Climate Bonds
Guide to Certification
SUSTAINABILITY-LINKED DEBT INSTRUMENTS

SHOW YOURCREDIBILITY WITH
CLIMATE BONDSCERTIFICATIONThe Climate Bonds Standard and Certification Scheme is avoluntary labelling scheme for investments that address thechallenge of climate change, and are consistent with the goal oflimiting global temperature rise to 1.5°C above pre-industriallevels.
Launched in 2012, the Standard was initially designed as a mechanism to supportconfidence in the climate change action credentials of green bonds and other debt
instruments and to provide a tool to allow quick investment decision making. Climate
Bonds have Certified over USD270bn of Use of Proceeds Green Bonds since the launch ofthe Certification Scheme.
The latest Standard expands Certification coverage to general purpose instruments,
such as Sustainability-linked debt instruments, Assets and Entities. Certification under
this Standard confirms that debt instruments, assets, or entities meet Criteria publishedunder the Climate Bonds Standard. Transparently developed scientific criteria underpin
the Scheme and independent assessment is provided by a network of Climate Bonds
Approved Verifiers.
An international independent Climate Bonds Standard Board, comprised of institutional
investor representatives and reporting to the Trustees of the Climate Bonds Initiative,
provides oversight and a strong governance framework for the Scheme.

Climate Bonds Standard and Certification Scheme | Page 1

The Certification label is anendorsement of the green credentialsof the Sustainability-linked debt
instruments and the ambition andcredibility of corporate transition plans.
The scienced-based eligibility criteria
are developed through a rigorous
process, demonstrating credibility androbustness.

Benefits ofCertification

Certification increases visibilityto investors.
A globally recognised symbol of bestpractice in green finance.

Clearly demonstrates to the market
that the certified instruments meet thehighest standards for climate integrity.

Enhanced reputation benefits for Issuers,
Companies or Asset owners.

Climate Bonds Standard and Certification Scheme | Page 2

SUSTAINABILITY-LINKED
DEBT INSTRUMENT
CERTIFICATION
These general-purpose debt instruments have coupons
linked to forward-looking commitments made by the Entity
to future delivery of sustainability outcomes, often in theform of company-level Key Performance Indicators (KPIs).
The Standard provides transparent science-based climate mitigation Criteria for
credible Sustainability-linked debt. The Certification rules for Sustainability-linked
debt aim to address concerns of issuers and investors on the burden of information
and reporting requirements, while maintaining robustness and credibility.
The framework adopted by Climate Bonds emphasizes the key governance elementsthat are important indicators of a company’s willingness and ability to deliver on its
decarbonisation targets, and adds the granularity needed to ensure that those targets
are ambitious and in line with the agreed climate goals.

Climate Bonds Standard and Certification Scheme | Page 3

A quick guide to Eligibility
1

The requirements for Sustainability-linked debt instrument
Certification relies on Performance Targets and supporting
Transition Plans and Governance structures to enable thedelivery of those targets.

2

Sustainability-linked debt Certification is only available to debt
instruments issued by legal Entities.

3

Certified Sustainability-linked debt may be linked to activities
that either have emissions already at or near zero (Level 1:Aligned label), or significantly above net-zero but with targets
and plans aligned with 1.5 degree pathways (Level 2: Transitionlabel).

4Certification is limited to Sustainability-linked debt linked toactivities for which the Climate Bonds Initiative has ClimateBonds Standard Sector Criteria.

5The Sustainability-linked debt Checklist describes more
precisely what is required in order qualify for Sustainabilitylinked debt Certification.

Climate Bonds Standard and Certification Scheme | Page 4

OUR LABELSThe Climate Bonds expanded Standard and Certification Scheme
offers two levels of Certification for Sustainability-linked Debt:

LEVEL 1The Sustainability-linked debt issuers are already aligned with 1.5 degree pathways. This
category includes both those already near net-zero and those above net-zero but within
sectoral 1.5 degree pathways and transition plans that predict alignment with the sector
specific pathways going forward.

LEVEL 2The Sustainability-linked debt issuer has transition plans that predict that they will bealigned with 1.5 degree pathways by 2030.

Company ZTransition

Greenhouse Gas Emissions

Company YCompany X

1.5˚C pathway for sector

AlignedTime2030

Climate Bonds Standard and Certification Scheme | Page 5Certification is available for Single Sustainability-linked debt instruments,
as well as for a Series of issuances (Programmatic):

Programmatic
Sustainability-linked
debt instruments (SLDs).

Sustainability-linked
debt instrument (SLD).

Single SLD.

A series
issuedEach
SLDofinregulara series SLD
of regular
SLD
under a undersingleaCertification
issuance
single Certification
Agreement.
Agreement.

Suitability

Corporate Issuers of SLDs (as for
Entity Certification) the proceeds ofwhich are used for general
operatingexpenses.
expenses.
corporate

Corporate Issuers of SLDs (as for
Corporate issuers of SLDs (as forEntity Certification) the proceeds ofEntity Certification)
proceeds ofwhich
are used for thegeneralwhich
areusedforgeneral
corporate
operating expenses.
expenses.

Eligibility rules

Proceeds can finance general
corporate expenses. The issuing
company must meet therequirements for Entitycertification.

Proceeds can finance general
corporate expenses. The issuing
company must meet therequirements for Entitycertification.

Validity of certification

Term of bond.
debt instrument.

Term of each SLD
instrumentin theissued.
Program of UoP
debt instrument
program.
issued.

Types of instrumentsthat can be certified

Sustainability- linked bonds andloans, irrespective of tenor.

Sustainability-linked bonds andloans, irrespective of tenor.

Regularity of verification

At the time of applying for
certification and then annually
thereafter.

At the time of applying for
certification and then annually
thereafter.

ExamplesCertification of an SLB issued by aCement manufacturing company.

Certification of a series of SLBs
issued by a Cement manufacturing
company.

Safeguards onwider entity

Yes – on wider Parent Group.

Yes – on wider Parent Group.

Certification attaches to

Climate Bonds
Bonds Standard
Standard andand Certification
Certification Scheme
Scheme || Page
Page 62
ClimateCERTIFICATION PROCESSSUSTAINABILITY-LINKED
DEBT INSTRUMENTSSLD Certification
Application
SLB
Certification
Application:

Certification
Agreement
1.1.Certification
Agreement
Certification
Information
2.2.Certification
Information
Form Form (CIF)
3.3.Verification
ReportVerification Report
Submitted to CBICertification
Awarded by
Climate Bonds

Annual Verification
and ReportingNO

Certificationof new bonds
Awarded by
Climate Bonds

Certification
confirmed by
Climate Bonds
Certification is
confirmed or awarded

SLD Issuances
New SLBin the year?

YESDecision
NOReportingNO

Has all
HaveallthetheSLD
SLBs
matured?
matured?

YES

End ofprocess

Climate Bonds Standard and Certification Scheme | Page 7

CBIFfornew
newSLBs
SLD
CIF forSLD

Contact usContact email for Certification Team: certification@climatebonds.net
Detailed requirements information on Certification can be found on the
Climate Bonds website: https://www.climatebonds.net/certification

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 purposesonly. 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 Bond 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 Bond Standard carries no implication (and should not be understoodas 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 orentity 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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