Climate Bonds Initiative Green Bond Database Methodology
Contents
Climate Bonds Initiative Green Bond Database Methodology ....................................................................................................... 1
Introduction................................................................................................................................................................................ 2
Overview of the Climate Bonds Initiative Green Bond Database screening process ................................................................. 3
Climate Bonds Initiative Green Bond Database and other labelled bonds ................................................................................ 4
Climate Bonds Taxonomy and the Green Bond Database methodology ................................................................................... 5
Certification under the Climate Bonds Standard and the Green Bond Database ...................................................................... 6
Disclosure requirement for inclusion in the Climate Bonds Green Bond Database ................................................................... 7
Climate Bonds Initiative Green Bond Database screening process in detail .............................................................................. 8
1. Identification of green bonds ............................................................................................................................................. 8
2. Screening sectors and green credentials ............................................................................................................................ 8
3. Evaluating the use of proceeds ........................................................................................................................................ 10
Pending deals and resolution process ...................................................................................................................................... 12
Re-classification of a bond ....................................................................................................................................................... 12
Change in screening methodology ....................................................................................................................................... 12
Change in the definition of alignment .................................................................................................................................. 12
Annex A: The Climate Bonds Taxonomy ................................................................................................................................... 13
Annex B: Green definitions for the Climate Bonds Initiative Green Bond Database ............................................................... 14
Annex C: The Climate Bonds Standard and Certification Scheme ............................................................................................ 19
Annex D: Eligible projects and assets under the Climate Bonds Standard ............................................................................... 20
Eligible assets and projects under Climate Bonds Standard version 3.0 (NEW, BEING PHASED IN) .................................... 20
Eligible Projects & Assets as defined in the Climate Bonds Standard version 2.1 (BEING PHASED OUT) ............................ 20

Climate Bonds Initiative Green Bond Database Methodology–September 2020

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Debt universe: Self-labelled debt instruments, with a focus on the green bond label
Main sector screening reference: Climate Bonds Taxonomy as amended from time to time

Introduction
The Climate Bonds Initiative screens self-labelled debt
instruments to identify bonds and similar debt instruments
as eligible for inclusion in the Climate Bonds Initiative
Green Bond Database (the Database). The screeningreferences the Climate Bonds Taxonomy, albeit using amodified sector list rather than the taxonomy indicators.
This document provides information on the approach andthe database maintenance process.
There are three overarching prerequisites:
1. Debt instrument, includes but not limited to bonds,
asset-backed securities and loans.
2. Self-labelled, defined as a conscious decision by theissuer to label the instrument. Deals, which finance theright types of assets, projects and activities, but are notself-labelled by the issuer, are not included.
3. Public disclosure that is sufficient to (1) determine if
the financed assets / projects / activities are “green”
and (2) allow inclusion of the debt instrument, mostnotably an amount outstanding and closing /settlement confirmation (issue date).
Notably, the label is used primarily to identify self-labelled
debt. All labels are considered (see page 8). Once past theinitial screening, the process looks beyond the actual label
and evaluates the assets, projects and activities being
financed to determine if the debt warrants inclusion in the
Climate Bonds Initiative Green Bond Database, or anotherlist/database, maintained by the Climate Bonds Initiative,e.g. as the social and sustainability bond database.
The screening is based on two key aspects: eligible sectors
and eligible use of proceeds.
Eligible sectors for assets, projects and/or activities
The screening seeks to determine general alignment to the
Climate Bonds Taxonomy (see Annex A). The Taxonomy
provides two levels of information:

The 2oC indicators (b) are also used to inform the analysis.
These indicators are sector and subsector specific. Theylink to Sector-Specific Criteria, developed or being
developed together with scientific and other technical andindustry experts, for the purpose of Certification under the
Climate Bonds Standard, a labelling scheme for financial
instruments that are 2oC-compliant (see Annex C).
Green bonds included in the Climate Bonds Green Bond
Database are not expected to meet the requirements for
Certification (although some might, if assessed). Rather,
the Sector Criteria are used to determine the level ofambition and allow the screening out of less ambitious
deals. Climate Bonds is an advocate for high levels of
ambition, i.e. deals that deliver decarbonisation sooner andwould help keep global warming to 1.5oC. So, over time therequirements are expected to tighten and converge.
Climate Bonds Initiative has also started using the EU
Sustainable Finance Taxonomy as a point of reference incases where Climate Bonds has not yet developed its own
guidance and/or Sector Criteria but is supportive of theapproach used in the EU Taxonomy. For the databasemethodology the Climate Bonds Taxonomy and Sector
Criteria are the first port of call.
More information: section “Climate Bonds Taxonomy andthe EU Sustainable Finance Taxonomy”; Annex A.
Eligible use of proceeds
Historically, the focus has been on direct financing ofphysical assets and projects and indirect financing thereof(e.g. loans to suitable assets / projects). Annex D provides
the expanded eligibility list from the new Climate Bonds
Standard version 3.0, which now includes physical assets
and projects, financing thereof and certain expenses.
More information: sections “Climate Bonds Standard andCertification Scheme” and “Climate Bonds Initiative Green
Bond Database screening process”, Annex C and Annex D.

a) broad guidance on eligible sectors and subsectors, andClimate-change mitigation, adaptation and resilienceb) Sector specific metrics and indicators that identify
assets, projects and activities consistent with the Paris
Agreement.

Most green bond financing to date has been allocated toclimate change mitigation. However, climate change
adaptation and resilience (A&R) measures are also eligible.

The methodology’s sector screening is primarily based on
the first level (a). The Climate Bonds Initiative green bonddatabase methodology uses an adapted list of eligible
sectors and types of assets, projects and activities (seeAnnex B).

Climate Bonds’ Climate Resilience Principles provide aframework for issuers to demonstrate that for the assets
and activities (re)financed via the bond they understandthe related climate risks, have identified measures that
address them and can deliver resilience benefits, and the

Climate Bonds Initiative Green Bond Database Methodology–September 2020

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financing is provided to implement them. As risks areidiosyncratic given geography, climate profile andoperations, suitable measures would be context-specific.

measures do not involve unacceptable mitigation tradeoffs, e.g. fossil fuel power generation lock-in. Until suchguidance is developed, A&R-related bonds and measures
will be considered on an ad hoc basis, engaging the issuer
for dedicated A&R bonds, while the need for consultation
will be determined based on materiality for other bonds.
Climate Bonds may also draw on experts from its network.

Over time, A&R will be integrated in Climate Bonds’ Sector
Criteria. Specific assessment tools and/or indicators are
expected to be developed to help determine that A&R

Overview of the Climate Bonds Initiative Green Bond Database screening process
As noted, the overarching prerequisites include selflabelled debt instrument, defined as a conscious decisionby the issuer to label the instrument in a public document,
and public disclosure that is sufficient to determine if thefinanced assets / projects / activities are “green” and toallow inclusion of the debt instrument in the Climate Bonds
Initiative Green Bond Database.

adapted from the Climate Bonds Taxonomy and
Sector Criteria). Notably, eligible expenses are a new
aspect, in line with the proposed EU Green Bond
Standard, but the eligibility rules are stricter. Moreinformation is provided in the section on
certification and the details of screening below.
3. Evaluating the use of proceeds threshold. Only
bonds which are expected to allocate all net
proceeds to aligned green assets, projects oractivities are included in the Climate Bonds Initiative
Green Bond Database.

Assuming these are met, the three-step screening process
to classify a green bond as eligible covers the following:
1. Identification of climate-themed, self-labelled debt;
2. Screening sectors and green credentials todetermine if the proceeds will finance eligible
expenses, assets, projects or activities are in linewith the Green Definitions in Annex B (which is

Deal meets CBI GB DB** Instrument& disclosure requirements
Certified Climate
Bond*

Climate Bonds Initiative’s decision tree is summarised
below:

Aligned Green Bond List

Non-debt instrument

Separate non-debt
instrument database

Confidential deals

Confidential deals
list***

Deal does not meet CBI GB DB
Instrument & disclosure
requirements

Debt labelled by
the issuer

Debt meets CBI UoP and other CBI
GB DB requirements

Aligned Green Bond List

Debt does not meet CBI GB DB
requirements

Non-aligned Green Bond List

Green label

Aligned Green Bond List
Debt meets CBI UoP and other CBI
GB DB requirements
Social and sustainability bond list
Other labels
Debt does not meet CBI GB DB
requirements

Social and sustainability bond list

Glossary:
Green bond framework: An
issuance framework which defines
eligibility categories for use ofproceeds and reporting.
UoP: Use of proceeds, a.k.a.
proceeds allocations
External reviews confirm
compliance with the Green Bond
Principles (GBP) or Green Loan
Principles (GLP). Reviews include
second party opinions, green bondratings, assurance, etc.
Certified Climate Bonds (bonds,
loans, debt programmes, deposits
and other instruments) are
Certified under the Climate Bonds
Standard. The GHG emissions
profiles of the assets / projects areverified by an Approved Verifier
against Sector Criteria to determine
if the assets/projects being
financed are on a trajectory to fulldecarbonisation by 2050.

* Certified Climate Bond/Loan is fully alignment with the Green Bond Principles/Green Loan Principles. It
can be considered as a subset of the green bond/loan market.
** Climate Bonds Initiative Green Bond Database (CBI GB DB)*** Confidential Certified Climate Bond list is not available to the public or data partners.

Climate Bonds Initiative Green Bond Database Methodology–September 2020

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Certified Climate Bonds were previously identified as
automatically included. However, Certification can beapplied very widely, including, but not limited to, non-debt
instruments (e.g. deposit schemes), directly to assets or
projects (with no debt wrapper), private / confidential
deals, and/or on a programmatic basis where debt may nothave been issued or outstanding.

By contrast, the green bond database captures labelleddebt instruments, which have settled with a defined
amount outstanding and for which there is at least aminimum level of public information (amount issued, issue
date, type of instrument). Consequently, there may be
Certified deals which do not meet the instrument anddisclosure requirements for inclusion in the Climate Bonds
Initiative Green Bond Database.

Climate Bonds Initiative Green Bond Database and other labelled bonds
The screening methodology allows the classification of labelled debt. Climate Bonds Initiative curates and maintains the
Climate Bonds Initiative Green Bond Database, which contains the bonds that have passed the screening. It also curates andmaintains further lists of labelled debt as detailed below.
Database

Sub-datasets & Definition

Availability

Green Bond Database

Aligned list

Basic information isavailable to all Climate
Bonds Partners throughthe Climate Bonds Partners
PortalA list of labelled bonds and other debt instruments, which
allocate all net proceeds to eligible sectors and comply withthe criteria described in this methodology.
Sustainability and SDG labelled bonds often have climaterelated and social allocations. If the social assets / projects
are also climate-related, i.e. “green”, they are included inthis green bond database with the original label recorded.

Non-aligned list
A list of labelled green bonds and similar debt instruments,that fail to meet the criteria for inclusion in the Climate
Bonds Initiative Green Bond Database. Such bonds may
meet local green bond rules: e.g. China’s green bondcatalogue (2015 version) used to allow the so-called “cleancoal” projects, but Climate Bonds Initiative does not.
Pending list
A list of labelled bonds and similar instruments for which
there is insufficient information to determine eligibility
initially, and where they are kept temporarily. Upon further
investigation, the bond may be categorised as aligned or
non-aligned.
Repacks list
A list of labelled debt instruments, primarily ABS but also
bonds, which invest in green bonds that meet the screening
criteria. Repacks are not included to avoid double counting.
Social and Sustainability
Bond Database

A list of debt instruments that carry various labels, including
but not limited to Social, Sustainability, SDG, ESG, and Covid,

Climate Bonds Initiative Green Bond Database Methodology–September 2020

Comprehensive
information is available toPremium and Advanced
Climate Bonds Partners
only, under a data licensing
arrangement
Available to Premium andAdvanced Climate Bonds
Partners only, under a data
licensing arrangement

Available to Premium andAdvanced Climate Bonds
Partners only, under a data
licensing arrangement

Available to Premium andAdvanced Climate Bonds
Partners only, under a data
licensing arrangement
A comprehensive list will
be available soon.

PAGE 4

but do not meet the use of proceeds and other CBI Green
Bond Database requirements.

Note: The label is used primarily to identify bonds for screening, but the assessment of the green credentials is based on theassets, projects or activities financed.
Labelled loans
Historically, Climate Bonds has included labelled loans in
the Climate Bonds Initiative Green Bond Database, or in thevarious related lists. We are now in the process of
separating loans into a stand-alone labelled loan database,structured in the same manner as the Climate Bonds
Initiative Green Bond Database, i.e. including a green loanlist, sustainability loan list, sustainability-linked loans, social
loan list, and non-aligned loans.
When this split occurs, Climate Bonds will provide a beforeand-after reconciliation. All the above commentary anddistinctions will apply in the same way to loans as they doto the bond universe. This includes the self-labelling anddisclosure pre-requisites for inclusion in the database.
Labelled versus unlabelled climate-related debt
Unlabelled climate-related debt is not included in the
Climate Bonds Initiative Green Bond Database. While it isacknowledged that any debt which finances climate-friendly assets, projects and activities supports climate
goals, the fact that the debt is not labelled is seen as anindication that the issuer is not committed to the greenlabel. This could be because the issuer does not wish toprovide disclosure, e.g. allocations reporting, and/or is notprepared to limit financing only to pre-defined eligible
categories of assets, projects and activities.
Climate Bonds Initiative also curates and maintains a
database of climate-aligned issuers and outstanding
unlabelled climate-aligned bonds. Upon screening theissuers’ business in a similar manner to green bonds
against the Climate Bonds Taxonomy, issuers are included
if at least 75% of their revenues derive from aligned
business lines, and they have outstanding debt.
The climate-aligned database is not covered by thismethodology document and is only available under special
arrangements with Premium Climate Bonds Partners.

Climate Bonds Taxonomy and the Green Bond Database methodology
The Climate Bonds Taxonomy and Sector Criteria are used
to determine the issuer’s level of climate ambition andallow the informed screening out of less ambitious deals in
the context of the Climate Bonds Initiative Green Bond
Database methodology.
The Criteria can change over time as science, technologies,
regulations, policy and climate thinking evolve. For
instance, Climate Bonds has integrated adaptation andresilience considerations in more recently developed
criteria (e.g. Waste, Hydropower) and intends to revise
older criteria (e.g. Transport) to incorporate such aspects
and/or update metrics and tighten requirements and/or
add subsectors. The most recent list will be available at:https://www.climatebonds.net/standard/sector-criteria
Annex B provides the assessment guidelines for the
Climate Bonds Initiative Green Bond Databasemethodology. While based on the Climate Bonds
Taxonomy and informed to a degree by Sector Criteria, theguidelines have been adapted so as to:(1) allow assessment in the absence of metrics disclosure
and/or third-party verification of metrics; and(2) relax the requirements for the more challenging sectors
so as not to stifle the green bond market prematurely.

For some sectors where measurement is less of an issue(e.g. solar, wind) or metrics are typically met by certain
types of assets (e.g. rail excluding fossil fuel freight), themethodology follows the Taxonomy quite closely.
For sectors where metrics are not readily available and/or,
if reported, metrics need further assessment against abenchmark or proxy and/or available information needs tobe further analysed and mapped against criteria, themethodology uses adapted approaches.
For Buildings, for instance, Sector Criteria seek to establish
decarbonisation trajectories appropriate for different cities
and regions. The sector has not been forthcoming with
operational data to benchmark emissions performance andset appropriate trajectories, and the building standards
that are being used by the industry do not have asufficiently robust mitigation focus, i.e. do not provide
good evidence of mitigation impact. A series of proxies forbuildings, including a proxy of LEED Gold or Platinum plus
30% improvements on the level of ASHRAE 90.1, are thus
used for Certification under the Climate Bonds Standard.
The buildings industry and property sector, however, areusing the wider range of available building certification
schemes as evidence of green impact. So the methodology
takes a pragmatic approach based on the information that

Climate Bonds Initiative Green Bond Database Methodology–September 2020

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is more readily available for property financing, i.e. building
certification schemes and energy efficiency ratings.
The approach taken in this methodology seeks high levelsof ambition from green bond issuers, but it accepts lower
levels of building certification than the LEED Gold proxyused for Certification and a variety of well-establishedinternational and local certification schemes and energy
performance rating schemes. The methodology also
accepts 25%+ improvements in energy performance forretrofits versus the 30%+ requirement for Certification.
Criteria in advanced stages of development or in public
consultation may be used for screening under the Climate
Bonds Initiative Green Bond Database Methodology even
before adoption for Certification subject to consultation
with the Climate Bonds Standards Team, which manages
criteria consultation with technical and industry expert
groups.
Over time, the requirements for inclusion will be tightened.
In this update, for instance, we are tightening therequirements for buildings as follows:

will be excluded. Also, there will be increased focus oninternational and strong national certification schemes,
rather than accepting all building certification schemes.
This applies to energy efficiency ratings (e.g. EPC), too.
• Building upgrades: we are increasing the energy
performance improvement threshold from 20% to 25%,
except where this is delivered in combination withother measures (e.g. reduction in water consumption).
Changes in assessment criteria will be notified, but as a
general rule the aim is to encourage high levels of
ambition in the green bond market and promote rapidtransition to a low carbon economy.
Climate Bonds Taxonomy and the EU Taxonomy
In March 2020 the EU released a proposed EU taxonomy ofsustainable activities. The EU taxonomy may be used as apoint of reference or proxy for sector-specific criteria forwhich there are currently no Climate Bonds Sector Criteria.
This will be re-assessed as Climate Bonds Initiative
develops and releases new Sector Criteria, or formallydecides to adopt EU taxonomy metrics.

• Building certification levels: assets / projects that satisfy
only the bottom (least ambitious) level of certification

Certification under the Climate Bonds Standard and the Green Bond Database
The Climate Bonds Standard and Certification Scheme issummarised in Annex C.

the Certified Climate Bond continues to meet theCertification requirements.

Debt instruments or other financing arrangements
Certified under the Climate Bonds Standard are expectedto satisfy the sector eligibility requirements for inclusion in
the Climate Bonds Initiative Green Bond Database (as laidout in the Introduction).

A summary of cases where the debt or other financing
instruments Certified under the Climate Bonds Standard
may potentially not be included in the Climate Bonds
Initiative Green Bond Database are summarised in Annex 3of the Climate Bonds Standard version 3.0 (CBS v3.0).

However, non-debt instruments Certified under Climate
Bonds Standards are kept in a separate list since the
Climate Bonds Initiative Green Bond Database only
includes labelled debt instruments. In addition, confidential
Certified Climate Bonds are not available to the public ordata partners, as the Database requires public disclosure ofat least the label and basic information (e.g. amountissued, currency denomination and date issued).

Providing sufficient information on the greenness of assets,
projects and activities – e.g. the issuer’s green bondframework and assessment metrics – allows market
participants to assess for themselves if the deal merits
inclusion for their purposes. With a view to strengthening
Certification requirements and adhering to best practice,
Climate Bonds is now tracking how many issuers will opt
out of Certification if they were required to publicly
disclose minimum bond information (amount, issue date,maturity date), information on the eligible categories andselection process (e.g. green bond framework), and postissuance reporting.

Similarly, if issuers want to claim compliance with the GBP
or GLP and the proposed EU Green Bond Standard, theymust make at-issuance disclosure and post-issuancereporting publicly available. The proposed EU Green Bond
Standard envisages publicly available reporting on thebenchmark metrics set out in the EU Taxonomy. ICMA andthe Global Reporting Initiative have published guidance
and templates for impact reporting by sector.
Currently, Certified deals such as bilateral loans and private
placements can be handled confidentially. This is changing:
CBS v3.0 now requires public disclosure of the periodic
post-issuance compliance statement, which confirms that

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Disclosure requirement for inclusion in
the Climate Bonds Green Bond Database
Certain basic transparency requirements with respect tothe debt instruments must be disclosed, namely:
1. Disclosure of the amount issued, issue date andmaturity date of the instrument. Notably, no pricing,tranching, covenant or similarly sensitive informationneeds to be disclosed for private deals, but it isexpected that all material information is disclosed inbond documentation for publicly listed instruments.
2. Type of debt instrument, e.g. bond, medium-term note,
asset backed securities, etc.
Impact (e.g. GHG emissions metrics) is recommended but
voluntary for Certification. Assessment of the indicators
which determine compliance with Sector Criteria isrequired, but disclosure of these metrics is voluntary.
Under the GBP and GLP as well as this methodology,
impact reporting is also voluntary.
Eligible use of proceeds types
The Climate Bonds Initiative Green Bond Databasemethodology references eligible use of proceeds to the
Climate Bonds Standard. As described in the Introduction,
this pertains to the types of funding allowed. Historically,
the focus has been on direct financing of physical assets
and projects and indirect financing thereof (e.g. loans tosuitable assets / projects).
Annex D provides the eligibility list from the new Climate
Bonds Standard version 3.0 (CBS v.3.0). Compared to theeligibility criteria under CBS v.2.1, the new list further
specifies the meaning of “financing”, namely the itemised
inclusion of capex and asset acquisition costs, subsidies,loans, leases and other similar forms of asset/project
financing. It also adds certain related and supporting
expenditures, namely:•

relevant installation and routine maintenanceexpenditure and upgrades undertaken to maintain thevalue and/or extend the lifetime of the asset;•

relevant performance monitoring costs with respect totracking climate credentials (e.g. GHG emissions) andclimate information services (e.g. satellite monitoringand emissions testing);•

relevant research and development, training andprogramme implementation costs and expenditures,
where there is a definable future asset, product and/or
process that can be linked to climate benefits under
the relevant Sector Criteria.

These additions are in the spirit of the proposed EU Green
Bond Standard (available athttps://ec.europa.eu/info/publications/sustainablefinance-teg-green-bond-standard_en), but definitions aretighter. What is acceptable under CBS v.3 and for inclusionin the Climate Bonds Initiative Green Bond Databasemethodology has been limited to expenditures andupgrades that maintain the value and/or lifetime ofphysical assets, monitoring applications and expenditures
related to clearly defined assets, and products or processes
with defined climate benefits that would meet Sector
Criteria emissions limits or performance thresholds.
These changes acknowledge that the green bond market
has – so far – focused on climate change mitigation andprimarily invested in physical assets and projects. However,in some sectors mitigation can be achieved not so muchthrough the asset (e.g. land) as through improved methods(e.g. sustainable agriculture practices) and effective
monitoring. Also, adaptation and resilience measures do
not always attach to investment in physical assets /projects. Finally, there is the need to implement and adopt
technological innovation.
More information on how different types of allocations areassessed in the screening process is provided in thesubsection entitled “3. Evaluating the use of proceeds” ofthe next section. Broadly speaking, issuers will need toprovide sufficient detail for Climate Bonds to be able todetermine if any proposed expenditure financing under agreen bond is in line with the approach of CBS v.3.0,
although assessment for inclusion in the Climate Bonds
Initiative Green Bond Database will not necessarily seek toapply Sector Criteria.

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Climate Bonds Initiative Green Bond Database screening process in detail
1. Identification of green bonds
The issuer of a climate-themed bond must declare that thebond is intended to be environmentally beneficial throughlabelling the bond, ideally as “green”.
The most commonly used label is ‘green’, but other labels
are considered. Examples include, but are not limited to:
•
•
•
•
•
•
•
•
•
•
•

Climate-awarenessSolar, wind, renewable energy and similar
Energy efficiency, PACE and similar
GreenStar (BAM)
Environmental
Water bond and similar
Blue, marine conservation and similar
Energy transition / Sustainable transition
ESG, SDG, sustainability, social and similar
Climate action
Transition

and to post-issuance reporting under GBP / GLP is integral
to market credibility.
Our best-practice recommendations include:••

Impact reporting is required under the proposed EU
Green Bond Standard, increasingly demanded byinvestors and highly encouraged by Climate Bonds
Initiative. In the case of impact reporting, bestpractice includes:•••

Glossary of abbreviations:

PACE: Property assessed clean energy (US DOE scheme)
BAM: Build America Mutual
ESG: Environmental, Social and Governance

SDG: Sustainable Development Goals (UN scheme)•••press release,bond prospectus or other bond issuance document,
whereby the label needs to be clearly visible on thebond description to make identification possible andbe definitive that it is labelled,green/sustainability/SDG bond/sukuk framework,
external review of an issuer framework or other due
diligence to confirm the green credentials,
green bond assessment, green evaluation or other(e.g. green bond rating)

We will consider all debt instruments with a defined
amount. Short-dated instruments will be considered aslong as the use of proceeds meet the requirements.
Normally, they form a relatively small portion within aprogramme, such as, but not limited to, medium term
(MTN) programme or Programmatic Certification, where
the debt programme includes a variety of instruments andmaturities.
Unlabelled bonds will not be included in the Database,even if they finance assets which are aligned to the Climate
Bonds Taxonomy. In addition to asset alignment, we arelooking for transparency, and labelling is key to green bondvisibility. Furthermore, commitment to manage proceeds

defining relevant metrics and baselines, as well
as specifying which measures are actual andwhich are estimated / modelled;
identifying the scope of assessment: annual orover the lifetime of the asset/project; andsetting out the assessment framework andcalculation methodologies.

Such further information is used for ongoing
monitoring of bonds as follows:••

The label should appear in a public document such as:••external review at issuanceclearly set out commitment to post-issuancereporting on allocations and impacts.

•

Confirm basis for continued inclusion
Exclude if actual allocations are not to assets or
projects aligned with the Climate Bonds
Taxonomy
Consider inclusion for previously excluded bonds
if the assets/projects are aligned with the
Climate Bonds Taxonomy AND all net proceeds
are climate-related allocations

2. Screening sectors and green credentials
Each bond or other debt instrument is reviewed based on
the green credentials of the use of proceeds. This may beearmarked proceeds for asset-linked, senior unsecured or
secured bonds, projects funded by a project bond, or
assets backing an ABS or other secured debt. The key isthat the asset/project to be financed/refinanced is green.
At issuance, the issuer must declare the eligible asset andproject categories. Most issuers specifically link their deal
and framework to the GBP or GLP and obtain an external
review to confirm compliance. This is now the prevalent
practice, and is helping improve market integrity.
External reviews
We consider all types of external assessments (seesummary table below). An external review isrecommended but not required as long as equivalent

Climate Bonds Initiative Green Bond Database Methodology–September 2020

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information is clearly disclosed by the issuer in a bondframework, prospectus or other document. Equivalent
information covers the four principles of GBP/GLP, namely:
1.
2.
3.
4.

Pre-determined eligibility criteria
Information on the selection process
Management of proceeds to ensure allocation
Post-issuance reporting (at least on allocations)

The fact that an external review has been obtained does
not mean that the bond will be automatically included in
the Climate Bonds Initiative Green Bond Database, ascompliance with GBP/GLP does not mean that thecategories meet all the inclusion criteria. Rather, thereview as well as other information disclosed by the issuer
is independently assessed for alignment with the Climate
Bonds Taxonomy.
We will consider bonds for which there is no external
review, but adequate disclosure on the assets financed isprovided by the issuer. For instance, US Munis, Solar ABS,
PACE ABS and domestic market Chinese issuers typicallyprovide this information in the bond prospectus.

For post-issuance reporting, Climate Bonds Initiative relies
solely on publicly available information. Information madeavailable on the Climate Bonds website about Certified
instruments is considered publicly available even if theissuer has not made it publicly available on their website.
Assessment
As noted, the methodology for inclusion in the Climate
Bonds Initiative Green Bond Database is aligned to the
GBP/GLP, the Climate Bonds Taxonomy and the spirit of
the scientific Sector Criteria but with less stringency. (Seesummary in Annex B.)
For borderline or complicated cases, input from the
Climate Bonds Standards team, and on occasion external
technical experts, may be sought and the guidance
published in a briefing (e.g. NYK special briefing). This is
likely to be the case for new industries (e.g. cement) andproducts (e.g. bioplastics) and more comprehensive
approaches, particularly around circular economy claims.
A&R allocations are assessed on a case by case basis as
noted in the introduction.

Disclosure
The assessment is typically based on publicly-available
information. Occasionally, we may obtain private
information to determine alignment.
Overview of external review types and providers
Pre-issuance review

Scope

Providers (examples)

Assurance

Positive or negative assurance on compliance with the Green Bond
Principles (GBP) / Green Loan Principles (GLP)

EY, Deloitte, KPMG

Second Party Opinion (SPO)

Confirm compliance with GBP / GLP. Provide assessment of issuer’s
green bond framework. Some analyse the “greenness” of eligible
assets.

CICERO, DNV-GL,
Sustainalytics, Vigeo Eiris, ISSOekom

Green bond rating

Assess the bond’s alignment with GBP and integrity of its green
credentials. (NB: Credit ratings, increasingly incorporating ESG
factors, are assessed separately.)

Moody’s and S&P
RAM (Malaysia)
R&I and JCRA (Japan)

Pre-issuance verification of
the Climate Bonds
Certification

Third party verification confirms that the use of proceeds adhere to
the Climate Bonds Standard and sector specific criteria as requiredfor bond / programmatic Certification.

Approved Verifiers under the
Climate Bonds Standard

Post-issuance review

Scope

Providers

Assurance, audit or postissuance SPO

Assurance of actual allocation of proceeds to eligible green
projects.

Audit firms, ESG service
providers

Impact report

Reporting that seeks to quantify the climate or environmental
impact of a project/asset numerically.

As above

Post-issuance verification of
the Climate Bonds
Certification

Third party verification confirms the allocation of proceeds is toeligible green projects and the types of green projects conforms torequirements of the Climate Bonds Standard.

Approved Verifiers under the
Climate Bonds Standard

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 9•

3. Evaluating the use of proceeds
Climate Bonds Initiative’s focus is on climate-change
mitigation, adaptation and resilience. Only bonds which are
expected to allocate all net proceeds to aligned green
assets, projects and activities are included in the Climate
Bonds Initiative Green Bond Database.
Exclusions
The bond will not be eligible for inclusion if proceeds are(expected to be) used for social projects, general corporate
purposes, working capital/ operating and training expenses
that are not part of an acceptable programme/projectdelivery, early-stage R&D when the outcome and/or
climate benefit are not yet defined and/or cannot yet bequantified, and other expenses or assets that are notaligned.
The most significant exclusions are fossil fuel power andany process, product, asset or improvement, which locks in
the use or extends the life of fossil fuels.
As new low-carbon technologies make “alternatives”
mainstream (e.g. zero- and low-emission vehicles versus
ICE vehicles), the list of assets that are not supportive of
rapid decarbonisation will likely grow.
We also exclude assets / projects that do not meet thethresholds set out in Annex B, e.g. building upgrades that
achieve some but not sufficient improvements in energy
performance, or hybrid vehicles that are more efficientthan ICE but not efficient enough to meet emissions limits.
Notably, broad categories – such as energy efficiency
without reference to a specific sector / asset / project –may lead to exclusion if the detail is insufficient todetermine alignment under this methodology, even if it canbe broadly determined that the investment may have apositive climate impact.
Importantly, lack of sufficient information on a bond’s
green credentials to determine this also results in
exclusion. Sufficient information covers:• specificity of category definitions, e.g. energy efficiency
financing should be linked to a sector such as buildings,
transport, grids, etc.
• clarification if social programmes also have specificgreen objectives or benefits, e.g. energy efficiency
upgrades to social housing, and• confirmation that no financing is allocated to improving
fossil fuel power generation or related technologies.
The bond is added to the excluded bonds list if:•

proceeds are used or expected to be used for social
projects, assets or working capital that do not align to
the Climate Bonds Taxonomy;

there is insufficient information to determinealignment or lack thereof.

Excluded bonds are announced in the regular market
updates, together with the reason for exclusion.
Post-issuance reporting on the actual allocation ofproceeds can also lead to exclusion from the database if
the funding proves to be allocated to assets that are notaligned. Climate Bonds has undertaken two studies into
post-issuance reporting (in 2017 and 2018) and continues
to monitor the market, with a further study to come later
this year.
Notably, excluded sustainability, SDG, ESG and similarbonds may, nonetheless, be funding primarily green assets
and projects. Consequently, these may well be aligned toinvestment policies and thresholds for some investors,
indices and investment products. Bonds with other labelsthat do not meet the Climate Bonds Green Bond Databaseinclusion criteria are recorded in a separate database.
Tracking the wider labelled market: social v green
An asset or project can have both social and green
credentials. For example, TLFF I (Indonesia) issued asustainability bond to fund a sustainable rubber plantationand smallholder plots on degraded land. Employment, foodsecurity and equality are social goals, but the rehabilitationof degraded land to productive, sustainable use is in linewith the Climate Bonds Taxonomy, so the bond is includedin the Climate Bonds Initiative Green Bond Database.
Issuers are advised to state if their projects meet bothsocial and green criteria. An issuer financing social housing
may also require that properties are energy efficient to a
specific (ideally high) standard. However, without thegreen clarification, the bond will not be included in the
Climate Bonds Initiative Green Bond Database.
As noted above, Climate Bonds Initiative maintains not justthe Climate Bonds Initiative Green Bond Database, but alsosustainability and social bond lists, as well as a list of
repacks. Deals that do not qualify as green bonds under
this methodology may be included in one of those lists.
Financing capital assets versus eligible expenses
The transition to a low-carbon economy needs to be swift
to keep global warming under 2oC. Consequently, the focusof Climate Bonds Initiative’s advocacy is on mobilising bondmarkets at scale to fund sustainable and climate-resilient
infrastructure, low-carbon buildings, sustainable use ofnatural resources and improving industrial processes toreduce emissions. Scale is achieved with thefinancing/refinancing of capital assets that can generate
immediate or near-term impact and would continue
generating a positive climate benefit over the medium- tolong-term.
In this context, capital expenditure to improve assets andmake them more energy efficient and/or more climate

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 10

resilient is an acceptable use of proceeds. In fact, it forms
the basis of the Buildings (Upgrade) Sector Criteria used for
Certification. As with any allocation, though, the level ofambition needs to be sufficient, which translates tomeeting benchmark metrics where these are specified. For
property CapEx, for example, the threshold is 25%
improvement in energy efficiency. On a case-by-case basis,the threshold may be re-assessed – e.g. if the work is being
done on new and refurbished buildings that are alreadyenergy efficient and/or there is a combination of targets
such as improving energy efficiency and reducing water
consumption (as is the case with, say, Fannie Mae’s Green
Rewards programme).
Funding general operating expenses generally covers animmediate cost that is not necessarily linked to green
assets, projects or activities. However, the funding of
enabling expenses to deploy climate-friendly assets or
projects will be considered as eligible. For instance, training
farmers on sustainable agriculture practices is crucial toachieving a long-term benefit from investment in
adaptation and resilience projects, assets and equipment.

scenarios for the project(s), no specific product / asset /process (just an aim to find an improvement), and climate
benefits are as yet undefined or cannot be measured.
By contrast, late stage R&D is better defined. The existenceof specific (existing or prototype) products, assets orprocesses for which there is a defined approach for
improvement allows the quantification of climate benefit
and attainment of sector-relevant thresholds in the near to
medium future.
Capitalisation of R&D is also acceptable insofar as it
converts expenditure into an asset. For existing
assets/products/processes this approach is similar tocapital expenditures. For new assets/products/processes
this approach is similar to acquisition/development costs.
If the type of R&D is not specified, Climate Bonds Initiative
will tend to err on the side of caution. This may result in
exclusion if the poorly specified R&D (e.g. not sufficient
information on what R&D relates to, stage of R&D project,etc) represents. Notably, acceptable R&D counts towards
eligible use of proceeds.

Another example is financing the measurement andtracking of climate impacts, pollution control, natural
resource conservation measures, and the effect ofadaptation and resilience measures in the context of
ensuring long-lasting climate benefits. We categorise suchfunding as adaptation and expect to see such allocations in
the context of wider investment programmes. For instance,
the Seychelles blue bond funds sustainable fisheries andmarine reserve conservation as well as enabling measures
such as scientific monitoring. The French government isusing part of the proceeds of its green sovereign bond forsatellite observation of weather patterns and climatechange, and partly to maintain wetlands and natural green
spaces under biodiversity conservation programmes.

At the sovereign level, it is acknowledged that national
governments provide enabling funding for various research
programmes, some to explore areas of interest (e.g. earlystage research, research that may not have an identified
practical application as yet or is expected to be beneficial)
but with practical application – and hence climate benefits– only in the medium- to long-term future. To
accommodate the role of government support fortechnological and scientific innovation, the limit forunspecified expenditure by sovereigns can be raised up to
10% of allocations. Note that acceptable R&D – such as
France’s satellite climate monitoring satellite programme –would be included as eligible, so the 10% limit does not
apply to this.

This approach acknowledges that developing effective
measures and monitoring of implementation is vital toachieving the overall goal of limiting global warming anddecarbonising the economy, including the preservation andgrowth of carbon sinks (e.g. forests).

Adaptation and resilience measures
Climate Bonds Initiative set up an Adaptation & Resilience
Expert Group to develop high-level guidance fordetermining when projects and assets are compatible witha climate-resilient economy. Climate resilience covers
assessment of risks, which tend to be idiosyncratic
depending on geographic location and local climate, as well
as developing measures to address and adapt to acute
events (e.g. storms) and long-term changes (e.g.
temperature and sea level rises).

Eligible R&D expenses
Climate Bonds Initiative is supportive of scientific study to
improve mankind’s ability to address climate change. We
look for R&D spend that is likely to provide an immediate
to near-term investment in capital assets that can deliver
positive climate benefits. An example would be pilot
projects for new technology or climate-resilience projects /products that – if successful – can continue to deliver
benefits long-term. Spatial observation to identify, verify
and/or implement mitigation and adaptation measures
could also qualify.
The rule of thumb for corporate R&D expense eligibility isthat early stage R&D is not eligible as there are multiple

As a first step, Climate Bonds Initiative has published the
Climate Resilience Principles (seehttps://www.climatebonds.net/climateresilience-principles). They provide a framework for
issuers to demonstrate that for the assets and activities(re)financed via the bond they:• Understand the climate risks faced by the asset, activity
or system in question;

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 11• Have addressed those risks by undertaking riskreduction measures and adopting flexible management
plans that take account of inherent uncertainties
around climate change, and ensuring that the asset,
activity or system is robust, flexible and fit-for-purposein the face of that uncertainty;• Can deliver resilience benefits over and above
addressing identified risks (for system-focusedinvestments); andRe-classification of a bondIf a green bond is included but the issuer cannot fulfil thecriteria at a later date or the proceeds are eventuallyapplied to “non-green” assets, it may be removed from the
Climate Bonds Initiative Green Bond Database. Conversely,
excluded bonds may be re-classified if satisfactory
information is provided or obtained at a later date which
confirms sector alignment.

• Are undertaking regular (re)evaluation of the asset
and/or system’s climate resilience performance,adjusting to risk reduction measures over time asneeded.

Re-classifications are announced in Climate Bonds’ Market
Blog, noting the reason for the change of status of thebond. Classification changes are pre-announced to Data
Partners, such as index providers.

These types of measures and programmes could involve
both physical assets (e.g. coastal flood defences such asbollards (Louisiana) or dykes (Netherlands)), nature
conservancy (e.g. land banks) and reforestation (e.g.
Indonesia’s TLFF I), as well as asset / project managementthat improves resilience and ongoing assessment of
impact. So far, investments have been primarily in physicalassets and projects, often in combination with mitigation
measures in water management and sustainable land use.

Change in screening methodology

Financing of A&R will be included in the Climate Bonds
Initiative Green Bond Database if the issuer candemonstrate that the A&R use of proceeds does notfinance assets or activities that undermine emissions
reductions goals. For example, adaptation and resilience
projects that lock in fossil fuel technology will not be
eligible, and may lead to the bond not being included.

Pending deals and resolution process
In some cases, the information available on the deal’s useof proceeds is insufficient for an immediate decision as towhether the bond should be included or excluded. This isoften the case for private deals, but may also occur if, say,documentation is not available in English or is only madeavailable to bondholders or lenders.
Such bonds are marked as “Pending” and further work isundertaken to obtain or clarify information. This
investigation process is carried out by contacting theissuer, underwriter, rating agency or the green bondexternal review provider (if applicable) within 30 days after
the bond is identified. Also, Climate Bonds Initiative keeps
monitoring further information disclosed to the market. If
no further information is made available or the obtained
information does not confirm sector alignment in 90 days
after the bond is identified, and/or other databaserequirements are still not met, the bond is added to thesustainability, social or excluded list, as appropriate.

A change from ‘excluded’ to ‘included’ may also occur if wechange the methodology to expand the list of acceptableapproaches to labelling. For instance, in 2018 we started
treating green bond ratings as equivalent to labelling andretroactively included bonds that had been excluded forlack of labelling. Likewise, in 2018 we formally started
accepting ABS deals identified as solar, PACE or similar as
acceptably labelled.
Updates of this nature are most likely to occur inconnection with our annual and semi-annual Green Bond
Market Highlights report.

Change in the definition of alignment
Excluded deals may also be included retroactively to reflect
the evolution of scientific thinking and internal guidance on
asset categories. For instance, historical guidance was to
exclude large-scale hydro. However, the new Taxonomy
focuses on the power density and GHG footprint ofreservoirs. Consequently, some previously excluded deals
may be included.
Changes of this type are likely to occur after an update to
the Taxonomy and/or the publication of new sectorspecific Certification Criteria.
On the other hand, deals will not be retrospectively
excluded as Climate Bonds tightens the screening criteria
levels used in this methodology.
Changes to the screening criteria will be pre-announced in
the Climate Bonds Market Blog.

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 12Annex A: The Climate Bonds Taxonomy
The Climate Bonds Taxonomy provides guidance forprospective green bond and climate bond issuers andinvestors. The current diagram summarising eligible
sectors in the Taxonomy is reproduced below. The
underlying Taxonomy document provides two levels of
information:
1. broad guidance on eligible sectors and subsectors, and
2. metrics and other indicators designed to help identify
assets and projects which are on a trajectory to zerocarbon by 2050, i.e. aligned to the Paris Agreementtarget of limiting global warming to 2oC.
Guided by the Climate Science Advisory Panel, the aim of
the Taxonomy is to encourage common definitions acrossglobal markets, in a way that supports the growth of acohesive green bond market.

The chart below summarises the sectors and subsector
Climate Bonds Initiative considers ‘green’. Notably, what isrecognised as eligible under each sector and sub-sector
evolves over time as science, technologies and theeconomics of implementation progress. For the most up-to
date version, please check the Climate Bonds website:
https://www.climatebonds.net/standard/taxonomy.
The diagram also shows for which sectors there are SectorSpecific Certification Criteria, and which are underdevelopment. Sector Criteria are developed together with
scientific and other technical and industry experts for the
purpose of Certification under the Climate Bonds Standard,a labelling scheme for instruments that are 2oC-compliant.

For criteria under development see https://www.climatebonds.net/standard/available-soon
For criteria in public consultation see https://www.climatebonds.net/standard/public-consultation/new

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 13Annex B: Green definitions for the Climate Bonds Initiative Green Bond Database
SECTOR: ENERGY
Solar and Wind

• Offshore solar and wind power generation• Onshore photovoltaic and concentrated solar heat & power generation, provided there isnot substantial backup generation from fossil fuel sources• Onshore wind power generation, provided there is not substantial backup generationfrom fossil fuel sources• Dedicated infrastructure, manufacturing (supply chain), storage and transmission

Geothermal• Geothermal electricity (further considerations apply for some countries – see yellow)• Dedicated infrastructure, manufacturing (supply chain), storage and transmission

Bioenergy• Facilities producing biofuel, biomass, biogas from wood industry by-products, waste orsustainable feed stocks (preferably certified under schemes such as RSB, RTRS, FSC and
ISCC Plus or national schemes such as EU RED, UK Renewable Obligation)• Power generation facilities, provided biofuel is sourced from sustainable feedstock(excluding timber), for example, biomass power station, heating/cooling facilities,
combined heat and power (CHP) and electricity generation facilities (including those withCCS)
• Dedicated infrastructure, manufacturing (supply chain), storage and transmission

Hydro• Power generation facilities without a reservoir (e.g. run-of-river) or built without adding
reservoirs, impoundment and pumped-storage facilities• Power generation facilities with new reservoirs which have a high power density(preferably >5W/sqm or higher) or low emissions of electricity generated (preferably up to
100gCO2e/kWh), unless controversial due to loss of habitat/biodiversity and/or
displacement of people or with weak social / environmental impact assessment (if publicly
available).
• Dedicated infrastructure, manufacturing (supply chain), storage and transmission

Marine renewables• Tidal, wave and other energy generation using ocean thermals, salinity, gradients, etc.
• Dedicated infrastructure, manufacturing (supply chain), storage and transmission• Marine heating and cooling facilities using ocean thermals (assumed to provide reduction
in gCO2e/kWh compared to fossil fuel alternatives)

Transmission,
distribution and storage• Transmission infrastructure needed to integrate renewable energy or energy efficiency
systems and their load-balancing (e.g. overhead transmission lines, conductors, insulators,
towers) and infrastructure (e.g. buildings, fences, earth mats, busbars)• District heating network fed primarily by renewable energy• Products such as smart systems/meters, smart grid, off-grid power units, home storage
batteries, supercapacitors, hydro and thermal heat storage, voltage regulation equipment,
transformers and switchgear• Large scale energy storage facilities, batteries, Capacitors, compressed air and flywheel
plants, supercapacitors and related manufacturing
Assets need further review

Geothermal• Geothermal electricity in Turkey, New Zealand, US and Canada, where gas emission levels
from extraction typically require further assessment• Geothermal heat pump (GHP) technology

Bioenergy• Biofuel blending facilities• Biomass power stations if GHG emissions are more than 100gCO2e/kWh• Supply chain facilities related to blending facilities

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 14

Nuclear• Power plants and dedicated supporting infrastructure (excluding uranium mining) but
safety and social aspects need to be considered• Uranium mining and supporting infrastructure.
Ineligible assets

Fossil fuels• Coal/oil/gas with or without carbon capture and storage (CCS)• Coal/oil/gas powered combined heat and power (CHP)• Coal/oil/gas mining/extraction, refining, processing and associated supply chain
infrastructure

Energy efficiency• Efficiency upgrades to GHG-intensive power sources, e.g. so-called “clean coal”• Energy savings in fossil fuel extraction activities and anything that helps to extend the lifeof fossil fuel usage

Transmission• District heating fed primarily by non-renewable energy sources

Bioenergy• Power generation facilities using timber (except for waste wood)• Traditional biomass use, such as a three-stone fire for heating and cooking in theresidential sector

Onshore solar & wind

• Onshore solar generation facilities if more than 15% of the power generation is backed up
by fossil fuel sources

SECTOR: BUILDINGS
Buildings and built
environment• Buildings which are EDGE certified, net zero energy, Passivhaus or Living Building
Challenge Certified• Commercial, residential and special-purpose public properties (e.g. hospitals, schools)
upgrades/retrofits aiming for a minimum of 25% energy performance improvements
and/or improving emissions performance• Buildings meeting well-established, widely-used building industry certification schemes
such as LEED, Miljöbyggnad, BREEAM, DGNB, China Green Building Label, CASBEE,NABERS), with the lowest level excluded for those that have levels.
• Properties achieving a minimum of 25% further reduction in energy use compared to thebaseline requirements under the domestic building regulations/code• Properties with EPC ratings of D and above in the EU (where A is the highest and G thelowest rating) and an equivalent level in other locations• Assets and urban policies/regulations directed at climate change mitigation such as
streetlighting upgrades, passive heating/cooling, car-free areas

Technology, products,
systems andmanufacturing forbuilding efficiency• Products meeting industry certification schemes such as ENERGY STAR
• Manufacture of energy efficient components (e.g. LED lighting)• Systems which increase overall energy efficiency (e.g. district heating)• Low-carbon and alternative building materials (e.g. alternatives to cement or concrete)• Building, maintaining or upgrading utility tunnels for cables and pipes which improve
resource and energy efficiency
Assets need further review

Buildings and built
environment• Commercial, residential and special-purpose public properties (e.g. hospitals, schools)
upgrades/retrofits aiming for less than 25% energy performance improvements, provided
there are other targets (e.g. water consumption reduction) and/or properties, previously
subject to significant energy and water performance improvements• Buildings meeting less well-known or local/regional certification schemes
Ineligible assets

Buildings and built
environment• Buildings meeting only the lowest level of well-established, widely-used industry
certification schemes with levels (e.g. LEED Certified)

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 15• Properties with EPC ratings of E and below in the EU (where A is the highest and G thelowest) and an equivalent level in other locations
SECTOR: TRANSPORT
Private, public andfreight land transport• Electric vehicles (EVs), hybrids and hydrogen fuel cell vehicles• Bicycle and public walking infrastructure and schemes• Passenger trains; urban rail systems such as metro, light rail, cable cars, trams• Freight railways and rolling stock, provided <50% fossil fuel transport• Public transport buses and coaches, bus rapid transit (BRT)• Dedicated infrastructure, energy efficient products (e.g. batteries, charging stations)

Passenger and cargowater transport• Electric powered or otherwise low-carbon (sustainable biofuel, ammonia, hydrogen)

Passenger and cargo
aircraft and aviation• Electric powered or otherwise low-carbon (sustainable biofuel, hydrogen, solar, etc)

• Supporting infrastructure• Supporting infrastructure
Assets need further review

Passenger and cargowater transport• LNG and biofuel vessels factoring in design and operational energy efficiency
improvements, level of GHG and total emission reductions, etc.

Transport logistics• Sorting centres, smart freight logistics, intermodal freight facilities, ports and associatedfacilities such as power from shore, multi-modal logistics hubs.
Ineligible assets

Private, public andfreight land transport• ICE and CNG passenger vehicles and supply chain (components)• Rail lines/operators when fossil fuels account for more than 50% of freight• New roads, bridges and upgrades, parking facilities, fossil fuel filling stations and otherassets which prolong the life and/or increase the ease-of-use of ICE transport

Passenger and cargowater transport• Oil tankers, LNG carriers and other vessels transporting solely fossil fuels• Heavy fuel vessels• Support vessels such as jack up rigs, and supply vessels dedicated to the oil and gas
industry

Passenger and cargo
aircraft and aviation• Aircraft using fossil fuel

SECTOR: WATER
Water storage andmanagement• Rainwater harvesting systems, aquatic ecosystems (lakes, wetlands), aquifer storage,
groundwater recharge systems, water distribution systems, infiltration ponds• Gravity-fed canal systems, hydrological restoration• Water-efficient agricultural irrigation systems and water saving technology

Defences and storm
water management• Flood, sea and drought defences including pumping stations, levees, gates, ecologicalretention systems, snowpack management, wetland storage• Rainwater harvesting, constructed ecological retention ponds, erosion control systems,
groundwater recharge, erosion control systems

Water treatment• Water treatment including desalination plants using renewable energy• Water recycling, wastewater treatment, sewage, manure and slurry treatment• Natural filtration systems such as wetlands, watersheds, forests and settling systems

Ecological restoration• Erosion control, hydrological restoration

SECTOR: WASTE
Circular economy
activities• Recycling of metals, plastics, glass, paper. Facilities for sorting and recovering materials.
• Facilities for the re-use of materials (recycled products, refurbishing, repairing, etc)
• Anaerobic digestion facilities to produce biogas from green waste. Composting facilities

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 16• Waste-to-energy plants for solid waste incineration with energy capture, pyrolysis /gasification, plasma converter, anaerobic digestion outside the EU• Collection of waste where it is specified that the waste is to be recycled
Waste disposal• Adding gas capture to existing, closed landfill facilities

Pollution control• Carbon capture and storage (excluded for fossil fuel energy)
Assets need further review

Bioplastics and similar• Bioplastics and similar products that use biomaterials as a substitute for fossil fuels, unlessthese are derived from other waste products (e.g. sawdust, corn husks etc). This includes
related production facilities as the concern is that bioplastics divert arable land away fromfood.
• Bioplastic assets /supply chain are only included where these are single polymer (e.g. PET)
products that can be easily reused, or are home-compostable, or municipality
compostable only where such facilities exist.

Nuclear waste• Radioactive waste disposal and nuclear power plant decommissioning
Ineligible assets

Waste management• Collection of waste that is going to landfill and where it is not specified if the waste is tobe recycled or sent to landfill• Landfill without gas capture or if gas capture is used to extend landfill’s life
• Waste-to-energy plants for solid waste incineration with energy capture, pyrolysis /gasification, plasma converter, anaerobic digestion in the EU• Waste incineration without energy capture

SECTOR: LAND USE & MARINE RESOURCES
Agriculture• Sustainable agriculture within the categories of growing non-perennial and perennial
crops, animal production, mixed farming, and controlled environment agriculture, that
reduces carbon and GHG emissions, increases soil-based carbon sequestration andimproves climate resilience• Reduced water and energy use, verifiable reduced fertilizer use• Supply systems for seed production, distribution and access• Storage for agricultural produce• Equipment, intelligent management systems and technology to manage sustainableagriculture

Commercial forestry• Natural forests and forest plantations certified under internationally acceptedsustainability standards such as FSC or PEFC for large-scale forestry and otherwise
sustainably managed forests for small-scale forestry• Production facilities using energy- and water-efficient pulping processes, biorefineries, useof recyclates• Storage for sustainable forestry produce• Primary processing for FSC, PEFC and other certified forestry produce• Equipment, intelligent management systems and technology to manage sustainable
forestry

Natural ecosystems• Natural ecosystem land (managed and unmanaged)• Land remediation, afforestation, re-vegetation that creates habitat appropriate for thelocation• Reduced emissions from deforestation and degradation (REDD)• Wild fisheries and sustainable fish farms, machinery and equipment to sustainably harvest
fisheries as well as related primary processing and storage facilities• Marine reserves and marine conservation• Equipment, intelligent management systems and technology to manage ecosystems

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 17

Resilience infrastructure• Dedicated infrastructure for climate resilience including coastal infrastructure
Assets need further review

Green spaces• Landscaping of recreational parks/gardens, golf courses and similar green spaces areunlikely to be included unless carbon sequestration impact is significant and/or theirpreservation/creation protects biodiversity• Sustainable drainage systems should be evaluatedAgriculture & forestry• Primary processing for agricultural produce• Primary processing for sustainable forestry produce
Ineligible assets

Agriculture & forestry• All agricultural production and commercial forestry on peatland• Timber harvesting except for certified and otherwise sustainably managed forests

SECTOR: INDUSTRY
Energy-efficient products
and processes• Facilities and equipment dedicated to manufacturing energy-efficient components, suchas motors and automation systems• Facilities and equipment dedicated to manufacturing energy-efficient products, such as
household appliances and equipment (particularly white goods)• Eco-efficiency improvements/cleaner production, e.g. related to cement (e.g. reduced
clinker content), iron, steel, chemicals and glass production• Related supply chain manufacturing facilities

Non-energy GHG
reductions• Carbon scrubbers• Carbon capture and storage products (except for fossil fuel power generation)
Assets need further review

Heavy industry• Manufacture of steel, aluminium, cement, chemicals, etc

Non-heavy industry• Manufacturing and processing of other commodities and goods
Ineligible assets

Energy-efficient products
and processes• Facilities and equipment dedicated to manufacturing polystyrene and other nonrecyclable plastics

SECTOR: INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT)Broadband networks, IT
solutions• Teleconferencing, telecommuting software and services• Fibre optic and cable networks and exchanges• Renewable energy-powered data centres or with low to zero energy usage for coolingPower management• Dedicated infrastructure, software and hardware for remote and in situ power
management, such as load balancing, energy monitoring and automatic switching off
power systems
Assets need further review

Broadband networks, IT
solutions• Data centres not powered by renewable energy or not cooled naturally and related
hardware and supply chain manufacturing facilities
Ineligible assets

ODS refrigerant based
cooling systems• ICT facilities that use ODS (Ozone depleting chemicals)

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 18

Annex C: The Climate Bonds Standard and Certification Scheme
The Climate Bonds Standard and Certification Scheme is alabelling scheme. The scheme is used globally by bondissuers, governments, investors and the financial markets
to prioritise investments which genuinely contribute toaddressing climate change.
Rigorous scientific criteria ensure that it is consistent withthe 2oC warming limit set in the Paris Agreement. Sector
Criteria are developed by dedicated working groups oftechnical and industry experts, coordinated by the Climate
Bonds Standards team. The certification scheme andcriteria development is overseen by a Climate Bonds
Standard Board representing institutional investors andenvironmental NGOs. The Standard Board reports to theGovernors of the Climate Bonds Initiative.

Up-to-date information on the criteria available for
Certification and in development is provided at:https://www.climatebonds.net/standard/sector-criteria
Certification requires that issuers identify eligible assets
and projects, collate relevant metrics to determine thatthese are on a trajectory to decarbonisation by 2050, andobtain a verification by a third party to this effect. On anannual basis, they are required to reconfirm compliancethrough post-issuance verification.
The infographic below summarises the Certification
process and disclosure requirements.

Climate Bonds Initiative Green Bond Database Methodology–September 2020

PAGE 19

Annex D: Eligible projects and assets under the Climate Bonds Standard

Eligible assets and projects under Climate Bonds Standard version 3.0 (NEW, BEING PHASED IN)
ELIGIBLE PROJECTS & ASSETS: Parts or collections of thefollowing (given alignment with definitions above):1) Physical assets or projects owned by the Issuer,
and/or2) Debt or other financing arrangements provided by
the Issuer to finance projects or physical assets,
and/or3) Related and supporting expenditures for projects orphysical assets, where the projects or physical assets
meet the relevant Sector Eligibility Criteria provided
in the Climate Bonds Standard.

Physical assets or projects include:• Physical assets: existing and operational equipment,machinery, infrastructure, buildings or land
• Projects: equipment, machinery, infrastructure and/or
buildings in construction, redevelopment, (upgrades,
expansion) and similar asset value creation orenhancement activities.

Debt or other financing arrangements provided to financeprojects or physical assets, including:• Capital expenditure undertaken to increase the value
and/or lifetime of the physical assets or projects• Acquisition costs/purchase price for an entity(company, division or similar) which holds physicalassets or projects or share thereof whichapproximately corresponds to the Market Value of thephysical asset or projects holdings• Leasing structures resulting in Right of Use assets andliabilities and long leaseholds on land, buildings andinfrastructure• Loans and mortgages• Subsidies, tax and other incentives, credit schemes
and grants, and other similar arrangements provided
by public entities or agencies, including local andnational governments.

Related and supporting expenditures include:• Relevant installation and routine maintenanceexpenditure and upgrades undertaken to maintain thevalue and/or lifetime of the asset• Relevant performance monitoring costs with respect
to tracking climate credentials (e.g. GHG emissions)and climate information services (e.g. satellite
monitoring and emissions testing)• Relevant research and development. training andprogramme implementation costs and expenditures,
where there is a definable future asset, productand/or process that can be linked to climate benefits
under the relevant Sector Criteria.

Nominated Projects & Assets: Eligible Projects & Assetsthat are associated with the bond, loan or other debt
instrument. These projects or physical assets may be
existing, under construction, or yet to be deployed.

Eligible Projects & Assets as defined in the Climate Bonds Standard version 2.1 (BEING PHASED OUT)
Projects, physical assets, or indebtedness incurred to finance physical assets that conform to the eligibility criteria
provided in Part B of the Climate Bonds Standard. Part B sets out a two-step process to determine the eligibility of
specific projects and physical assets that will be regarded as contributing to the delivery of a low carbon and climateresilient economy. The Climate Bonds Taxonomy serves as an initial screen for clear inclusions and exclusions for all
sectors based on the latest climate science and 2oC scenarios. Each project or asset included in the Taxonomy is thensubject to further eligibility criteria as set out in Sector-specific Technical Criteria. At the time of publication of
Version 2.1 of the Climate Bonds Standard, six sector-specific criteria were available (wind energy, solar energy,
geothermal energy, low carbon buildings, low carbon transport, and water infrastructure).

Climate Bonds Initiative Green Bond Database Methodology–September 2020

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