documentation on their internal processes and procedures to the Climate Bonds Standard
Board, via the Climate Bonds Secretariat, to enable this assessment to be made.
In the context of the Standard, the term Approved Verifier will be understood to include
Approved External Review Provider and the term Verification Report will be understood toinclude an External Review Report issued by an External Review Provider.
Existing Climate Bonds Approved Verifiers who meet the relevant criteria may apply tochange their status to Approved External Review Provider.

2. New paragraph at the beginning of the section “Overview of Useof Proceeds and Asset Certification”
For Use of Proceeds Certifications, the net proceeds of the instrument must be allocatedto any of the following:a. Projects and assets that are fully eligible under the relevant Sector Criteria applicableat the time of certification, orb. Projects and assets, up to a maximum of 5% in accordance with paragraph A.3.1.3.,
which do not fully satisfy the Sector Criteria but meet the conditions of paragraph
A.3.1.5., orc. Eligible R&D expenses in accordance with paragraph vii below.
Asset Certification requires that all projects, assets and portfolios of assets are fully
eligible under the relevant Sector Criteria.

3. Updated Deﬁnition of R&D in the section “Overview of Use ofProceeds and Asset Certification”
vii. Eligible R&D expenditure:a. Any early or later stage expenditure relating to the research, applied research andexperimental development of solutions, processes, technologies, business models andother products dedicated to the substantial reduction, avoidance or removal of GHG
emissions for which the ability to substantially reduce, remove or avoid GHG emissions
has been demonstrated in a relevant environment, corresponding to at least Technology
Readiness Level (TRL)61.
b. For the avoidance of doubt, this includes expenditure related to research, appliedresearch and experimental development, to bring the solution, process, technology,
business model or other product through TRLs 1-5. In addition, funds or subsidy schemes
incentivising early stage R&D (TRL1 to TRL5) may be considered eligible if aiming to bring
the solution, product or technology to TRL6.
c. Substantial reduction, removal or avoiding GHG emissions requires the R&D to:1) Provide research, development or innovation for technologies, products or othersolutions that enable an economic asset or activity to meet the respective Sector
Criteria under the Climate Bonds Standard; or2) Aim to bring to market a solution that is expected to have a substantially better
performance in terms of life-cycle GHG emissions than best commercially available
technologies based on public or market information or which substantially improves
their technological and economic feasibility in order to facilitate their scaling up.
d. TRL6 or above must be demonstrated as follows:(1) TRL6 requires that the technology is fine-tuned to a variety of operating conditions,the process is reliable, and the performances match the expectations, interoperability
with other connected technologies is demonstrated, the manufacturing approach isclearly defined, and that all environmental, regulatory and socio-economic issues areaddressed.
(2) Where the researched, developed or innovated technology, product or other solution
is at TRL 6 or 7, life- cycle GHG emissions are evaluated in simplified form by the entity
carrying out the research. The entity demonstrates one of the following, whereapplicable: (a) a patent not older than 10 years associated with the technology,
product or other solution, where information on its GHG emission reduction potential
has been provided; (b) a permit obtained from a competent authority for operating
the demonstration site associated with the innovative technology, product or othersolution for the duration of the demonstration project, where information on its GHG
emission reduction potential has been provided.
(3) Where the researched, developed or innovated technology, product or other solution
is at TRL 8 or higher, life- cycle GHG emissions are calculated using Recommendation
2013/179/EU or, alternatively, using ISO 14067:2018 or ISO 14064-1:2018 and areverified by an independent third party.
e. Where the R&D expenditure relates to products, solutions or activities for which Climate
Bonds has not yet developed Sector Criteria, the eligibility will be individually assessed ona case-by-case basis. In making such assessments, Climate Bonds may rely on
independent expert reports or opinions.
f. R&D expenditure must be continually assessed by the Issuer to ensure that the relevant
1In line with Annex G of the General Annexes of HORIZON 2020 WORK PROGRAMME 2016 2017, p.29 (version of 4.6.2021:
https://ec.europa.eu/research/participants/data/ref/h2020/other/wp/2016-2017/annexes/h2020-wp1617-annex-ga_en.pdf).

climate-related goals are being achieved. The results of the assessment must be disclosed
in the annual Update Report in accordance with paragraph A.3.4.
g. All R&D expenditure must be independently verified by a Climate Bonds Approved
Verifier at least on an annual basis until the related technology reaches TRL6 or higher.

4. New paragraphs A.3.1.2 to A.3.1.5 after paragraph A.3.1.1.
A.3.1.2. All Nominated projects and assets must meet the documented objectives of thedebt instrument as set out in the Issuer’s Green Finance Framework.
A. 3.1.3. Issuers must allocate at least 95% of the net proceeds of the debt instrument toprojects and assets that meet the Sector Criteria requirements of the Standard.
A.3.1.4. For any part of the net proceeds that finance projects and assets that do not fully
satisfy the Sector Criteria requirements (up to 5%), the Issuer must provide detailed
disclosures in the Green Finance Framework.
A.3.1.5. Any Nominated Projects and Assets which do not fully satisfy the Sector Criteria may
be considered eligible if they meet all of the following conditions:i. They must relate to sectors for which Climate Bonds has not yet developed Sector Criteria;
andii. They must fall under any of the Green Project categories listed in the ICMA Green BondPrinciples or the ICMA Social Bond Principles; andiii. The Verification Report opinion must confirm their alignment with the ICMA Green/SocialBond principles
iv. They must not relate to any of the following excluded activities:• The exploration, extraction or transportation of proven conventional or unconventional
fossil fuel reserves.
• Natural gas production.
• Refining crude oil to produce derivative products.
• The supply and/or use of fossil fuels for power generation and heat.
• Conversion or fragmentation of high-carbon-stock land or unsustainable operations on
high-carbon stock land leading to the loss of its status as high-carbon stock land.

5. New paragraph A.3.4.8.iii (Eligibility Reporting Contents)
Where the issuer has made use of the 5% flexibility pocket in accordance with paragraph
A.3.1.3, the percentage of the use of proceeds allocated to, and a detailed description of, theNominated projects and assets which do not fully satisfy the Sector Criteria.