Agriculture Production Criteria

Climate Bonds Standard andCertification Scheme
Draft for Public Consultation
Agri-Food Standards TeamNOTE: These Criteria can be used to certify use-of-proceeds instruments, sustainability-linked
debt instruments, assets and entities per the Climate Bonds Standard

Revision

Date

Summary of Changes

Rev. 0.1

18.07.2024

Draft for Public Consultation

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Table of Contents
1

2

3

Introduction

1.1

The Climate Bonds Standard

5

1.2

Environmental scope of the Agriculture Production Criteria

5

1.3

What can be Certified under the Agriculture Production Criteria

5

1.4

Documents supporting the Criteria5

1.5

Revisions to the Criteria

6

1.6

Acknowledgements

6

Agriculture production activities in scope

7

2.1

Agriculture production in scope

7

2.2

The boundary of the production unit

8

2.3

Alignment with other Sector Criteria

8

Assets and use of proceeds bonds for climate measures

10

3.1

Eligible types of expenditures

10

3.2

Precondition: deforestation- and conversion-free agriculture production system

11

3.3

Measures eligible for climate mitigation

12

A. Measures for reducing absolute greenhouse gas emissions (GHG) emissions (N2O, CH4, and CO2)

12

B. Measures to sequester Carbon in agricultural land

14

3.3.1

4

5

Demonstration of compliance: certified carbon accounting auditor

18

3.4

Measures eligible for climate adaptation in production units

18

3.5

Climate change adaptation and/or mitigation criteria for supporting activities outside of production units

20

Entity and sustainability-linked debt Certification

4.1

23

Agricultural Production Criteria for entity Certification

23

4.1.1

Precondition: Deforestation- and conversion-free agriculture production system

25

4.1.2

Scope of emissions and system boundaries for entity Certification

26

4.1.3

Criteria for GHG emissions transition pathway for agriculture production

28

4.1.4
Excel tool for identifying Climate Bonds emission pathways for agri-food commodities in scope in the Agriculture
Production Criteria
32
4.1.5

How to account for carbon removals at the entity level

32

4.1.6
Qualitative proxies that can be used as Criteria for entity Certification without meeting quantitative climate
performance targets
33
4.2
5

Agriculture Production Criteria for sustainability-linked debt Certification

34

Safeguards

35

5.1

Adaptation and Resilience safeguard

36

5.2

Biodiversity safeguard

38

5.3

Water safeguard

40

5.4

Social safeguard

42

5.5

Animal welfare safeguard

45

6

Definitions

46

7

Acronyms

49

8

Bibliography

50

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Appendix 1: Adaptation and Resilience checklist for relevant production unit(s)51Appendix 2: Guidance for completion of Adaptation and Resilience checklists

52

1.

Identifying critical interdependencies

52

2.

Identifying potential physical climate risks

52

3.

Physical climate change risks to be considered

53

4.

Risk assessment

53

5.

Measures to take to ensure ‘fit for purpose’53

6.

Identifying do no harm aspects

54

Appendix 3. Additional information on biodiversity safeguard

55

Appendix 4. Additional guidance for meeting the social safeguard from existing standards and regulations

56

Appendix 5: TWG and IWG members

59

List of Figures
Figure 1. Flowchart of the Criteria for assets and use of proceeds (UoP) Certification. ........................................................... 11
Figure 2. Flowchart of the Criteria for agriculture production entity and SLDs Certification. ................................................... 25
Figure 3. Activities on scope for emissions accounting in entities transition pathways. ........................................................... 28

List of Tables
Table 1. Assets or projects partially or wholly covered by other sector Criteria. ........................................................................ 9
Table 2. Assets and UoP: precondition eligibility requirements. .............................................................................................. 11
Table 3. Assets and UoP: Eligible measures for reducing absolute emissions (N2O, CH4 and CO2), including intervention
category, target GHG, eligible measures, required demonstration of compliance, and if applicable to the whole
production unit (Yes) or applicable only to specific activities (No). ................................................................................. 12
Table 4. Assets and UoP: Eligible measures for Carbon sequestration with information on intervention systems, eligible
measures and required demonstration of compliance. All the eligible measures can be applied to the whole production
unit(s) or as separated activities within production units. ............................................................................................... 15
Table 5. Additional demonstration of compliance for carbon sequestration eligible measures for assets and UoP to be included
in verified farm management plan (one of two options A or B). ...................................................................................... 17
Table 6. Assets and UoP: Eligible measures for climate adaptation in agriculture production units, including intervention
category, climate adaptation option, eligible measures, required demonstration of compliance, and if the label applicableto the whole production unit (Yes) or applicable only to specific activities (No).............................................................. 18
Table 7. Assets and UoP: Eligible measures for supporting activities aimed at climate adaptation and/or mitigation outside of
agriculture production units. ........................................................................................................................................... 21
Table 8. Requirements for Entity Certification under two levels: `Aligned´ with the 1.5°C pathway for agriculture productionand `Transition´ to the 1.5°C pathway for agriculture production. .................................................................................. 24
Table 9. Entity and SLDs: precondition eligibility requirements. .............................................................................................. 25
Table 10. Production systems included in the scope of these Criteria for entity and SLD certification. ................................... 26
Table 11. Proxies that can be used as qualitative Criteria for entity Certification without meeting GHG emission pathway and/or
without full accounting of GHG emissions in the eligible entity (until 2030). .................................................................. 33
Table 12. Requirements for sustainability-linked debt (SLD) Certification under two levels: ‘Aligned’ with the 1.5°C pathway for
agriculture production and ‘Transition’ to the 1.5°C pathway for agriculture production. .............................................. 35
Table 13. Adaptation and Resilience safeguard: requirements and demonstration of compliance for any type of issuer. ....... 37
Table 14. Biodiversity Safeguard: requirements and demonstration of compliance for any type of issuer. ............................. 38
Table 15. Example of common identified risks to biodiversity and potential response options (Source: Climate Bonds own
elaboration based on TNFD analysis (2023). .................................................................................................................... 39
Table 16. Water safeguard: requirements and demonstration of compliance for any type of issuer. ...................................... 41

List of Boxes
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Box 1: Two levels of Entity Certification under Climate Bonds Standard .................................................................................. 23
Box 2. SBTi FLAG guidance and Climate Bonds Agriculture Production Criteria. ...................................................................... 28
Box 3. Example for how to meet the Agriculture Production Criteria 1.5°C transition pathway for agri-food entities (and their
SLDs). ............................................................................................................................................................................... 31

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1 Introduction
1.1 The Climate Bonds Standard
Investor demand for climate bonds is strong and is expected to increase in line with the delivery of quality products into themarket. Sustainable debt issuance as of end of year 2023 was on the order of USD5.5-tn and continues on an upward trajectorywith ongoing diversification in the types of debt issued. To support this growth, standards, assurance, and certification are
essential to demonstrate credibility, which improves confidence and transparency.
The Climate Bonds Standard and Certification Scheme is an easy-to-use screening tool that provides a clear signal to investors andintermediaries on the climate integrity of Certified Climate Bonds.
At the core of the Standard is a suite of sector-specific eligibility Criteria, each of which sets climate change benchmarks for that
sector. These are used to screen debt instruments, assets and/or entities, so that only those with climate integrity, either throughtheir contribution to climate mitigation, and/or to adaptation and resilience to climate change, will be Certified.
These sector-specific Criteria are determined through a multi-stakeholder engagement process, including a technical working
group (TWG) and an industrial working group (IWG), convened and managed by Climate Bonds, and are subject to public
consultation. Finally, they are reviewed and approved by the Climate Bonds Standard Board (CBSB).
The Climate Bonds Standard and Certification Scheme is supported by the overarching Climate Bonds Standard which sets out thecross-sectoral as well as sector-specific Criteria all Certified instruments, assets, and entities must meet.

1.2 Environmental scope of the Agriculture Production Criteria
Currently, Certification requirements address:●

climate change mitigation;●

climate change adaptation; and●other environmental and social safeguards.

1.3 What can be Certified under the Agriculture Production Criteria
The following can be Certified under these Criteria following the update of the overarching Climate Bonds Standard:
1.

Assets and Use-of-proceeds (UoP) bonds financing climate mitigation measures (Section 3.2; e.g., investments aiming to
reduce direct farming emissions and support soil carbon sequestration) and climate adaptation measures (Section 3.3;
e.g. climate forecasting, flood risk reduction).

2.

Entities (Agri-food farming companies) and sustainability-linked debt (SLD) issued by those entities under Section 4.

The Climate Bonds Standard (CBS) provides any cross-sectoral requirements for UoP, asset, entity or SLD Certification which must
be met in addition to the agriculture production-specific requirements described in this document.
Applicants to the CBS must provide information to demonstrate compliance with the Criteria, which is validated by third-party
Climate Bonds approved verifiers in the assurance process.

1.4 Documents supporting the Criteria
Specific information to support applicants and verifiers is available at Agriculture Production Climate Bonds Initiative as follows:●

Agriculture Production Background Paper detailing how the criteria were chosen;●

Agriculture Production Frequently Asked Questions (FAQs);●

Agriculture Production Criteria Public Consultation Feedback and Responses Summary.

In addition, the following cross-cutting information to support applicants and verifiers is available as follows:●

The Climate Bonds Standard contains the requirements of the overarching CBS;●The Climate Bonds Standard v4.2 Entity and Sustainability-Linked Debt Checklist documents provide further informationon the cross-sectoral requirements for entity and SLD Certification respectively.

For more information on Climate Bonds and the Climate Bonds Standard and Certification Scheme, see www.climatebonds.net.

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1.5 Revisions to the Criteria
These Criteria will be reviewed by the TWG on a regular basis, considering the issuances in the early stages, and any
developments in improved methodologies and data that can increase the climate integrity of future issuances. As a result, theCriteria are likely to be refined over time, as more information becomes available. Certification will not be withdrawn retroactively
from bonds Certified under earlier versions of the Criteria.

1.6 Acknowledgements
Climate Bonds gratefully acknowledges the Technical Working Group (TWG) and Industry Working Group (IWG) members
who provided their time and expertise during the development of these Criteria. The full list of members is provided inAppendix 5.
Special thanks are given to Reyes Tirado, Global Agri-Food Lead at Climate Bonds and technical lead for these Criteria, Ewan
Thomson and Chrys Pablo, for coordinating the development of the Criteria through the Technical Working Group, andJoseph Poore, Lead Consultant, HESTIA Project, University of Oxford, for supporting the development of the Criteria.

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2 Agriculture production activities in scope
The global food system accounts for 21-37% of total global greenhouse gas emissions making it a major contributor to climatechange.1
The agriculture production stage of the supply chain is the largest contribution of food´s emissions, mostly as N2O and CH4
emissions from crop and livestock production and CO2 emissions from land use/land-use change activities and manufacturing
inputs. The mitigation of these emissions is the focus of these Criteria.
Remaining food system emissions arise from post-farm supply chain activities: retail, transport, consumption, waste management,
industrial processes and packaging. These will be the subject of the future Climate Bonds Food Value Chain Criteria to be
developed during 2024.
The transformation of agriculture production over the coming decades is essential to keeping global warming as close as possible
to the 1.5oC goal2. 1.5°C transition pathways across sectors require that agriculture practices fulfil two main mitigation elements:●

A reduction in emissions of N2O and CH4 gases (with a significant effect on short-term warming dynamics).

●

Sequester carbon from the atmosphere into agriculture soils and biomass.3

These two elements are essential for the food system transition towards 1.5°C aligned emissions trajectories, and one cannot
substitute the other. Furthermore, it is essential that the sector applies adaptation measures to ensure the long-term integrity offood production for human wellbeing.

2.1 Agriculture production in scope
These Criteria apply to eligible agri-food production assets and entities, and their associated financial instruments: use of proceeds(UoP) and sustainability-linked debt (SLDs).
The Criteria cover the agriculture production stage of the food value chain (framed in red in Figure 1). The rest of the food value
chain will be covered by additional future sector Criteria (Food Value Chain).
These criteria are for agriculture production entities (and their debt), i.e. farms composed of one or more production units, involvedin the production of crops grown for human food and animal feed and livestock products.
Agriculture production activities in scope:●

All perennial and non-perennial crop production potentially grown for human food are included (e.g., alfalfa, oil palm).
Agroforestry4 production systems where food crops and animals take up more than 50% of the land area are included.

●

Livestock production of all terrestrial livestock animals are included, as are milk and eggs. (For entities and SLDs, aquaculture
production is also included, but not for assets and UoP).

Agriculture production activities out of scope:●

Crops grown exclusively for non-food uses. Exclusions are therefore textile crops, crops used for construction (e.g., bamboo),rubber, tobacco, bioenergy crops with only non-food uses (e.g., miscanthus), and pharmaceutical crops.

●

Non-food animal products such as leather and wool.

Controlled environment agriculture such as greenhouse or hydroponic production are considered in scope for entity and SLD
certification (see Section 4). However, they are out of the scope for assets and UoP certification due to the special considerations
associated with their infrastructure and energy use. These are covered in the criteria for protected agriculture (currently only
available for a single country: Mexico).
The Criteria for assets and UoP also cover activities undertaken outside of specific agricultural production units that support
mitigation and adaptation measures in farms, but which do not necessarily take place in agriculture production units (Section 3).

1 IPCC, 2019: Summary for Policymakers. In: Climate Change and Land: an IPCC special report on climate change, desertification, land degradation, sustainable land
management, food security, and greenhouse gas fluxes in terrestrial ecosystems [P.R. Shukla, J. Skea, E. Calvo Buendia, V. Masson-Delmotte, H.- O. Pörtner, D. C.
Roberts, P. Zhai, R. Slade, S. Connors, R. van Diemen, M. Ferrat, E. Haughey, S. Luz, S. Neogi, M. Pathak, J. Petzold, J. Portugal Pereira, P. Vyas, E. Huntley, K. Kissick,
M. Belkacemi, J. Malley, (eds.)].
2 Intergovernmental Panel on Climate Change (IPCC) (ed.) (2023) ‘Agriculture, Forestry and Other Land Uses (AFOLU)’, in Climate Change 2022 - Mitigation of Climate
Change. 1st edn. Cambridge University Press, pp. 747–860. Available at: https://doi.org/10.1017/9781009157926.009.
3 Clark, M.A. et al. (2020) ‘Global food system emissions could preclude achieving the 1.5° and 2°C climate change targets’, Science, 370(6517), pp. 705–708.
Available at: https://doi.org/10.1126/science.aba7357.
4 Agroforestry is defined by the FAO as land use systems and technologies where woody perennials (trees, shrubs, palms, bamboos etc) are deliberately used on
the same land management units as agricultural crops and/or animals, in some form of spatial arrangement or temporal sequence.
See
www.fao.org/forestry/agroforestry/80338/en.
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Source: FAO5

Figure 1: Representation of the food value chain. The present Criteria covers upstream and on-farm emissions, as highlighted
by the red dotted line.

2.2 The boundary of the production unit
The boundary of the eligible crop and livestock production system is, in essence, ‘farmgate to farmgate’, this can include noncontiguous lands and production systems (for example, for livestock this can include feed processing facilities, e.g. a soy oil facility
which creates soy meal as the co-product).
The farm is treated as the production unit and includes other areas linked to the agricultural production system by ownership,lease or function. Buffer zones, conservation set asides, and grassland, are part of the agriculture production unit if they
constitute part of the land property of the farm production unit and are not used as offsets for other GHG emissions sources.
Non-contiguous production activities are eligible if they are related to farm production prior to the sale of the product (such as
storage, manure management, or composting) and managed by the production unit.
Issuers are expected to define the land boundaries of the production unit and according to the scope of the instrument.
Eligible activities and associated assets and projects include those integral to the whole production unit (such as land purchasecosts for an entire farm) or only a part of the production unit (such as equipment or infrastructure for eligible measures or thepurchase of additional land for expansion of the farm).

2.3 Alignment with other Sector Criteria
Climate Bonds has developed Sector Criteria with links to the agri-food system, the most relevant of which are summarised inTable 1.

5https://www.fao.org/3/cc9029en/cc9029en.pdf

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Table 1. Assets or projects partially or wholly covered by other sector Criteria.
Section of the agri-foodchain

Covered by other Sector Criteria

Climate Bonds Criteria

Land Use Chain:
Deforestation andConversion of natural
ecosystems

Only for entities in the food value chain
beyond the farm, and only to cover the land
use change element of their decarbonisation
strategies.

Agri-Food Deforestation andConversion Free Criteria

Waste

Waste Management (includes composting
and anaerobic digestion).

Waste Management Criteria

Water Infrastructure

Water infrastructure assets and/or projects.

Water Infrastructure Criteria

Low-carbon fuels

Hydrogen, ammonia, biomass for electricity
production.

Hydrogen, Waste management, andBioenergy Criteria

Renewable electricity
generation facilities

Solar, wind, marine, hydropower,
geothermal and bioenergy.

Solar, Wind, Geothermal, Hydropower,
Bioenergy and Marine Criteria

Electrical Utilities

Electrical utility entities (electricity
generation segment).

Electrical Utility Criteria

Source: Climate Bonds

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3 Assets and use of proceeds bonds for climate measures
These Criteria cover assets and UoP bonds for mitigation measures and activities applied to agriculture production units, where
capital investment should be focussed on achieving significant emissions savings and/or adaptation to climate risks at the farmlevel.
The process to check eligibility involve a four-steps rationale (Figure 1), is explained in detail in the sections below:
1.

Precondition for all issuances: deforestation- and conversion-free (DCF). The land under which the relevant
instrument (i.e. measure, project, asset, or portfolio of assets) will apply must be deforestation- and conversion-freesince 31 December 2010 (cut-off date of 2010 as in previous Climate Bonds Agriculture Criteria (2021) (see Table 2).

2.

Choose the main climate performance focus of the asset, bond or loan issuance :a.

Reduce GHG emissions from farm practice and/or operation (see Table 3).

b.

Sequester carbon in the relevant production system (see Table 4).

c.

Adapt to climate change in the production system (see Table 6).

3.

Check climate adaptation safeguard: Climate impacts risk assessment and risk mitigation checklist (see Section 5.1 andTable 12).

4.

Check other environmental and social safeguards (Section 5):a.

Biodiversity (Section 5.2);b.

Water (Section 5.3);c.

Social (Section 5.4); andd.

Animal welfare (Section 5.5) (if applicable).

3.1 Eligible types of expenditures
Eligible expenditure includes:●

Related and supporting expenditures for projects or physical assets, where the projects or physical assets meet therelevant Sector Eligibility Criteria (such as these Criteria in Section 3);●

Capital expenditures undertaken to increase the value and/or lifetime of the assets or projects;●

Related and supporting expenditures including relevant installation and routine maintenance expenditure and upgrades
undertaken to maintain the value and/or lifetime of the asset.

In line with this, eligible use of proceeds relating to agriculture production systems might include capital and operating expenditure
relating to, for example: (1) inputs (e.g., seeds, fertilisers, energy), (2) capital goods (e.g., farmland, equipment, housing, storage),(3) crop-based transformation processes (e.g., crop cultivation, planted trees), (4) waste management on the production unit
(composting, manure, crop residue processing, recycling), and (6) primary processing and storage before point of sale.
Eligible uses of proceeds relating to supporting activities generated outside of the production system that enable mitigation or
climate adaptation on production systems can include a variety of capital and operating expenditure associated with the provisionof the eligible product or service.
For the avoidance of doubt, what will not be considered eligible are activities, assets, or projects where the climate benefits areunclear or have an unclear time horizon, for example:●

Research and development programs where climate benefits are unclear based on current science.

●

Biodiversity projects with unclear climate benefits.

●

General behaviour change training with unclear climate objectives.

●

Any project with an unclear time horizon for climate benefits.

●

Expenditure relating to general corporate purposes.

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Figure 1. Flowchart of the Criteria for assets and use of proceeds (UoP) Certification.

3.2 Precondition: deforestation- and conversion-free agriculture production
systemAny asset or UoP must fulfil this requirement and provide evidence of compliance as a precondition for certification. See Table 2.
Table 2. Assets and UoP: precondition eligibility requirements.
Precondition: Deforestation- and conversion-free agriculture production system

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Requirement

Demonstration of ComplianceFarmland that is part of the production
unit or units is free from deforestationand conversion of natural ecosystems
since 31 Dec 2010

Geolocation of production units(polygon for units > 4 ha and single
point for units < 4 ha).

To be verified compared to production
unit land-use status before 31 Dec 2010

3.3 Measures eligible for climate mitigation
Measures eligible for climate mitigation of agriculture production fall under two categories:A) Reducing absolute emissions;B) Sequestering carbon.
In addition, investments in agriculture production units might be focused on:C) Adaptation to climate change, with or without associated mitigation measures. Those are addressed in Section 3.4 below.

A. Measures for reducing absolute greenhouse gas emissions (GHG)
emissions (N2O, CH4, and CO2)
Based on current science, eligible measures for reducing GHG emissions are presented in Table 3, including details on the specificrequirements for demonstration of compliance.
For livestock, one specific exclusion applicable to any asset or UoP relates to intensive livestock operations and factory farms,
following definitions from EU Industrial Emissions Directive.6
Table 3. Assets and UoP: Eligible measures for reducing absolute emissions (N2O, CH4 and CO2), including intervention category,target GHG, eligible measures, required demonstration of compliance, and if applicable to the whole production unit (Yes) orapplicable only to specific activities (No).
Category

GHG

Eligible measure

Demonstration of ComplianceWhole
production
unit

Fertiliser use

N2O

Substituting fossil fuel-based N
fertiliser with organic or zeroemissions N fertilisers while
increasing Nitrogen Use Efficiency(NUE).

A nutrient management plan is in placewith evidence on:

Yes

Examples of eligible substitutions:

1) Projected full replacement of fossil
fuel-based N with organic or zeroemissions N for the period of theissuance,

-

and

-

Biological N-fixation as thesource of nitrogen inputs (e.g.
cover crops for green manuring,etc);Green ammonia.

Not eligible: fertilising with manurefrom intensive livestock operations
and factory farms, following

2) Projected significant increase in NUE(N application fitted with crop
requirements (including data on N inputs
and yields).
A proxy for substitution can also be aconversion plan for the production unit
to certified organic agriculture (IFOAM).

6

Pig farms with more than 350 livestock units (LSU) (equivalent to approximately 1100 adult pigs and 700 sows), poultry farms with laying hens with more than
300 LSU and broilers with more than 280 LSU (equivalent to approximately 40000 chickens for meat, and 21400 laying hens). For farms rearing both pigs andpoultry the limit will be 380 LSU. https://www.europarl.europa.eu/news/en/press-room/20240308IPR19007/reducing-pollution-from-industry-and-largelivestock-farms For LSU conversions see: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Livestock_unit_(LSU)
For bovine cattle, the limit will be for farms with more than 150 LSU, as originally proposed by the Commission.
https://www.europarl.europa.eu/news/en/press-room/20231127IPR15436/pollution-deal-with-council-to-reduce-industrial-emissions.
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definitions from EU Industrial
Emissions Directive.7
Fertiliser use

Flooded ricesystems

N2O

CH4

On-farm organic fertiliser
production and use, including
composting/biochar from farmresidues (inc. vermi-composting).

A farm management plan whichevidences the significance of themeasure, including:Not eligible: fertilising with manurefrom intensive livestock operations
and factory farms, following
definitions from EU Industrial
Emissions Directive.8

2) source and volume of farm residues
utilised, andImproved rice production
management.

Days of flooding reduced by at least 10%,
using practices including9:

Yes1) volume of on-farm organic fertiliser
or compost/biochar produced,3) intended use of the organic fertiliser
production.
Yes1) shallow flooding,2) direct-seeded rice,3) short-duration high yielding varieties,4) midseason drying event.
Livestocksystems

CH4

Transition farm income towards
reduced herd size.10

A farm management plan whichevidences the significance of themeasure, including:Yes1) reduced livestock operation to be atleast 50% of LSU11 for the period of
the issuance, with potential
substitutions (investments) in otherproduction systems with lower GHG
footprint (i.e., plant-based protein
production, lower emitting livestock
species), while supporting farmincome; or2) reduced emissions from farmoperation of at least 50% total GHG
emissions.
Livestocksystems

CH4

R&D of meat and dairy alternatives tosubstitute or downsize livestock
production systems (CH4).12

Investment plan for R&D in production
unit(s) seeking alternatives for reducing
livestock production.13

7

No

Pig farms with more than 350 livestock units (LSU) (equivalent to approximately 1100 adult pigs and 700 sows), poultry farms with laying hens with more than
300 LSU and broilers with more than 280 LSU (equivalent to approximately 40000 chickens for meat, and 21400 laying hens). For farms rearing both pigs andpoultry the limit will be 380 LSU. https://www.europarl.europa.eu/news/en/press-room/20240308IPR19007/reducing-pollution-from-industry-and-largelivestock-farms For LSU conversions see: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Livestock_unit_(LSU)
For bovine cattle, the limit will be for farms with more than 150 LSU, as originally proposed by the Commission.
https://www.europarl.europa.eu/news/en/press-room/20231127IPR15436/pollution-deal-with-council-to-reduce-industrial-emissions.
8
Pig farms with more than 350 livestock units (LSU) (equivalent to approximately 1100 adult pigs and 700 sows), poultry farms with laying hens with more than
300 LSU and broilers with more than 280 LSU (equivalent to approximately 40000 chickens for meat, and 21400 laying hens). For farms rearing both pigs andpoultry the limit will be 380 LSU. https://www.europarl.europa.eu/news/en/press-room/20240308IPR19007/reducing-pollution-from-industry-and-largelivestock-farms For LSU conversions see: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Livestock_unit_(LSU)
For bovine cattle, the limit will be for farms with more than 150 LSU, as originally proposed by the Commission.
https://www.europarl.europa.eu/news/en/press-room/20231127IPR15436/pollution-deal-with-council-to-reduce-industrial-emissions.
9
EU Taxonomy Technical Annex, p. 131
10

As suggested under EU Taxonomy technical annex, p. 108

11

50% is roughly based on scientific consensus that 1.5C pathways need to half animal protein in averaged global diets (IPCC, 2022)12

As suggested under EU Taxonomy technical annex, p. 108

13This Criteria element will be expanded into a Climate Bond Alternative Protein Criteria to be published in 2025.

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Storage (toavoid food
loss)

CO2,
CH4,
N2O

Optimise storage facilities before thepoint of sale to avoid productionlevel food loss.

Improved storage must aim at reducing
food loss at less than 10% of total foodproduction from post-harvest to
distribution (except for cereals and grains
which should aim towards less than 5%
food loss).14

No

Energy use

CO2

Energy-efficient traction, irrigation,and storage (reduction in the top 25%
of energy efficiency rates forequipment available in-country)

Examples include:

No●

Solar irrigation pumps●

Agrivoltaics

or,
Use of only renewable energy.

Residuemanagement

CO2,
CH4,
N2O

Optimisation of farm residue use thatavoids combustion and promotes
circularity.

Residue use plan with an estimation of
GHG saved: savings required to be at least
10% of baseline residue emissions

Noe.g., recovering and retention of farmresidues as raw materials for otherindustries (e.g., biochar production,
residue biomass as building or furniturematerial).15
Efficiency

All

Precision agriculture – digitalsolutions to improve the efficiency offarming methods and increase
yields.16

Estimated improvements in efficiency of
input use and/or yields: efficiency gains
required to be > 25% of baseline efficiency
over period of the issuance.

Yese.g., increase efficiency in water andfertiliser use.

B. Measures to sequester Carbon in agricultural land
Eligible measures aimed at sequestering carbon in agriculture land are diverse and often context-specific. However, the measures
outlined below (Table 4) represent a set of interventions for specific farming systems that are scientifically agreed to increasecarbon in agriculture land when performed under the right conditions, with relatively high certainty across a range of climatic andbiophysical farming conditions.17 They have been selected from the scientific literature as those with the highest certainty tomaintain existing carbon sinks and/or increase carbon sequestration in above- and/or below-ground carbon stocks.
Eligible measures fall under five overarching interventions related to carbon sequestration (listed in decreasing order of global
average mitigation potential):
1.

Restoration of agricultural land.

2.

Agroforestry.

3.

Application of biochar.

4.

Increasing soil organic carbon in grasslands.

5.

Increasing soil organic carbon in croplands.

The one general condition that precludes any significant durable carbon sequestration impact for any eligible measure is theincrease of organic carbon (biomass) input in the agriculture land. Without a sustained increase of carbon input carbon
sequestration generally can not occur. This carbon input can take many forms (e.g., biomass residues, biochar, organic matter

14

FAO Food Loss Index. An introduction. C. Fabi. 2020 and FLAPP tool at flapp.fao.org

15

At least 10% as a minimum benchmark, although GHG reductions can be as high as 40%.

16

EU Taxonomy technical annex, p. 362

17Intergovernmental Panel on Climate Change (IPCC) (ed.) (2023) Climate Change 2022 - Mitigation of Climate Change: Working Group III Contribution to the Sixth
Assessment Report of the Intergovernmental Panel on Climate Change. 1st edn. Cambridge University Press. Available at: https://doi.org/10.1017/9781009157926.
Agriculture Production Criteria- Climate Bonds Initiative

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amendments) and it should be sourced sustainably and without undesirable leakages (e.g., subtracting carbon from one system to
add it into another).
Hence, the set of eligible interventions outlined in Table 4 below, must all follow and demonstrate one condition:
There should be an increased carbon input into the production unit that is subject to the carbon sequestration claimof at least 20% from the Certification year over the following 10 years, and thereafter the carbon stock must be
maintained and/or increased up until 2050 or at least 20 years from Certification date.18

This condition acts as a proxy for the accounting of the carbon sequestration itself, making the compliance of the intervention
simpler for issuers (agriculture producers) without the need for reporting on the full carbon stock accounting and/or
measurement.
However, this condition also applies to issuers which choose to provide full carbon accounting of carbon sequestration claims
following the GHG Protocol methodology. In this case, the requirement instead is:for carbon sequestration estimates (e.g., tC ha-1yr-1) to progressively increase on an annual basis from theCertification year over the following 10 years, and thereafter the carbon stock must be maintained and/or increased
up until 2050 or at least 20 years from Certification date.19

The GHG Protocol Land Sector and Removals methodology is subject to five conditions for inclusion:20●

Ongoing storage monitoring.

●

Traceability.

●

Primary data.

●

Uncertainty.

●

Reversals accounting.

These five conditions also apply to any eligible asset or UoP to be Certified under the Agriculture Production Criteria.
Table 4. Assets and UoP: Eligible measures for Carbon sequestration with information on intervention systems, eligible measuresand required demonstration of compliance. All the eligible measures can be applied to the whole production unit(s) or as
separated activities within production units.
Intervention systems

Demonstration of compliance(from highest to lowest Eligible measures
C sequestration
potential globally)
1. Restore agricultural
land.

Reforestation21 and/or restoration, including:●peatland,●mangroves/wetlands,●

overgrazed grasslands with depleted soilorganic carbon.

Verified restoration plan including thefollowing:22
1) Geolocation of land plots anddemonstration of historical land use
pre-issuance.
and2) Verified management plan that
ensures conditions A or B for increased
carbon input or carbon sequestration(Table 5).

18

Climate Bonds Agriculture criteria (2021) Agriculture Criteria Background paper, (2021), p. 24, 25
Noting the following exception: for soils where it can be demonstrated that saturation levels have been reached, no further
increase in carbon content is expected. In this case, existing levels should be maintained long-term (with a 20 year plan, at the minimum).
20
GHG Protocol (2022), Land Sector and Removals Guidance | GHG Protocol, Draft for Pilot Testing and Review Details on each of these specific19

aspects are discussed in Chapter 6 – Removal Accounting pp. 84-101.
21
shifting from non-forest cover to forest cover at 30% tree cover threshold with a region-specific natural forest regrowth.
22
Adapted from recommendations in “Greenhouse Gas Protocol Land Sector and Removal Guidance (September, 2022)”
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2. Implement ormaintain agroforestry●

agroforestry in croplands including perennial
crops (e.g. cocoa),

Verified management plan that ensuresconditions A or B for increased carbon
input or carbon sequestration (Table 5).

(incorporating woody
perennials into
agriculture production
units). 23●

agroforestry in silvopastoral systems (grasslands
and pasture lands).24
And, if option B, this specific metric:

3. Apply biochar to
agricultural lands.

Application of biochar produced with biomass
residues sourced from deforestation andconversion-free (DCF) agricultural land. 26●

At a minimum, estimated carbon
sequestration potential must be above
0.6 tC ha-1 yr-1 of carbon
aboveground.25

Verified management plan that ensuresconditions A or B for increased carbon
input or carbon sequestration (Table 5).
And:
Verified farm management plan including:
1) information of the quantity andsourcing of biochar (from DCF
residues),
2) application rate,3) edaphic conditions that secure biocharstability.

4. Improve soil carbon
management ingrasslands andpasturelands.

5. Improve soil carbon
management incroplands.

●

Vegetation management: improved grassvarieties/sward composition, deep rooting
grasses, increased productivity (without
additional fossil-fuel fertiliser inputs).

●

Livestock management: fitting stocking
densities to carrying capacity, fodder banks, andfodder diversification.

●

Fire management: improved use of fire,including fire prevention and improved
prescribed burning.27●

Crop management: e.g., improved cropvarieties, crop rotation, use of cover crops,
shifting to perennial cropping systems(including agroforestry), crop diversification.

●

Nutrient management: fertilisation withorganic amendments/green manures.

●

Reduced tillage with residue retention.

Verified management plan that ensuresconditions A or B for increased carbon
input or carbon sequestration (Table 5).

Verified management plan that ensuresconditions A or B for increased carbon
input or carbon sequestration (Table 5).
In addition:●

For nutrient management, therequirement is for increases in NUE
and/or not additional net N2Oemissions.

23

Agroforestry is defined by the FAO as land use systems and technologies where woody perennials (trees, shrubs, palms, bamboo, etc) are deliberately used on
the same land management units as agricultural crops and/or animals, in some form of spatial arrangement or temporal sequence. See
www.fao.org/forestry/agroforestry/80338/en and see IPCC WGIII Chapter 7, Section 7.4.3.3 Agroforestry p. 790.
24
Silvopastoral systems are those that combine tree growing with the production of livestock. https://www.sciencedirect.com/topics/agricultural-andbiological-sciences/silvopastoral-systems.
25
The carbon sequestration potential of agroforestry (including both grasslands and croplands) has been found to range between 0.59 and 6.24 t ha–1 yr–1 ofcarbon above-ground. Below-ground carbon often constitutes 25% or more of the potential carbon gains in agroforestry systems (IPCC, AR6 WGIII, Chapter 7, p.
791).
26
According to IPCC AR6 WGIII Chapter 7: “Biochar is produced by heating organic matter in oxygen-limited environments (pyrolysis and gasification). Feedstocks
include forestry and sawmill residues, straw, manure and biosolids. When applied to soils, biochar is estimated to persist from decades to thousands of years,
depending on feedstock and production conditions.”
27
From IPCC, 2022, AR6 WGIII, Chapter 7, p.788. All these measures are recognised as Sustainable Soil Management Practices by FAO (Baritz et al. 2018).
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•For reduced or no tillage, therequirement is for at least 30% of crop
residues left on the soil surface
permanently (this should be reflectedin the farm management plan).28

One of the two conditions in Table 5 are required for demonstration of compliance of any of the eligible practices outlined inTable 4. Measures aimed at maintaining carbon storage, in cases where land or soil is already close to maximum potential for C
sequestration, are eligible as far as they can demonstrate carbon storage levels and management plan to maintain those.
Table 5. Additional demonstration of compliance for carbon sequestration eligible measures for assets and UoP to be
included in verified farm management plan (one of two options A or B).
Required verified farm management
plan must demonstrate one of two
conditions: A or B.

Demonstration of compliance

A: Annual increase of carbon input into Verified farm management plan must include:
the production unit of at least 20% from● Baseline of carbon input into the production unit at the time of
the Certification year over the following
certification.
10 years, plus its maintenance up until
2050 or at least 20 years from● Estimation of increased carbon input, including targets with baseyear/period (with at least 20% increase from the certification year overcertification date.
10 years).

●

Expected length of carbon input increase (20 years minimum).

●

Metrics, methods, data, and assumptions used to quantify temporary
carbon inputs and maintenance.

●

Demonstration of no net increase of N2O emissions (e.g., from increased
N fertiliser use).

●

Demonstration of likelihood of permanence: e.g. secure land rights, lowthreat of conversion, contractual commitments.

B: Annual increase of carbon
Verified farm management plan must include:
sequestration estimates from the● Baseline of carbon content in the production unit at the time of
Certification year over the following 10
certification.
years, and thereafter the carbon stock
must be maintained up until 2050 or at ● Estimation of increased carbon sequestration, including targets withbase year/period, with a rate of C increase of at least 0.2 t C ha-1 yr-1
least 20 years from the certification
over 10 years. 29
date.

●

Expected length of carbon storage (20 years minimum).

●

Metrics, methods, data, and assumptions used to quantify temporary
carbon storage (inc. crop plans and baseline values).

●

Demonstration of no net increase of N2O emissions (e.g., from increased
N fertiliser use).

●

Demonstration of likelihood of permanence: e.g. secure land rights, lowthreat of conversion, contractual commitments.

28

https://iopscience.iop.org/article/10.1088/1748-9326/ab503b also: low till refers to the practices of no-till, reduced-till, strip tillage, mulch tillage, row tilland contour till https://iopscience.iop.org/article/10.1088/1748-9326/ad3f32
29
0.2 tC ha-1 yr-1 is based on the lower average range in Lessman et al. 2022, which is the lower range for SOC increase in croplands, which in turn is the intervention
practice with the lowest potential. With this minimum value, it is ensured interventions are material in a wide variety of climatic and soil conditions. SOC increases
should aim towards much higher values in agroforestry, biochar, and other practices. Lessmann, M. et al. (2022) ‘Global variation in soil carbon sequestration
potential through improved cropland management’, Global Change Biology, 28(3), pp. 1162–1177. https://doi.org/10.1111/gcb.15954.

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For both options:Technical and cost-effective carbon sequestration potential calculated by country in the database by Roe et al 2021
should be used to benchmark and verify carbon sequestration claims of interventions in different locations (Excel
database can be found in this link under Supporting Information:
https://onlinelibrary.wiley.com/doi/10.1111/gcb.15873).

3.3.1 Demonstration of compliance: certified carbon accounting auditor
The applicant shall provide evidence that the eligible measures will achieve a performance consistent with one of the two
conditions explained in Table 5 (i.e., increased carbon input and/or sequestration in t C ha-1 yr-1), and that the applicant has acontract or agreement with a certified carbon accounting auditor, demonstrating in an annual report and a detailed farmmanagement plan that the estimated increased carbon input and/or sequestration claim can be achieved.

3.4 Measures eligible for climate adaptation in production units
Agriculture producers aiming to Certify assets or UoP to adapt to climate change can apply eligible measures and activities
summarised in Table 6.
Many climate adaptation interventions have synergies with mitigation measures (i.e., agroforestry) and hence are included under
Section 3.2 with a primary focus on mitigation of GHG emissions.
Table 6. Assets and UoP: Eligible measures for climate adaptation in agriculture production units, including intervention
category, climate adaptation option, eligible measures, required demonstration of compliance, and if the label applicable to
the whole production unit (Yes) or applicable only to specific activities (No).

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Category

Climateadaptation
option(investments
aimed at:)Details of eligible measures

Demonstration of complianceWhole
production
unit

Agronomic
management

Organic
management.

Use of certified organic practicese.g., no/low tillage or crop residue
retention to increase soil health.

Third-party certification (IFOAM).

Yes

Adjustment ofplanting dates
and cropswitching.

Changes in cropping pattern andcrop systems e.g., shifting
planting schedules in response to
the early or late onset of the rainyseason, and marketing tofacilitate crop switching.

Verified farm management plan thatverifies a significant Adaptation andResilience (A&R) benefit.

Yes

Shifting cropping
location in
response to
climate.

Changes in cropping location due
to climate hazards.

Verified farm management plan thatverifies a significant A&R benefit.

Yes

Flood risk
reductionmeasures.

Floodplain restoration,
saltmarshes, mangroves or peat
renaturalisation.

Verified restoration plan that includes
the following:30

No1) Geolocation of land plots anddemonstration of historical landuse.
2) Estimation of flood risk
reduction, including targets withbase year/period.
3) Expected length of flood risk
reduction (20 years minimum).
4) Metrics, methods, data, andassumptions used to quantify
flood risk reduction.
5) Demonstration of likelihood ofpermanence: e.g. secure land
rights, low threat of conversion,
contractual commitments.

Agriculture
diversification

Mixed systems.

Landscapediversification

30

Shift production unit to a
combination of crops, livestock,fish and trees.

Verified farm management plan, that
includes the following:

For example, rotational grazing,fire management to control
woody thickening of grass.

Verified farm management plan, that
includes the following:●●

Estimate of agriculture
diversification effect, including
targets with base year/period,
which verifies a significant A&R
benefit.

Plans for landscapediversification and estimates of
A&R benefit.

Adapted from recommendations in “Greenhouse Gas Protocol Land Sector and Removal Guidance (September, 2022)”

Agriculture Production Criteria- Climate Bonds Initiative

Yes

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NoMeasures to adjust water
management based on seasonaland spatial patterns of present
and projected water availability,with proof of no maladaptatione.g., rainwater storage and deficit
irrigation techniques.

Verified farm management plan, that
includes the following:

Training andcapacity building
on climatechangeresponses.

Measures to enhance thestrengths and attributes of, andresources available to, anindividual, community, society ororganisation to respond toclimate change.

Verified training and capacity building
plan at the appropriate scope andboundary, and estimations of A&R
benefit.

No

Economic/financi
al measures.

Incentives towards livelihood
diversification and social
protection such as crop insurance.
New crop insurance schemes
based on changes in weather
patterns.

Verified implementation plan of
economic/financial measures thatverifies a significant A&R benefit.

No

Genetic
improvements

Use of climateresilient cultivars
and/or breeds
and/or breedingof climateresilient traits.

Eligible traits for resistance tobiotic and abiotic stress, including
drought tolerance, heat
tolerance, flood tolerance, andpest resistance.

Verified implementation plan
including estimate of A&R benefits
and attention to yield penalty inaverage years.

No

Collective
resource
management

Community
seed/feed/fodder
banks.

Strengthens regional production
capabilities, shares costs, and derisks individual producers e.g.,
Village Resource Centres.

Verified implementation plan
including estimate of A&R benefits.

No

Climateservices

Improved
weather
forecasting andearly warning
systems.

Technical and institutional
measures to forecast, predict andcommunicate timely andmeaningful warning informatione.g., integrating information frommultiple sources at different
scales, participatory collection
and analysis of climate data,
making forecast information
available in local languages andfor the non-literate, which helps
contribute to disaster risk
reduction management andaccuracy in decision-making on
farms.

Verified implementation plan
including estimate of A&R benefits.

No

Infrastructureandtechnology

Supporting
activities
withinagriculture
productionunits

On-farm irrigation
and water
management.

No1) Plans for improved water
management (i.e. water savings
and improved water use
efficiency).
2) Proof of no maladaptation for
irrigation practices required.

3.5 Climate change adaptation and/or mitigation criteria for supporting
activities outside of production units
In addition to certifying measures and activities in agriculture production units, there are supporting activities (and resulting
products or services) aimed at enabling climate adaptation and resilience and/or climate mitigation by third-party applicants thatcan be Certified.
Eligible activities for supporting activities for climate adaptation and mitigation are those included in Table 7.
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Table 7. Assets and UoP: Eligible measures for supporting activities aimed at climate adaptation and/or mitigation outside of
agriculture production units.
Category

Climateadaptation and/or
mitigation
supporting
measures

Details

Demonstration of compliance

Supporting
activities
outside of
productionunits

Training andcapacity building
on climate change
responses.

Measures to enhance the strengths andattributes of, and resources available to,an individual, community, society ororganisation to respond to climatechange.

Verified training and capacity
building plan at the appropriate
scope and boundary, andestimations of A&R benefit.

Economic/financial
measures.

Incentives towards livelihood
diversification and social protection.

Verified implementation plan of
economic/financial measures, andestimations of A&R benefit.

R&D forgenetic
improvements

Breeding ofclimate-resilient
traits.

Eligible traits for resistance to biotic andabiotic stress, including droughttolerance, heat tolerance, flood
tolerance and pest resistance, both incrop cultivars and animal breeds.

Verified implementation plan
including estimation of A&R
benefits.

Collective
resource
management

Community
seed/feed/fodder
banks.

Strengthens regional production
capabilities, shares costs and de-risks
individual producers.

Verified implementation plan
including estimation of A&R
benefits.

Climateservices

Weather
forecasting andearly warning
systems.

Technical and institutional measures toforecast, predict and communicate
timely and meaningful warning
information e.g., include integrating
information from multiple sources atdifferent scales, participatory collection
and analysis of climate data, making
forecast information available in local
languages and for the non-literate, whichhelps contribute to disaster risk
reduction management and accuracy indecision-making on farms.

Verified implementation plan
including estimation of A&R
benefits.

R&D forclimatemitigation
practices andtechnologies.

R&D on farming
practices andinnovations to
reduce emissions
or increase uptakeof GHG in
agriculture lands.

Include advances in nitrification
inhibitors and enhancing the uptake of
CH4 and N2O in agriculture lands31. Can
be activities applied within production
unit(s) or outside production unit(s).

Verified implementation plan
including estimation of climate
mitigation benefits required to beat least 25% GHG emission
reduction over the period of theissuance.

Services
contributing
to the goal of
deforestationand natural
ecosystem
conversion
free sourcing.

Land-use changemonitoring or
traceability
systems.

Examples of such activities include, but
are not limited to:

Verified implementation plan andestimations of benefits for DCF
sourcing.

••

Traceability software or hardware
systems.
Satellite monitoring systems.

31 Global Change Biology (2007) 13, 1–17, doi: 10.1111/j.1365-2486.2006.01280.x and https://doi.org/10.1016/j.geoderma.2021.114931

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Agriculture Production Criteria- Climate Bonds Initiative

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4 Entity and sustainability-linked debt Certification
The agricultural production Criteria detailed in this section can be used to certify:●

A whole entity (in this case, an agricultural production company, or part of the company producing any agri-food commodity(under Section 4.1);●

Sustainability-linked debt (SLD) issued by an entity dedicated to producing agriculture commodities (under Section 4.2).

The sections below contain methodological notes applicable to these Criteria.
See also the Climate Bonds Standard for the cross-sectoral requirements for entity and SLD Certification relating to transition
plans, disclosure for the Certified entity, and requirements relating to the parent group. These cross-sectoral requirements must
be met in addition to the specific requirements described here for agricultural production.
NOTE:

Current proposals allow for the Certification of part of a company or group of companies, or SLD,that relate to part of a company or group of companies (see the Climate Bonds Standard for fulldetails). This flexibility enables Certification of the part of a company or group of companies
relating to agriculture production, separate from the Certification of other group or company
activities of which it forms a part.

4.1 Agricultural Production Criteria for entity Certification
Certification requires compliance with the Climate Bonds Standard Agriculture Production Criteria (explained in this document).
Two levels of entity Certification are available, depending on when the climate mitigation performance targets align with the
Climate Bonds Standard and these Agriculture Production Criteria (see Box 1 and Climate Bonds Standard).
Box 1: Two levels of Entity Certification under Climate Bonds Standard

Two levels of entity Certification are available, depending on when the climate mitigation performance targets align with
1.5°C.
1.

Level 1 – ´Aligned´: The climate mitigation
performance targets align with the Criteria at
the time of Certification and thereafter until
the date the Climate Mitigation Performance
Targets meets the 1.5°C transition pathway or
2050, whichever is sooner.

2.

Level 2 – ´Transition‘: The climate mitigation
performance targets do not align with theCriteria at the time of Certification but align by
31 December 2030 and thereafter until thedate the climate mitigation performancetargets meets the 1.5°C transition pathway or
2050, whichever is sooner.
Source:Agriculture Production Criteria- Climate Bonds Initiative

Climate Bonds

Page | 23

Table 8. Requirements for Entity Certification under two levels: `Aligned´ with the 1.5°C pathway for agriculture production and`Transition´ to the 1.5°C pathway for agriculture production.
Entity Certification
Tier

Entity Certification Requirements

Level 1: Aligned

1.

Climate Mitigation Criteria●

At the time of Certification, the entity can demonstrate that its agricultural production land isdeforestation- and conversion-free since 2010, see Section 4.1.1., and●At the time of Certification, the entity’s average emission intensity meets the sector-specific
Criteria transition pathway, and its future climate mitigation performance targets continue toalign with the transition pathway through to 2050, see Section 4.1.2.

●

Removals at entity level: At the time of certification, the entity may demonstrate that it meets thequantity of Carbon sequestration required to aligned with the pathway at the entity level, see
Section 4.1.5.

2.

Adaptation and Resilience safeguard●

The Certified entity meets the Adaptation and Resilience safeguard described in Section 5.1,
which is reassessed and reconfirmed every five years.

3.

Environmental and social safeguards●

Biodiversity (Section 5.2),●

Water (Section 5.3),●

Social (Section 5.4),●

Animal welfare (if applicable: only for livestock production units) (Section 5.5).

1.

Climate Mitigation Criteria

Level 2: Transition

The Criteria are the same as for Level 1, except:•

At the time of Certification, the entity can demonstrate that its agricultural production land isdeforestation- and conversion-free since 2020, see Section 4.1.1., and•

The Certified entity’s average emission intensity does NOT meet the sector-specific Criteriatransition pathway at the time of Certification, but the future climate mitigation performancetargets align by 31 December 2030 and continue to align thereafter through to 2050. See
Section 4.1.2.

•

Removals at entity level: At the time of certification, the entity may demonstrate that it meets thequantity of Carbon sequestration required to aligned with the pathway at the entity level, see
Section 4.1.5.

2.

Adaptation and Resilience safeguard•

The Certified entity meets the Adaptation and Resilience safeguard described in Section 5.1,
which is reassessed and reconfirmed every five years.

3.

Environmental and social safeguards (same as Level 1)•

Biodiversity (Section 5.2),•

Water (Section 5.3),•

Social (Section 5.4),•

Animal welfare (if applicable: only for livestock production units) (Section 5.5).

Figure 2 shows a schematic representation of the Criteria for entity and SLDs Certification for agriculture production.

Agriculture Production Criteria- Climate Bonds Initiative

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Figure 2. Flowchart of the Criteria for agriculture production entity and SLDs Certification.

4.1.1 Precondition: Deforestation- and conversion-free agriculture production system
Any entity must fulfil this requirement and provide evidence of compliance as a precondition for Certification for all its production
units.
Table 9. Entity and SLDs: precondition eligibility requirements.
Precondition: Deforestation- and conversion-free agriculture production system
Requirement for ´Aligned´ Entities

Demonstration of ComplianceFarmland that is part of the production
unit or units is free from deforestationand conversion of natural ecosystems
since 31 Dec 2010.

Geolocation of production units(polygon for units > 4 ha and single
point for units < 4 ha).

Requirement for ´Transition´ Entities

Demonstration of Compliance

Agriculture Production Criteria- Climate Bonds Initiative

To be verified comparing to production
unit land use status before 31 Dec 2010.

Page | 25

Farmland that is part of the production
unit or units is free from deforestationand conversion of natural ecosystems
since 31 Dec 2020.

Geolocation of production units(polygon for units > 4 ha and single
point for units < 4 ha).

To be verified comparing to production
unit land use status before 31 Dec 2020.

Entities labelled `Transition` from the current moment until 2030 can be considered ´Aligned´ after 2030 if they have
implemented a restoration plan for the land-use changed within the entity boundary which occurred between 2010 and 2020.
This restoration plan is required to follow the AFi guidance, as outlined in the Operational Guidance on Environmental Restoration
and Compensation (2019) 32. The AFi guidance includes details about how a restoration plan should be constructed, including theissues to be considered, location of restoration activity, accountability of delivery and verification processes.
Entities are expected to conduct or support restoration or compensation when they caused, contributed to, or assumed
responsibility for deforestation or conversion that occurred. In the case of deforestation and conversion, fair and just remedy
requires taking effective action to restore the given ecosystems and values to their prior condition and/or providing for the lost
ecosystems and values. The restoration output should provide like-for-like equivalence principle for restoration as a minimum andshould be specific to the ecosystem converted, e.g. peatland converted post 2010 and pre-2020 then it should be peatland
restoration that is in place to adhere to the like-for-like benefits.33

4.1.2 Scope of emissions and system boundaries for entity Certification
These Criteria are for agriculture production entities (and their debt), i.e., farms comprising one or more production units, involvedin the production of crops grown for human food and animal feed, livestock, and aquaculture products.
-

All crops potentially grown for human food are included, but crops grown exclusively for non-food uses are excluded.
Exclusions are therefore textile crops, crops used for construction (e.g., bamboo), rubber, tobacco, bioenergy crops with
only non-food uses (e.g., miscanthus), and pharmaceutical crops.

-

Meat products from all terrestrial animals are included, as are milk and eggs. Non-food animal products such as leather
and wool are excluded.

-

Farmed fish, molluscs and crustaceans are included, but farmed seaweed or farmed marine mammals are currently
excluded due to a lack of data. Captured fish are currently excluded from these criteria as they require special safeguards
to account for overfishing, the effects of trawling on the seabed, the effects of by-catch, amongst other environmental
issues.

These Criteria focus on agri-food systems and thus entities producing non-food products are currently excluded from theseguidelines (Table 10).
Table 10. Production systems included in the scope of these Criteria for entity and SLD certification.
Production
systemIncluded

Excluded

Crops

Crops grown for direct or indirect humanconsumption e.g., grains, vegetables, feed crops.

Crops grown exclusively for non-food uses e.g.,
textiles, bamboo, rubber, tobacco, bioenergy crops.

Livestock

Animal food products from terrestrial animals
e.g., meat, dairy, eggs.

Non-food animal products e.g., leather, wool.

Aquaculture

Farmed aquatic animal foods e.g., farmed fish,
farmed molluscs, farmed crustaceans.

Farmed seaweed, farmed marine mammals, capture
wild fish e.g., wild fish.

Emissions boundaries

All emissions from activities up to the farm gate are included, and carbon removals are accounted for at the entity level only, rather
than the product level.
Considering the activity boundary (Figure 2), entity emissions to be included in climate performance target (i.e., as in per
32 AFi, (2019), Operational Guidance on Environmental Restoration and Compensation OG_Environmental_Restoration_Compensation-2020-52.pdf (accountability-

framework.org)
33 AFi, (2019), Operational Guidance on Environmental Restoration and Compensation OG_Environmental_Restoration_Compensation-2020-52.pdf (accountabilityframework.org)
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emission pathway) are:-Emissions from direct or statistically estimated land use change (CO2 from stock changes, N2O and CH4 emissions fromnatural vegetation burning, CH4, N2O, and CO2 emissions from peat soil burning).34-

Scope 1 emissions from all relevant activities and emission sources within the production unit:
•
•
•
•
•
•
•

-

CH4 and direct and indirect N2O emissions from livestock and manure management;
Direct and indirect N2O emissions from N inputs to agricultural soils (except from N fixation and precipitation);
Non-biogenic CO2 emissions from lime and urea;
CH4 and N2O emissions from rice cultivation;
CH4 and N2O emissions from biomass burning;
CH4 and N2O emissions from aquaculture ponds (as CH4 excreta and N2O excreta); andCO2, CH4, and N2O emissions related to on-farm energy production (including electricity) and fuel combustion(grouped as CO2 -input, fuel burning, lime, urea).

Scope 2 emissions related to purchased energy generation used at the production unit and Scope 3 emissions related topurchased seed, saplings, fertilisers, pesticides, soil amendments (e.g., lime), machinery, fuel, and feed (see details below).

This approach follows the one used by Poore and Nemecek (2018),35 which in turn primarily follows the system boundary in theWorld Food LCA Database.36 This system boundary is consistent with the GHG Protocol Land Sector and Removals Guidelines when
all key scope 2 and 3 emissions are included (see Figure 2). This system boundary was used as it allows usage of the Poore and
Nemecek dataset to set the pathways and because it includes additional key emissions and activities that appear to be missing in
GHG Protocol and the corresponding SBTi FLAG guidelines (see Box 2 below).
Included activities up to the farm gate (scope 2 and 3)
Activities before the farm stage (see Figure 2) which are included in the scope of activities (i.e., scope 2 and 3 emissions) are:
•
•
•
•
•
•
•
•
•
•

Land use change (direct land use change ´dLUC´ or statistically measured land use change `sLUC´)37;
The manufacture of fertiliser, lime, pesticides, and other agricultural inputs;
The manufacture of capital equipment;
The manufacture of infrastructure e.g., greenhouses;
The growing of seeds, saplings, and other similar inputs;
The production and blending of animal feeds;
The production of fuel off farm;
The production of electricity on and off farm;
Irrigation water pumping (if the energy use for this occurs off-farm); andThe transport of all inputs to the farm.

In livestock production systems (or mixed systems), food processing is included in the system boundary if the processing is of a foodthat creates a co-product or waste product which is then fed to animals. Feed blending and other types of feed processing are also
included. However, processing of food for human uses after the farm gate is excluded.

34

Emissions from these LUC activities are included in the scope but are assumed to be zero (as per DCF precondition).

35

Poore, J. and Nemecek, T. (2018) ‘Reducing food’s environmental impacts through producers and consumers’, Science, 360(6392), pp. 987–992. Available at:https://doi.org/10.1126/science.aaq0216.
36

Nemecek Thomas et al. (2019) Methodological Guidelines for the Life Cycle Inventory of Agricultural Products. Version 3.5, December 2019. World Food LCA
Database (WFLDB). Quantis and Agroscope. Lausanne and Zurich, Switzerland.
37
These LUC activities are included in the scope but are assumed to be zero (as per DCF precondition).
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Box 2. SBTi FLAG guidance and Climate Bonds Agriculture Production Criteria.
SBTi FLAG Alignment:
Products: SBTi FLAG include forestry products and textiles, which are excluded here.
Land use change: SBTi FLAG allow the inclusion of soil carbon stock change in their commodity
emission profiles, whereas all removals are accounted for at the entity level here.
System boundary: SBTi FLAG only include pre-farm non-land-based emissions related to fertiliser
manufacture, whereas lime, pesticides, and capital equipment manufacture are included here. Limecan contribute up to a third of GHG emissions in some systems where acid soils are farmed and isgenerally included as an input in all datasets that SBTi FLAG refer to. Capital equipment can be adominant source of impact for greenhouse crops and vineyards and is also included here. Where SBTi
FLAG are ambiguous on whether non-land impacts related to producing animal feed are included, here
they are included, with the assumption they are included in FLAG.
Emissions: SBTi FLAG only appear to account for CO2 emissions related to land use change,
whereas here, CH4 and N2O emissions from natural vegetation and peat soil burning are accounted for.
SBTi FLAG do not appear to include direct CH4 and N2O emissions from aquaculture ponds, but these
are accounted for here.

Figure 3. Activities on scope for emissions accounting in entities transition pathways.

4.1.3 Criteria for GHG emissions transition pathway for agriculture production
Certification at entity-level (and for SLDs instruments) requires a comprehensive accounting and assessment of GHG emissions
from the various activities in the production unit(s) (with the scope explained above), which must comply with an emission
pathway at the time of Certification and into the future.

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Like all sectors, substantial emissions reductions need to be achieved in agriculture to achieve 1.5°C aligned emissions. How fastand by when can be portrayed as a transition pathway, explained below.
The goal is to achieve net-zero GHG emissions by 2050. However, it is generally thought that reducing CH4 and N2O emissions fromagriculture to zero or below will be technically challenging and prohibitively expensive using current technology.38 In addition,
agriculture is expected to be a source of negative CO2 emissions, through reforestation of agricultural land, through increases invegetative cover on farmland (e.g., agroforestry), and through increases in soil carbon stocks on cropland and pasture.
The Climate Bonds pathway for entities in agricultural production includes a GHG emission intensity per each agricultural commodity(i.e., kg CO2eq per kilogram of product) from the current moment until 2050 at least, with a trajectory aligned to the goal of limiting
global warming to 1.5°C.
This provides an annual reference point for GHG emissions intensity for each major agriculture commodity such that the intensity
pathway calculated for each commodity can be scaled up to an entity level pathway by multiplying out the production of eachcommodity by the emissions intensities for each commodity.
The Climate Bonds pathway is based on the Poore and Nemecek database (2018) which contains emission data across approximately
40,000 farms globally for 43 key commodities covering around 90% of global food. These data are used to establish the Criteria
thresholds of emission intensity per each commodity at a given time. This offers the advantage that thresholds are based on realworld data rather than simulated data, and they better represent what producers can achieve in terms of emission intensity
reductions. The system boundary of this study also aligns closely with the SBTi FLAG and GHG Protocol Land Sector and Removals
boundary, and therefore supports its alignment with other guidelines. (Details on the rationale and methodology of the Climate
Bonds pathway creation are in the Background Paper).
Some entities (i.e., agricultural producers) may already perform below this pathway threshold today, while others will require
substantial changes to get there. Equally, some farms are aligning their activities with such a transition and those that are doing sowith a clear plan could potentially achieve Climate Bonds Certification.
To be able to certify as ´Aligned´ the eligible entity would need to meet the Climate Bonds pathway at the given annual reference
point, with a value that is equal or lower than the emission intensity for that annual reference, up until 2050.
Entities that are not currently aligned, certify as ´Transition´ if they have plans to meet the Climate Bonds pathway in 2030, with avalue that is equal or lower than the emission intensity threshold for that annual reference up until 2050.

38

Intergovernmental Panel on Climate Change (IPCC) (ed.) (2023) Climate Change 2022 - Mitigation of Climate Change: Working Group III Contribution to the
Sixth Assessment Report of the Intergovernmental Panel on Climate Change. 1st edn. Cambridge University Press. Available at:https://doi.org/10.1017/9781009157926.
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Box 3 provides worked examples on how an entity (composed of production units producing wheat and maize) could meet the
mitigation Criteria for ‘Aligned’ Certification by aligning with the Climate Bonds 1.5°C transition pathway from 2024, and how
another entity (composed of production units producing only maize) could meet the mitigation Criteria for ‘Transition’Certification by aligning with the Climate Bonds 1.5°C transition pathway by 2030.

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Box 3. Example for how to meet the Agriculture Production Criteria 1.5°C transition pathway for agri-food entities (and their
SLDs).
Applicants for entity Certification should meet the Climate Bonds Standard in addition to the rest of the Criteria
requirements and safeguards explained in Table 8.
For the Climate mitigation requirements:●

Time horizon targets: the climate mitigation performance targets cover the time from the date of Certification to
the date the activity is intended to reach meets the 1.5°C transition pathway emissions, or 2050, whichever issooner.

●Interim climate mitigation performance targets: the climate mitigation performance targets include interim
targets on a three-yearly basis for the nine years following the date of Certification and a five-yearly basis
thereafter over the full-time horizon.

●

Alignment with the Agriculture Production Criteria transition pathway described in Section 4.1.3, where theclimate mitigation performance targets are benchmarked against the transition pathway and align with it by 31
December 2030 at the latest.

Example: Mitigation Compliant ‘Aligned’An entity applying for Certification in 2024 with a mix of maize and wheat production (50% of production volume)with the following climate mitigation performance targets.
Climate Mitigation Performance Targets of the entity’s commodities (maize and wheat)
Year
Average emission intensity (maize)(kgCO2eq/kg dry weight)

Average emission intensity (wheat)(kgCO2eq/kg dry weight)

2024

2027

2030

2033

2038

2043

0.15

0.12

0.12

0.10

0.07

0.07

0.18

0.15

0.15

0.12

0.10

0.10

Compared against the Climate Bonds Agriculture Production (maize) transition pathway:
Agriculture Production Criteria as in Climate Bonds transition pathway – maize and wheat transition
pathways
Year
Average emission intensity (maize)(kgCO2eq/kg dry weight)

Average emission intensity (wheat)(kgCO2eq/kg dry weight)

2024

2027

2030

2033

2038

2043

0.15

0.13

0.12

0.11

0.09

0.07

0.19

0.17

0.15

0.13

0.11

0.10

The entity’s Certification tier is classified as ‘Aligned’ because:●

At the time of Certification, the entity’s average emission intensity for each commodity is equal or lower thanthe Agriculture Production pathway Criteria values; and;●Remains aligned until the end of the Certification time horizon.

An annual verification report from an approved verifier is required to maintain the Certification.

Example: Mitigation compliant ‘Transition’An entity applying for Certification in 2024 with the following climate mitigation performance targets.
Climate Mitigation Performance Targets of the entity
Year
Average emission intensity (maize)(kgCO2eq/kg dry weight)

2024

2027

2030

2033

2038

2043

0.18

0.15

0.12

0.11

0.09

0.07

Compared against the Climate Bonds Agriculture Production (maize) transition pathway:
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Agriculture Production Criteria as in Climate Bonds transition pathway – maize transition pathway
Year
Average emission intensity (maize)(kgCO2eq/kg dry weight)

2024

2027

2030

2033

2038

2043

0.15

0.13

0.12

0.12

0.08

0.06

The entity’s Certification tier is classified as ‘Transition’ because:●

At the time of Certification, the entity’s average emission intensity is higher than the Agriculture Production
pathway Criteria values; but;●

In 2030 the entity is aligned with the transition pathway; and;●Remains aligned until the end of the Certification time horizon.

An annual verification report from an approved verifier is required to maintain the Certification.
Handling cases where a pathway does not exist for a commodity
The data available are limited to 43 commodities. In the case that the entity seeking Certification produces commodities notavailable here, a suitable proxy should be chosen for the pathway e.g., the wheat pathway could proxy for triticale, or the lamb
pathway could proxy for goat. The closest one in terms of production practices and emissions should be chosen, with justificationof the chosen category provided.
Handling co-products
In the case a co-product, economic allocation should be used to apportion environmental impacts to the co-product. For example,
straw might be a co-product of wheat.
Detailed methodology and decisions taken in the process of establishing this pathway can be found in the Agriculture Production
Background Document.

4.1.4 Excel tool for identifying Climate Bonds emission pathways for agri-food commodities in scopein the Agriculture Production Criteria
A Climate Bonds Excel tool is available with the full emission pathway for all 43 commodities covered in the dataset currently,
where entities can find the annual emission target as CO2eq for each given commodity (with disaggregated data by GHG gas for
information). The Criteria requires alignment with the aggregated GHG pathway in CO2eq, and not for each specific gas to allow
flexibility in how emission thresholds are met. However, accounting and pathway of separated GHGs should be reported.

4.1.5 How to account for carbon removals at the entity level
Carbon removals should be accounted for at the entity (farm) level rather than the commodity product level. This is because there
are currently no established protocols for allocating removals to each commodity (e.g., How should sequestration on farmland
restored to forest be allocated to the different products produced on the farm? How should soil carbon sequestration be allocatedto different crops in a rotation?). We apply this rule to all removals.
Carbon removals have their own pathway, and this is based on the hectares of cropland and pasture managed by the entity
multiplied by the required sequestration per hectare of land under a 1.5°C pathway. Currently we use the SBTi FLAG removals
pathway, which requires around 0.4 tonnes of CO2 to be sequestered per hectare of managed cropland and pasture per year. Thissequestration can be delivered through any mechanism, from soil carbon stock increases to setting aside land for forest restoration,
to BECCS.
Carbon removals requirement:
The applicant entity (or entity associated with the debt for SLDs) must be removing 0.4 tonnes of CO2 per hectare per
year to be on the 1.5°C pathway.
At the time of Certification, the entity must specify the quantities sequestered and the future sequestration targets notexceeding the soil carbon saturation levels (for soils) and other removals in the form of trees or another abovegroundbiomass. This can be incorporated into the Excel tool available to support entity (and SLDs) certification.

Carbon accounting must follow guidance from the GHG Protocol Land Sector and Removal Guidance.
Note: we are currently reviewing the SBTi FLAG pathway, and may revise this figure (0.4 tonnes of CO2 per hectare per year).

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4.1.6 Qualitative proxies that can be used as Criteria for entity Certification without meeting
quantitative climate performance targets
Based on current consensus science and to allow an easier certification entry point for those entities engaged already in low
carbon and environmental beneficial practices, a small set of proxies can be used instead of the climate performance targets (i.e.,
meeting the quantitative emission pathway and removals requirement) for a limited time until 2030. 39
Table 11. Proxies that can be used as qualitative Criteria for entity Certification without meeting GHG emission pathway
and/or without full accounting of GHG emissions in the eligible entity (until 2030).
Proxy for Entity Certification

Demonstration of compliance

Organic farming●(certified, plant-based or mixed
production system)

Third party certification for organic agriculture under
IFOAM or equivalent certification scheme.

●

Should apply to 90% of the entity’s production unit(s).

●Not applicable to intensive livestock production
operations and factory farms, following definitions
from EU Industrial Emissions Directive.40●

Entity’s transition plan should include 2030 milestones
and 2050 1.5°C transition plan, plus a commitment to full
GHG accounting by 2030.

●

Following definition from CGIAR HOLPA framework.41●

Should apply to 90% of the entity’s production unit(s).

●Not applicable to intensive livestock production
operations and factory farms, following definitions
from EU Industrial Emissions Directive.42●

Entity’s transition plan should include 2030 milestones
and 2050 1.5°C transition plan, plus a commitment to full
GHG accounting by 2030.

Agroecology principles andpractices (plant-based or mixed
production system) applied in
production unit(s).

39

IPCC 2023. Organic Agriculture> IPCC AR6 Chapter 7, p. 798 Agroecology> IPCC AR6 Chapter 7, p. 798 improved productivity for small-scale producers> IPCC
AR6 Chapter 7, p. 795
40
Pig farms with more than 350 livestock units (LSU) (equivalent to approximately 1100 adult pigs and 700 sows), poultry farms with laying hens with more than
300 LSU and broilers with more than 280 LSU (equivalent to approximately 40000 chickens for meat, and 21400 laying hens). For farms rearing both pigs andpoultry the limit will be 380 LSU. https://www.europarl.europa.eu/news/en/press-room/20240308IPR19007/reducing-pollution-from-industry-and-largelivestock-farms For LSU conversions see: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Livestock_unit_(LSU)
For bovine cattle, the limit will be for farms with more than 150 LSU, as originally proposed by the Commission. https://www.europarl.europa.eu/news/en/pressroom/20231127IPR15436/pollution-deal-with-council-to-reduce-industrial-emissions.
41 https://www.cgiar.org/news-events/news/the-measure-of-agroecology
42
Pig farms with more than 350 livestock units (LSU) (equivalent to approximately 1100 adult pigs and 700 sows), poultry farms with laying hens with more than
300 LSU and broilers with more than 280 LSU (equivalent to approximately 40000 chickens for meat, and 21400 laying hens). For farms rearing both pigs andpoultry the limit will be 380 LSU. https://www.europarl.europa.eu/news/en/press-room/20240308IPR19007/reducing-pollution-from-industry-and-largelivestock-farms For LSU conversions see: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Livestock_unit_(LSU)
For bovine cattle, the limit will be for farms with more than 150 LSU, as originally proposed by the Commission. https://www.europarl.europa.eu/news/en/pressroom/20231127IPR15436/pollution-deal-with-council-to-reduce-industrial-emissions.
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Proxy for Entity Certification

Demonstration of compliance

Improved production systems forvulnerable contexts to increase
productivity and efficiency
sustainably (i.e., for small-scale
producers including investments
for capacity building in climate
mitigation practices).

●

Should apply to 90% of the entity’s production unit(s).

●Not applicable to intensive livestock production
operations and factory farms, following definitions
from EU Industrial Emissions Directive.43●

Entity’s transition plan should include 2030 milestones
and 2050 net zero plan, plus a commitment to full GHG
accounting by 2030.

Vulnerable context defined as meeting these three elements:
1) Located in a low-income country, defined by World Bank
standards, or falls below the World Bank poverty line
based on the average expected annual value of yields
sold from the farm.
2) Agricultural products are used only for domestic
consumption in the country and not exported.
3) The issuer demonstrates that mitigation options werereviewed and provide a justification as to why theconstraints to meeting the requirements could not be
overcome.

4.2 Agriculture Production Criteria for sustainability-linked debt
Certification
Two levels of sustainability-linked debt (SLD) Certification are available, depending on when the climate mitigation performancetargets align with the Climate Bonds Standard Sector Criteria (see the Climate Bonds Standards and Box 1).

43

Pig farms with more than 350 livestock units (LSU) (equivalent to approximately 1100 adult pigs and 700 sows), poultry farms with laying hens with more than
300 LSU and broilers with more than 280 LSU (equivalent to approximately 40000 chickens for meat, and 21400 laying hens). For farms rearing both pigs andpoultry the limit will be 380 LSU. https://www.europarl.europa.eu/news/en/press-room/20240308IPR19007/reducing-pollution-from-industry-and-largelivestock-farms For LSU conversions see: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Livestock_unit_(LSU)
For bovine cattle, the limit will be for farms with more than 150 LSU, as originally proposed by the Commission.
https://www.europarl.europa.eu/news/en/press-room/20231127IPR15436/pollution-deal-with-council-to-reduce-industrial-emissions.
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Table 12. Requirements for sustainability-linked debt (SLD) Certification under two levels: ‘Aligned’ with the 1.5°C pathway for
agriculture production and ‘Transition’ to the 1.5°C pathway for agriculture production.
SLB Tier

SLD Certification Requirements

Tier 1: Aligned

1.

Climate Mitigation Criteria•

At the time of Certification, the entity can demonstrate that its agricultural production land towhich the debt is linked is deforestation- and conversion-free since 2010, see Section 4.1.1., and•At the time of Certification, the average emissions intensity of the agriculture production units towhich the climate mitigation performance targets of the debt are linked meet the sector-specific
Criteria transition pathway, and continue to align thereafter through to 2050, see Section 4.1.2.

●

Removals at entity level: At the time of certification, the entity can demonstrate that its
agricultural production land to which the debt is linked meets the quantity of Carbon
sequestration required to aligned with the pathway at the entity level, see Section 4.1.5.

2.

Adaptation and Resilience safeguard●

The Certified entity meets the Adaptation and Resilience safeguard described in Section 5.1,
which is reassessed and reconfirmed every five years.

3.

Environmental and social safeguards●

Biodiversity (Section 5.2),●

Water (Section 0),●

Social (Section 0),●

Animal welfare (if applicable: only for livestock production units) (Section 5.5).

Tier 2:
Transition

The criteria are the same as for Level 1, except:•

At the time of Certification, the entity can demonstrate that its agricultural production land towhich the debt is linked is deforestation- and conversion-free since 2020, see Section 4.1.1., and•At the time of Certification, the average emissions intensity of the agriculture production units towhich the climate mitigation performance targets of the debt are linked do not meet the sectorspecific Criteria transition pathway, but its future climate mitigation performance targets align by
30 December 2030 and continue to align thereafter through to 2050 (see Section 4.1.1).

5 Safeguards
After assessing the requirements on climate Criteria (either on climate mitigation or adaptation for assets and UoP (Section 3) oron transition pathways for entities and SLDs (Section 4), eligible projects will need to check alignment with a set of safeguards on
key indicators for environmental and social impacts:
1.

Adaptation and resilience (Section 5.1).

2.

Biodiversity (Section 0).

3.

Water (Section 5.3).

4.

Social aspects (Section 5.4).

5.

Animal welfare (if applicable, Section 5.5).

These safeguards aim to ensure eligible activities do not only benefit climate mitigation or adaptation, but also avoid risks ofimpacting on other key environmental and social aspects.
Particularly, these safeguards ensure:a) eligible projects minimise the risks of harming other aspects of sustainability beyond climate, andb) eligible projects minimise the risks of harming the wider system into which they operate.

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These safeguards work as a lighter set of requirements compared to climate performance criteria but nevertheless are requirementsfor obtaining certification as green or climate-aligned projects.
Safeguards follow a common methodology for identifying and minimising risks of negative impacts (except for animal welfare). Thatis, a 4 steps-process requirement adapted to each of these key issues:44
1.

Understanding and identifying the context: setting boundaries and interdependencies.

2.

Identifying specific risks on the given environmental or social aspect.

3.

Addressing and mitigating specific risks by undertaking risk-measures and adopting management plans aiming at;

4.

a.

minimising direct risks from eligible projects, andb.

minimising the risks of harming the defined system they operate within.

Undertaking of regular monitoring and (re)evaluation of the specific performance, adjusting to risk reduction measuresover time as needed.

It is important to highlight these safeguards are not intend as a template for best practice but rather to provide a starting point for
Certification applicants to take steps to assess and avoid unintended negative impacts of their projects and activities.
The animal welfare safeguard only applies to activities and/or production units with livestock production, and it does not follow the
4 step methodology (see Section 5.5).

5.1 Adaptation and Resilience safeguard
The aim of the Adaptation and Resilience safeguard is to ensure that the applicant production unit(s) and/or eligible activities areresilient and adapted to climate and can continue to produce agricultural commodities under future climate scenarios.
Climate Bonds proposes the following definition for Resilience: ‘the capacity of economic, social or ecological assets or systems toresist, absorb, accommodate, adapt to, transform, and recover from the current and projected impacts of climate change, both
direct and indirect, maintaining their basic structure and function’.
The Adaptation and Resilience (A&R) safeguard component of the eligibility Criteria will be fitted at the appropriate boundary to
any applicant and financial tool, including assets, UoP, entities, and SLDs.
To demonstrate compliance, the applicant must hold a risk assessment they have undergone or will undergo including theidentified, planned, and implemented measures to manage and mitigate climate risks within the relevant production unit(s).
Details on the specific steps and demonstration of compliance are given in Table 12.

44

The 4-step process for risk assessment methodology is based on the Climate Bonds Resilience Principles and is adjusted to the other key environmental andsocial aspects required as safeguards. https://www.climatebonds.net/files/page/files/climate-resilience-principles-climate-bonds-initiative-20190917-.pdf
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Table 13. Adaptation and Resilience safeguard: requirements and demonstration of compliance for any type of issuer.

1.

Steps for A&R Safeguard

Demonstration of compliance

Identify boundaries andinterdependencies.

The applicant must define the boundaries of theinvestment and associated assets and activities, as well as
the internal and external interdependencies between the
broader system affected by those assets and activities.
These boundaries and interdependencies are important for
scoping risks and benefits assessments, and ensuring theasset or activity being invested in is fit-for-purpose anddoes no harm to the system of which it is part.
See checklist in Appendix 1.

2.

Assessment of the physical climate
hazards.

The applicant must demonstrate that a risk assessment has
been undertaken of the physical climate hazards to which
the production unit(s) will be exposed and vulnerable overits operating life (applicable at the appropriate boundary to
any applicant and financial tool, including assets, UoP,
entities and SLBs).
The applicant must follow best-practice standards orsimilar schemes to carry on the risk assessments, where
the applicant can demonstrate the standard has sufficientrequirements and thus is robust.
See checklist in Appendix 1.

3.

Measures taken to:a)Address and mitigate
hazards.

The applicant must also demonstrate that measures have or
will be taken to:i.

address and mitigate those identified physicalclimate hazards to a level so that the production
unit is ‘fit for purpose’ in the face of coming
climate change over its operational life; andii.

to ensure that the production unit does no harmto the resilience of the defined system it operates
within, considering the boundaries and criticalinterdependencies between that system and the
production unit.

b) Ensure no harm to theresilience of system.

See checklist in Appendix 1.
4.

Ongoing monitoring and evaluation
to adjust measures as necessary.

The applicant is required to demonstrate that there will be
ongoing monitoring and evaluation of the relevance of therisks and resilience measures and related projectadjustments as needed.
See checklist in Appendix 1.

The checklist (Appendix 1) is a tool to verify that the issuer has implemented sufficient processes and plans in the design, planningand implementation phases of a project to ensure that the operation minimises risks. Additionally, that the project is appropriately
adaptive and resilient to climate change, and supports the adaptation and resilience of other stakeholders in the environment.
All elements of the checklist must be addressed, and appropriate evidence provided that these requirements are being met or are
not applicable in respect of the specific assets and projects linked to the financial instrument. It is expected that their evidence willencompass a range of assessment and impact reports and associated data, including but not limited to those reports required tomeet national and local licensing and approval processes. Appendix 2 includes detailed guidance for following the A&R Checklist.

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5.2 Biodiversity safeguardThis biodiversity safeguard aims to ensure no significant harm on habitats and species diversity within the production unit(s) andinto the wider landscape (system in which the eligible activities operate).
As with the other safeguards, the requirement is based on a 4-step-process of risk assessment and measures to minimise or mitigate
those risks.
Table 14. Biodiversity Safeguard: requirements and demonstration of compliance for any type of issuer.

1.

Steps for Biodiversity Safeguard

Demonstration of compliance

Identify boundaries andinterdependencies with regards tobiodiversity risks.

The applicant must define the boundaries of theinvestment and associated assets and activities, as well as
the internal and external interdependencies between the
broader system affected by those assets and activities.
These boundaries and interdependencies are important for
scoping risks and benefits assessments, and ensuring theasset or activity being invested in is fit-for-purpose anddoes no harm to the system of which it is part.

2.

Assessment of the risks on
biodiversity.

The applicant must demonstrate that a biodiversity risk
assessment has been undertaken on the potential impacts
from the production unit(s) over its operating life
(applicable at the appropriate boundary to any applicant
and financial tool, including assets, UoP, entities and SLBs).
The applicant must follow best-practice standards orsimilar schemes to carry on the risk assessments, where
the applicant can demonstrate the standard has sufficientrequirements and thus is robust.

3.

Measures taken:a)Address and mitigate risks
on biodiversity.

b) Ensure no harm tobiodiversity at the system(landscape level).

4.

Ongoing monitoring and evaluation
to adjust measures as necessary.

The applicant must also demonstrate that measures have or
will be taken to:i.

address and mitigate those identified biodiversity
risks to a level so that the production unit is ‘fit for
purpose’ over its operational life; andii.

to ensure that the production unit does no harm
the biodiversity of the defined system it operates
within, considering the boundaries and criticalinterdependencies between that system and the
production unit.

The applicant is required to demonstrate that there will be
ongoing monitoring and evaluation of the relevance of thebiodiversity risks and measures, and related projectadjustments as needed.

These biodiversity critical interdependencies at a minimum, should be considered in terms of the production unit(s) and/or eligible
activities to potentially ‘do harm’ to the system it operates within:45
1.

Introduction of pests and diseases.

2.

Reduction in pollinating insects and birds.

3.

Reduction in biodiversity of critical habitat(s).46

45

This list is non-exhaustive and for certain geographies the importance of specific interdependencies may differ, therefore some flexibility can be applied in the
structure of the consideration evidence being given.
46
Critical habitats as defined in IFC PS6 (2012), Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources |International Finance Corporation (IFC) , p. 4.
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4.

Consideration of relationship of operations with potential extinction risk for endangered species.

5.

Overuse of inputs.

6.

Use of chemicals listed in the Stockholm Convention,47 or (1a) or (1b) in the WHO classification of pesticides by hazard,48
or not in compliance with the Rotterdam Convention,49 is not allowed in eligible activities or projects.

Assessment and measures: Issuers can utilise existing market guidance such as the Science-based Targets for Nature (SBTN) andTaskforce for nature-related financial disclosures (TNFD) and/or IFC Performance Standard 6 for steps and metrics on how to apply
steps 2 (risks) and 3 (measures) of this biodiversity safeguard.

The following sources are recommended by Climate Bonds as credible and effective sources for meeting the biodiversity safeguard.
The sources can provide guidance in doing no significant harm for biodiversity and highlighting potential measures which could beundertaken by agriculture producers to be beneficial in providing potential biodiversity gains. It should be noted that the list is nonexhaustive, and it may be that there is equally appropriate biodiversity guidance that could be leveraged by those in crop andlivestock production which should be cited in submissions.
TNFD Draft Food and Agriculture Sector Guidance (2023)50 provides comprehensive guidance on metrics and approaches that canbe incorporated into corporate strategy and disclosures. The key components of the guidance includes:●

how agri-food business activities are related to impacts on biodiversity,51●

guidance and resources to identify interdependencies, risks and opportunities related to biodiversity and agricultural
production processes,52,53●

potential agri-food sector responses for biodiversity-focused measures and disclosure metrics for evidence of progressagainst stated actions over time.54

Examples of risks and responses focused on biodiversity from TNFD are summarised in Table 15.
Table 15. Example of common identified risks to biodiversity and potential response options (Source: Climate Bonds own
elaboration based on TNFD analysis (2023).
Risk to biodiversity

Biodiversity measure / response option (as in TNFD, 2023)

Nitrogen and phosphorus surpluses●

Create a soil management plan that identifies main threats to soil health,describes soil management practices used and outlines an approach to
input optimisation, including the use of fertilisers. GRI 13 (2022).

●

Establish a plan with time-bound targets to reduce excess fertiliser useintensity per fertiliser nutrient type (N, P2O5, K2O) with an open
methodology for the specific production system. FAO (2021); related to
GBF target 7.

●

Invest in precision technologies to increase nutrient use-efficiency anddecrease runoff and eutrophication, as well as technologies for nutrient
recycling and organic fertilisers. TNFD.

●

Invest in pesticide efficiency technologies and environmentally friendly
pest control. FAO (2021).

●

Develop and adhere to an integrated pest management plan, in line withbest practices from the International Code of Conduct on Pesticide
Management, to prevent, mitigate and remediate negative impacts
associated with the use of hazardous pesticides and excess pesticide use.
FAO (2021).

Pesticide55

47

UNEP, (2019) Stockholm Convention http://www.pops.int/

48

WHO, (2019), The WHO Recommended Classification of Pesticides by Hazard and guidelines to classification, 2019 edition

49

Rotterdam Convention, (2019), Text of the Convention (pic.int)

50

TNFD (2023) Draft sector guidance - Food and agriculture – TNFD

51

TNFD, (2023), Draft sector guidance - Food and agriculture – TNFD p. 17-21.

52

Ibid., p. 23-33.

53

Ibid., p. 36-39.

54

Ibdi., p. 46-57. Annex 1.

55

Organisations can use pesticide sales numbers per crop type to create an initial estimate until location-specific data are available (TNFD 2023).

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Risk to biodiversity

Biodiversity measure / response option (as in TNFD, 2023)(including risk on pollination
services56 for the production unit(s))
Plastic leakage●

Invest in plastic recycling technologies and infrastructure and plastic
reuse solutions.

Air pollution●

Create a plan with time-bound targets to reduce non-GHG emissions toair, including NOx, SOx, NH3 and NMVOCs. GRI 13 (2021).

On-farm nature management●

Invest in rewilding initiatives, such as natural vegetation in cropped
landscapes, rewilding, flower strips and tree cover on crop land. TNFD.

●

Make investments in breed and crops at risk of extinction, indigenous
crops and in an increased number of crop varieties (genetic varieties),
related to GBF Goal A.

●

Implement strategies to manage the use of genetically modified
organisms (GMOs). SASB: Agricultural Products Standard (2018).

Other examples of relevant guidance for demonstration of compliance with the biodiversity safeguard, including SBTN (2023), UNEP
(2023) and IFC (2012) can be found in Appendix 3.

5.3 Water safeguard
The water safeguard aims to ensure no significant negative effect on water use and quality derives from the eligible activities within
the production unit(s) and/or into the wider landscape (system in which the eligible activities operate).
As with the other safeguards, the requirement is based on a 4-steps process of risks assessment and measures to minimise or
mitigate those risks. Specific requirements are presented in Table 15.

56

Organisations can use pollination dependency ratings for crop categories to classify procured or produced crops into groups of those with a moderate, high oressential dependence on pollinators (see Annex 3). Thereafter, organisations can estimate the size of the dependency by the quantity of the crops procured.
.(TNFD 2023).
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Table 16. Water safeguard: requirements and demonstration of compliance for any type of issuer.

1.

Steps for Water safeguard

Demonstration of compliance

Identify boundaries andinterdependencies with regards towater use and water quality risks.

The applicant must define the boundaries of theinvestment and associated assets and activities, as well as
the internal and external interdependencies between the
broader system affected by those assets and activities.
These boundaries and interdependencies are important for
scoping risks and benefits assessments, and ensuring theasset or activity being invested in is fit-for-purpose anddoes no harm to the system of which it is part.

2.

Assessment of the risks on water

The applicant must demonstrate that a risk assessment onwater use and water quality has been undertaken on thepotential impacts from the production unit(s) over its
operating life (applicable at the appropriate boundary to
any applicant and financial tool, including assets, UoP,
entities, and SLBs).
The applicant must follow best-practice standards orsimilar schemes to carry on the risk assessments, where
the applicant can demonstrate the standard has sufficientrequirements and thus is robust.

3.

Measures taken:a)Address and mitigate risks
on water use and quality.

b) Ensure no harm to water
availability and water quality
at the system (landscapelevel).

The applicant must also demonstrate that measures have or
will be taken to:i.

address and mitigate identified water risks to alevel so that the production unit is ‘fit for purpose’over its operational life; andii.

ensure that the production unit does no harm to
the water availability and water quality of thedefined system it operates within, considering theboundaries and critical interdependencies
between that system and the production unit.

A water management plan must demonstrate risks are
addressed and mitigated. This plan must include qualitativeor quantitative evidence that gives a description of existingor planned steps taken to ensure risks andinterdependencies are addressed.
4.

Ongoing monitoring and evaluation
to adjust measures as necessary.

The applicant is required to demonstrate that there will be
ongoing monitoring and evaluation of the relevance of thewater-related risks and measures and related projectadjustments as needed, within a water management plan.
For entities and SLD Certification, annual verifications needto demonstrate that the water-related risks are being
monitored and where appropriate acted upon.

Water use and water quality critical interdependencies, at a minimum, should be considered in terms of the production unit(s)and/or eligible activities to potentially ‘do harm’ to the system it operates within:57
1.

The effects of water use or pollution on other water users or erosion in the watershed.

2.

Relationships of the production unit(s) eligible activities to nearby flood zones.

57

This list is non-exhaustive and for certain geographies the importance of specific interdependencies may differ, therefore some flexibility can be applied in the
structure of the consideration evidence being given.
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3.

Increased risk of flooding in the production unit(s) or wider landscape.

4.

Water-related risks to be considered:a.

Precipitation; High precipitation, intense rainfall events, waterlogging, flood, drought, freezing rain (hail, ice).

b.

Water stress; Crop water stress (reflecting combination of temperature, precipitation, and wind), ratio of water
withdrawals to availability.

c.

Sea-level; Inundation, flooding or storm surges, salinisation due to saltwater intrusion or changing water regimes.

d.

Glacial melting and lake outbursts; flood, body of water contained by glacier overflows or glacial melts.

For guidance, issuers can follow the recommendations provided by TNFD (2023) regarding freshwater use in their eligible activities.
‘Organisations can use the list of crops with a high freshwater dependency identified in E2 and overlay detailed location data on thecatchment area of each crop category, using spatial maps of current levels of water stress to estimate the size of the dependency.
Organisations can use data sources such as the open source Aqueduct Food Platform to access water stress spatial maps and waterrisk scores per crop per catchment area’.58
These interdependences and risks should be considered and assessed to produce a water management plan (including internal
strategy, policy and/or objectives) with clear steps taken to ensure negative impacts are minimised, and risks mitigated withappropriate sustainable measures.
Existing market guidance should be used, such as the Science-based Targets for Nature (SBTN) and Taskforce for nature-related
financial disclosures (TNFD) for steps and metrics on how to consider such water-related issues.

5.4 Social safeguard
The social safeguard aims to ensure no significant negative effect on livelihoods and human wellbeing derives from the eligible
activities within the production unit(s) and/or into the wider landscape (system in which the eligible activities operate).
The social safeguard requires that issuers meet three minimum pre-conditions for all eligible Certifications (detailed list andrequirements are given in Table 16):
1.

formally adhere international labour conventions

2.

provide an annual statement on steps taken to ensure no modern slavery, child labour or human trafficking has occurred
through the business activities, and3.

where appropriate follow guidance with respect to indigenous peoples and local communities´ rights.

As with the other safeguards, there are additional requirements based on a 4-steps process of risk assessments and measures tominimise or mitigate those risks, with specific requirements are presented in Table 17.
Table 17. Minimum social safeguards preconditions that should be demonstrated for any Certification of eligible activities.

58 TNFD (2023) Taskforce on Nature-related Financial Disclosures. Additional Sector Guidance Food and Agriculture to TNFD’s Guidance on assessment of nature-

related issues— the LEAP approach. Available at: https://tnfd.global/
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Preconditions on
Social SafeguardInternational Labour
conventions that need
to be adhered to andformally recognised

Details / Reference

1.

ILO Declaration on theFundamental Principles
and Rights at Work andSocial Policy; and the ILO
Tripartite.

Fundamental principles and rights at work:59

2.

3.

International
labourconventions.

Ensure nomodern slavery,
child labour or
humantrafficking.

UN Guiding Principles on
Business and Human
RightsRespect toindigenous
peoples and local
community
rights.

Free, prior and informed
consent (FPIC)●

freedom of association and the effective recognition of theright to collective bargaining,●

the elimination of all forms of forced or compulsory labour,●

the effective abolition of child labour, and●the elimination of discrimination in respect of employment
and occupation.

Business & Human Rights Resource Centre. (2019). UN Guiding
Principles. www.business-humanrights.org/en/un-guidingprinciples
Provide a slavery and human trafficking statement with steps
taken to ensure modern slavery is not taking place.60
AFi best practice in securing the free, prior, and informed consent(FPIC) of indigenous peoples and local communities.61
IFC Performance Standard 7 on Indigenous peoples.62
The applicant is required to ensure no violation of land, cultural,and natural resource rights of indigenous peoples and local
communities (IPLCs).

59

https://www.ilo.org/global/standards/introduction-to-international-labour-standards/conventions-and-recommendations/lang--en/index.htm

60

As example of guidance, the UK Modern Slavery Pact can be used: HM Government, (2015), Modern Slavery Act 2015 (legislation.gov.uk)

61

Accountability Framework Initiative. Operational Guidance: Free Prior and Informed Consent (2020)

62

IFC Performance Standard 7 (2012), Performance Standard 7: Indigenous Peoples | International Finance Corporation (IFC)

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Table 18. Social safeguard: requirements and demonstration of compliance for any type of issuer.

1.

Steps for Social Safeguard

Demonstration of compliance

Identify boundaries andinterdependencies with regards
to social risks (people´slivelihoods).

The applicant must define the boundaries of the investment andassociated assets and activities, as well as the internal and externalinterdependencies between the broader system affected by thoseassets and activities.
These boundaries and interdependencies are important for scoping
risks and benefits assessments, and ensuring the asset or activity being
invested in is fit-for-purpose and does no harm to the system of which
it is part.
With regards to social aspects, including, but not limited to: modern
slavery statement, labour standards, indigenous peoples and local
community rights, human rights, and livelihoods.

2.

Assessment of the risks onsocial aspects.

The applicant must demonstrate that a risk assessment on social
aspects has been undertaken on the potential impacts from theproduction unit(s) over its operating life (applicable at the appropriate
boundary to any applicant and financial tool, including assets, UoP,
entities and SLBs).
The applicant must follow best-practice standards or similar schemes tocarry on the risk assessments, where the applicant can demonstrate thestandard has sufficient requirements and thus is robust.

3.

Measures taken to:a)Address and mitigate
risks on social aspects.

b) Ensure no harm tosocial aspects at thesystem (landscapelevel).

4.

Ongoing monitoring andevaluation to adjust measures
as necessary.

The applicant must also demonstrate that measures have or will be taken
to:i.

address and mitigate identified social risks to a level so thatthe production unit is ‘fit for purpose’ over its operational life;
and

ii.

ensure that the production unit does no harm to the social
aspects / people´s livelihoods of the defined system it operates
within, considering the boundaries and criticalinterdependencies between that system and the production
unit(s).

The applicant is required to demonstrate that there will be ongoing
monitoring and evaluation of the relevance of the water-related risks andmeasures and related project adjustments as needed, within a water
management plan.
For entities and SLD certification, annual verifications need todemonstrate that the social risks are being monitored and whereappropriate acted upon.

For entity transition plans and SLDs: they are required to demonstrate given social policies and/or qualitative evidence ofinclusion of social aspects into business transition plans in addition to environmental targets . The social aspect included in thetransition plan must include commitments and an enabling environment to, at a minimum, aim at these goals:-

Integrate human rights and labour standards (including the list above).

-

Address social risks and opportunities.

-

Ensure meaningful participation and partnership.

-

Promote gender equality.

Demonstration of compliance for entity and SLD certification should be in the form of qualitative or quantitative evidence that
ensure that these social considerations are integrated in the development of the business transition strategy, with sufficientreporting and assessment of performance over time.
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Additional resources on guidance to meet the social safeguard is given in Appendix 4.

5.5 Animal welfare safeguard
Issuers are required to obtain certification to schemes that require sufficient high standards of animal welfare. The following
schemes have been selected as suitable for this purpose:●

Humane Farm Animal Care Certified Humane https://certifiedhumane.org●

RSPCA Assured www.rspcaassured.org.uk/farm-animal-welfare/rspca-welfare-standards●

Animal Welfare Approved by A Greener World https://agreenerworld.org/certifications/animal-welfareapproved●

Beter Leven levels 2&3 https://beterleven.dierenbescherming.nl●

G.A.P levels 4&5 https://globalanimalpartnership.org

If the issuer demonstrates that none of these schemes certify in the country where the operations are located, then assessment
should be undertaken using the requirements (principles and the relevant species-specific mitigation criteria) detailed in the FARMS
Initiative Responsible Minimum Standards (RMS), except those criteria relating to transportation and slaughter as these are out of
the scope of these agriculture criteria. These are available at farmsinitiative.org.
There is no burden of proof required for extensive agricultural systems to demonstrate animal welfare standards as this is not
the area where animal welfare issues are typically observed. However, it is expected that welfare standards would still apply e.g.,
no dehorning.

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6 Definitions
Adaptation and Resilience Criteria: Rules or principles for evaluating and preventing physical climate risk, as well as assessing
and reducing the vulnerability of an asset or entities to the effects of climate changes. These rules generally guarantee thatthe activities do not do any significant harm to other assets within their system boundaries covering the area affected by theactivity.
Applicant: The term or name for any potential bond issuer, or non-financial corporate entity that might seek Certification underthe Agriculture Production Criteria.
Certified entity: The entity or part thereof which is being certified under the Climate Bonds Standard. Currently, entity
Certification is limited to non-financial entities or segregated segments thereof, for which the Climate Bonds has Climate
Bonds Standard Sector Criteria for entity Certification.
Climate Bond Certification: allows the applicant to use the Climate Bond Certification mark in relation to that bond. Climate Bond
Certification is provided once the independent CBSB is satisfied the bond complies with the CBS.
Climate Bonds Initiative (Climate Bonds): An investor-focused not-for-profit organisation, promoting large-scale investmentsthat will deliver a global low-carbon and climate resilient economy. Climate Bonds seeks to develop mechanisms to betteralign the interests of investors, industry, and government to catalyse investments at a speed and scale sufficient to avoid
dangerous climate change.
Climate Bonds Standard (CBS): A screening tool for investors and governments that allows them to identify green bonds, theproceeds of which are being used to deliver climate change solutions. This may be through climate mitigation impact and/or
climate adaptation or resilience. The CBS is made up of two parts: the parent standard (CBS v4.2) and a suite of sectorspecific eligibility Criteria. The parent standard covers the Certification process and pre-and post-issuance requirements for
all Certified bonds, regardless of the nature of the capital projects. The Sector Criteria detail specific requirements for assets
identified as falling under that specific sector. The latest version of the CBS is published on the Climate Bonds website.
Climate Bonds Standard Board (CBSB): A board of independent members that collectively represents $34 trillion of assets undermanagement. The CBSB is responsible for authorising (i) revisions to the CBS, including the adoption of additional Sector
Criteria; (ii) approved verifiers; and (iii) applications for Certification of a bond under the CBS. The CBSB is constituted,
appointed, and supported in line with the governance arrangements and processes as published on the Climate Bonds
website.
Climate change: A change in global or regional climate patterns attributed to the increased levels of CO2 in the atmosphere,
produced mainly by the combustion of fossil fuels.
Climate goals: Objectives that aim to reduce GHG emissions to limit the global temperature increase to 1.5°C above pre-industrial
levels.
Climate mitigation performance targets: The performance targets that define the measurable climate mitigation performance tobe achieved.
Climate adaptation and resilience: Measures or assessments related to protecting communities or ecosystems from the effects
of climate change. Adaptation refers to protection, while resilience is the ability to adapt and recover from the impacts ofclimate change.
Climate targets: Limits established by scientists and policymakers in plans to combat climate change.
CO2 equivalent: A unit to measure the effect of all greenhouse gases according to their global warming potential that expresses
the warming effect of each greenhouse gas over a set period of time (usually 100 years) in comparison to CO2. Thus, anamount of a GHG can be expressed by the quantity of CO2 that will have the equivalent warming effect over 100 years.
Critical interdependencies: The asset or activity’s boundaries and interdependencies with surrounding infrastructure systems.
Interdependencies are specific to local context but are often connected to wider systems through complex relationships that
depend on factors ‘outside the asset fence’ that could cause cascading failures or contribute to collateral system benefits.
Decarbonisation pathways: Transformation processes, strategies, or indications to be implemented in the energy sector aiming
to reduce emissions and the use of fossil fuels. They involve measures such as shifting the energy mix, increasing energy
efficiency, utilising the circular economy, or managing demand for energy.
Decarbonise: Move away from energy systems that produce carbon dioxide and other greenhouse gas emissions and remove theamount of carbon gaseous compounds in the atmosphere.
Emerging economies: All other countries not included in the advanced economies regional grouping.

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Emission intensity: Volume of emissions per unit of a representative factor in the assessed sector, which in the agriculture
production sector is kg of production or equivalent functional unit, so the emissions intensity is the grams of CO2 eq per kg offood generated: gCO2/kg.
Emissions target: Limits that scientists set for the quantity of emissions to be aligned with the Paris Climate Agreement.
Green bond: A bond where the proceeds are allocated to environmental projects or expenditures. The term generally refers tobonds that have been marketed as green. In theory, green bonds proceeds could be used for a wide variety of environmental
projects or expenditures, but in practice they have generally been earmarked for climate change projects.
Industry Working Group (IWG): A group of key organisations that are potential applicants, verifiers and investors convened by
Climate Bonds. The IWG provides feedback on the draft Sector Criteria developed by the Technical Working Group (TWG)
before they are released for public consultation.
Investment period: The interval between the bond’s issuance and its maturity date; otherwise known as the bond tenor.
IPCC: The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related toclimate change.
Life-cycle emissions analysis: A methodology for assessing or accounting for environmental emissions associated with all thestages of the life cycle of a product or process, from the initial design phase to disposal or recycling.
Low-carbon technologies: Technologies referred to as innovative technical solutions that are characterised by a low-emission
intensity, compared to state-of-the-art alternatives. Considered best-in-class technologies with a focus on environmental
impact, examples of electricity utility low-carbon technologies would be solar, wind, marine, bioenergy, hydropower,
geothermal, and nuclear.
Mitigation Criteria: Rules and principles containing thresholds, benchmarks, and milestones for sector activities whose objectiveis the reduction of the harmful effects of greenhouse gases emissions.
Mitigation technologies: Actions within technological processes implemented to reduce and curb greenhouse gas emissions.
Negative emissions: Processes in which more CO2 is removed and stored from the atmosphere than added to it, so the final GHG
emissions balance is negative. It can be achieved by natural processes or a variety of technological solutions. Negativeemissions are necessary to meet the Paris Agreement.
Net-zero emissions scenario (NZE): A science-based scenario designed to show what is needed across the main sectors by
various actors, and by when, for the world to achieve net-zero energy-related and industrial process CO2 emissions by 2050.
It also aims to minimise methane emissions for the energy sector.
Net-zero emissions: A situation where global greenhouse gas emissions from human activity are in balance with emissions
reductions. To achieve this situation, human-caused emissions should be reduced as close to zero as possible.
Net-zero targets: Global policy instruments for international GHG reductions to achieve net-zero emissions.
Offsetting: A climate action that enables organisations to compensate for the emissions they put into the atmosphere, by
supporting projects that reduce emissions in other regions of the world.
Parent company/group: A company is considered a parent company of another entity (a subsidiary) if it exercises control overthe subsidiary. The terms control and subsidiary have the meaning assigned to them under International Financial ReportingStandard 10 (IFRS 10). A parent group consists of the parent company and all the companies that the parent company
exercises control over. Where the applicant does not belong to a group of companies, the term parent company applies tothe applicant.
Paris Agreement: A legally binding international treaty on climate change adopted by 196 parties. Its overarching goal is to holdthe increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit thetemperature increase to 1.5°C above pre-industrial levels.
Pathways: Science-based trajectories for different sectors indicating the way to achieve targets related to relevant indicators.
Scenarios: Science-based plausible descriptions of how the future may unfold based on several assumptions (economic, social,
behavioural, technological), which generally form part of a set of alternative pathways. Examples are the IEA net-zeroemissions scenario and the NDC scenario.
Scope of emissions: Scope 1, 2 and 3 are terms devised by the GHG Protocol to categorise the different sources of carbon
emissions an organisation creates in its own operations, and in its wider value chain.
Standards Criteria: Established principles to evaluate processes, assets, or entities aiming to achieve benchmarks, targets, orgoals.

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Sustainability-linked debt (SLD): Any debt instrument for which the financial and structural characteristics can vary depending onwhether the issuer achieves predefined sustainability/ESG objectives. Such objectives are measured through predefined key
performance indicators (KPIs) and assessed against predefined performance targets. Proceeds of SLD are intended to be
used for general purposes.
Technical Working Group (TWG): A group of recognised experts from academia, international agencies, industry, and NGOs
convened by Climate Bonds. The TWG develops the Sector Criteria, which are detailed technical criteria for the eligibility of
projects and assets as well as guidance on the tracking of eligibility status during the term of the bond. Their draft
recommendations are refined through engagement with finance industry experts in convened Industry Working Groups(IWG) and through public consultation. Final approval of Sector Criteria is given by the CBSB.
Transition targets: Thresholds, benchmarks, and milestones based on key assumptions and dependencies used by scientists andpolicymakers to develop a plan to achieve climate targets.

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7 Acronyms
CAPEX Capital expenditures
CBS

Climate Bonds Standard

CBSB

Climate Bonds Standard Board

CO2

Carbon dioxide

EU

European Union

GHG

Greenhouse gases

IFC

International Finance Corporation

IPPCIntergovernmental Panel on Climate Change

IWG

Industry Working GroupKPI

Key performance indicator

LCA

Life Cycle Assessment

RTRS

Round Table of Responsible Soy Association

SBTi

Science Based Targets initiative

SLB

Sustainability-linked bond

SLD

Sustainability-linked debt

TWG

Technical Working GroupUoP

Use of Proceeds

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8 Bibliography
Climate Bonds Agriculture Production Criteria, 2021. Available at: Agriculture Criteria | Climate Bonds Initiative.
EU Taxonomy Report, 2020. Technical Annex. Updated methodology & Updated Technical Screening Criteria. Available at:Technical annex to the TEG final report on the EU taxonomy (europa.eu).
IPCC, (2019). Summary for Policymakers. In: Climate Change and Land: an IPCC special report on climate change, desertification,
land degradation, sustainable land management, food security, and greenhouse gas fluxes in terrestrial ecosystems [P.R. Shukla, J.
Skea, E. Calvo Buendia, V. Masson-Delmotte, H.- O. Pörtner, D. C. Roberts, P. Zhai, R. Slade, S. Connors, R. van Diemen, M. Ferrat,
E. Haughey, S. Luz, S. Neogi, M. Pathak, J. Petzold, J. Portugal Pereira, P. Vyas, E. Huntley, K. Kissick, M. Belkacemi, J. Malley,(eds.)].
IPCC, (2023). Climate Change 2022 - Mitigation of Climate Change: Working Group III Contribution to the Sixth Assessment Reportof the Intergovernmental Panel on Climate Change. 1st edn. Cambridge University Press. Available at:https://doi.org/10.1017/9781009157926.
Poore, J. and Nemecek, T. (2018). Reducing food’s environmental impacts through producers and consumers, Science, 360 (6392),
pp. 987–992. Available at: https://doi.org/10.1126/science.aaq0216.
Roe, Stephanie, Charlotte Streck, Robert Beach, Jonah Busch, Melissa Chapman, Vassilis Daioglou, Andre Deppermann, et al. 2021.
‘Land-Based Measures to Mitigate Climate Change: Potential and Feasibility by Country’. Global Change Biology 27 (23): 6025–58.
https://doi.org/10.1111/gcb.15873.

Appendix

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Appendix 1: Adaptation and Resilience checklist for relevant
production unit(s)This Adaptation and Resilience (A&R) checklist applies to the applicant of either assets, UoPs, entities and SLDs, which previously
would need to define the boundary of its production unit(s) linked to the given financial instruments. For entities and SLDs, this isrequired for the entire production unit(s). (This checklist is adapted from Climate Bonds Agriculture Production Criteria, 2021.)
Adaptation and Resilience checklist for relevant Agricultural Production Unit(s)1. Clear boundaries and critical interdependencies between the agricultural production unit(s) and the system they operate within are
identified.
1.1

Boundaries of the production unit(s) are defined using (1) a listing of all farm holdings and associated assets
and activities associated with the use of the asset, bond proceeds or entity/SLB (as appropriate), (2) a map of
their location, and (3) identification of the expected operational life of the activity, asset, proceeds, or
entity/SLB.

1.2

Critical interdependencies between the production unit(s) and the system within they operate are identified.
Identification of these interdependencies should consider the potential for adverse impacts arising from theitems in Item 1 in Appendix 2.

2. An assessment has been undertaken to identify the key physical climate hazards to which the production unit(s) will be exposed andvulnerable over their operating life.
2.1

Key physical climate risks and indicators of these risks are identified in line with the following guidelines:●

Risks are identified based on (a) a range of climate hazards, and (b) information about risks in the current
local context, including reference to any previously identified relevant hazard zones, e.g., flood zones.
(Item 2 in Appendix 2)●

A full list of potential physical climate risks that may be considered is given in Item 3 of Appendix 2.

●

At a minimum, risks in each of the categories in Item 2 of Appendix 2 must be considered.

3. The measures that have been or will be taken to address those risks mitigate them to a level so that the production unit(s) is able to managechanging climatic conditions over their operational life.
3.1

Risk reduction measures are implemented for all key risks to the production unit(s). These should enable theproduction unit(s) to meet an average annual productivity threshold under a range of expected climate hazards
for the duration of the investment period. The minimum productivity threshold is determined by the averagelevel of yield loss, compared to average production over five years, for at least three comparable holdings withfive years or more of production. Where comparable holdings are not available, the minimum productivity
threshold will be calculated as 10% less than the mean annual productivity over five previous years where no
extreme climate events occurred (Item 4 in Appendix 2).

3.2

Risk reduction measures must be tolerant to a range of climate hazards and not lock-in conditions that could
result in maladaptation.

4. The measures that have been or will be taken do no harm to the resilience of the defined system they operate within, as indicated by theboundaries of and critical interdependencies with that system as identified in Item 1 in this checklist.
4.1

An assessment is conducted to demonstrate that the production unit(s) do not pose significant risk of harm toothers’ natural, social, or financial assets according to the principle of best available evidence during theinvestment period considering the production unit’s boundaries and critical interdependencies as defined in
Item 1 of this checklist (Item 5 of Appendix 2). Harm is defined as an adverse effect on any of the items in Item
6 of Appendix 2.
If the intervention relates to hard infrastructure, the infrastructure is suitable to climate change conditions overits operational life. The infrastructure must be tolerant to the range of climate hazards identified in Item 2 ofthis checklist and not lock-in conditions that could result in maladaptation.

5. The applicant is required to demonstrate that there will be ongoing monitoring and evaluation of the relevance of the risks and resiliencemeasures, and related adjustments to those measures will be taken as needed.
5.1

Indicators for risks identified under Item 2 in this checklist are provided.

5.2

Indicators for resilience measures identified under Item 3 in this checklist are provided.

5.3

Indicators for ‘no harm’ to relevant system assets identified under item 4 in this checklist are provided.

Appendix

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Adaptation and Resilience checklist for relevant Agricultural Production Unit(s)5.4

The applicant has a viable plan to annually monitor (a) climate risks linked to the production unit, (b) climate
resilience performance, and (c) appropriateness of climate resilience intervention(s), and to adjust as necessary
to address evolving climate risks.

5.5

Applicant has a process for monitoring and evaluation, and this is done annually.

5.6

A grievance redress mechanism is in place to enable stakeholders to identify unanticipated adverse impacts,
including a bias of investments away from high-risk locations and assets.

Appendix 2: Guidance for completion of Adaptation andResilience checklists
1. Identifying critical interdependencies
At a minimum, the following interdependencies should be considered:●

The effects of water use or pollution on other water users or erosion in the watershed.

●

Relationships of the asset/project to nearby flood zones.

●

Introduction of pests and diseases.

●

Reduction in pollinating insects and birds.

●

Reduction in biodiversity of High Conservation Value habitat.63●

Damage or reduction in value of neighbouring property due to boundary trees, other structures at risk of falling during storm
events, agricultural pests, and disease.

●

Fire and other practices that affect air quality.

●

Market influences, such as excess supply which drives down prices.

●

Appropriation of land or economic assets from nearby vulnerable groups.64●

Overuse of inputs.

2. Identifying potential physical climate risks
At a minimum, the following potential physical climate risks should be considered:

63
64

●

Temperature; high/low temperature, change in number of hot nights, heat-spell duration, cold waves, frost●

Water.

●

Precipitation; high precipitation, intense rainfall events, waterlogging, flood, drought, freezing rain (hail, ice)●

Water stress; crop water stress (reflecting combination of temperature, precipitation, and wind), ratio of water
withdrawals to availability.

●

Sea-level; inundation, flooding or storm surges, salinization due to saltwater intrusion or changing water regimes.

●

Glacial melting and lake outbursts; flood, body of water contained by glacier overflows or glacial melts.

●

Wind; cyclones (hurricanes, tornadoes, typhoons), dust and sandstorms, blizzards, wind patterns.

●

Soil; erosion (including coastal erosion), landslides, avalanches, degradation.

●

Seasonality; rain onset, change in seeding date, length of growing season, change in frost-free days in season, otherphenological risks specific to crop type.

●

Pests and disease; new pest and disease patterns, changes in pest and disease vectors.

●

Fire; increased incidence and extent of wildfires or control of agricultural fires.

High Conservation Value (HCV) habitat criteria in accordance with https://www.hcvnetwork.org.
According to IFC Performance Standards

Appendix

Page | 52

●

CO2 Concentrations; generally expected to create a positive effect in fertilisation, stimulating growth, and carbohydrate
production, but risks changes in nutritional content and density, such as protein, sugars, and essential minerals, forexample in wheat, rice, and potatoes.65

3. Physical climate change risks to be considered

4. Risk assessment
Users can choose to apply climate scenarios based on representative GHG concentration pathway to ensure consideration for aworst-case scenario.
•

A broad range of models can be used to generate climate scenarios.

•

Time horizons for assessing climate risk in agriculture can be based on annual seasonal forecasts and every ten-year interval
for the lifetime of the assets and projects. Where accurate assessments of climate variability for specific locations are notpossible, worst-case scenarios can be used.

•

Risks can be characterised by the associated annual probability of failure or annual costs of loss or damage.

•For assessing climate risks and vulnerabilities: the EU Regional Adaptation Support Tool (Step 2) is recommended.

•

Additional guidance for risk assessment using climate scenarios: TCFD The Use of Scenario Analysis in Disclosure of ClimateRelated Risks and Opportunities .

5. Measures to take to ensure ‘fit for purpose’•

In addition to minimum productivity or loss, resilience also can be indicated by the variation in yield during years/seasons ofclimate hazards relative to the variation in yields across years/seasons with no climate hazards. This describes how closely
yields under climate change hazards compare to normal variability in yields. A score of 1 or more indicates that variation inyields under the climate hazard is the same or more as the yields without climate change, in other words, good performancedespite the climate hazard. A score of less than 1 indicates that productivity under the climate hazard is falling below that
achieved in normal years.

•

The timing of risk management may be considered. What can be done before an asset is built to reduce vulnerability? Whatadjustments can be made after the system is built? How can operational practices be improved to increase resilience?

65

https://health2016.globalchange.gov. See also Loladze, I. (2002) Rising atmospheric CO2 and human nutrition: toward globally imbalanced plant stoichiometry? Trends in Ecology and
Evolution 17: 457-461; Müller, C., Elliott, J., and Levermann, A. (2014) Fertilizing hidden hunger. Nature Climate Change 4: 540-541, Myers, S.S., Zanobetti, A., Kloog, I. et.al. (2014). Increasing
CO2 threatens human nutrition. Nature 510: 139-142

Appendix

Page | 53

•Stakeholder consultations can be used to identify different views of what constitutes significant risk of harm andunacceptable levels of harm to the system. Stakeholders should include members in the community affected.

Examples of resilience practices in agriculture are provided below for information only. The measures selected for the farm holding
and associated assets in question must be selected to be appropriate for the identified risks for that holding in its specific context.
•

Improved or more stable productivity (economic buffering of climate impacts): increasing yields or yield stability, or reducing
costs to produce net gains in product or revenue; diversified production; enhancing savings and value of assets; increasing
efficiency of water, energy, fertilizer and other inputs; improving product storage capacities; using the agronomic practicebest suited to changing climatic conditions; reducing the percentage of area planted to vulnerable crops; increasing thepercentage of production under controlled environment agriculture.

•

Adapted stock: using species and breeds adapted to changes in CO2 and climate, e.g., temperature, water regimes, extreme
events, or seasonality.

•

Ecological buffering of climate impacts: water or microclimate management, e.g., irrigation, water storage, increased soil
water holding capacity, agroforestry to buffer extreme temperatures or enhanced soil organic carbon; ecologicaldiversification, including shifting land use from monoculture to polyculture or other diversified production; riparian buffer
strips; soil and water conservation; mangrove management; habitat restoration.

•

Risk management: hard assets (weather stations, satellites, computing, and communication infrastructure) used for climate
information services and early warning systems; crop insurance; monitoring and evaluation of farm performance;
identification and management of risks beyond design standards (e.g., of levees/embankments, or other physicalinfrastructure); emergency preparedness, and other services that help avoid or compensate for climate risk at the farm level.

•

Physical relocation of vulnerable assets or activities: avoided use of locations vulnerable to climate risks such as flooding,salinization, or heat stress.

6. Identifying do no harm aspects
At a minimum, the following should be considered in terms of the production unit/ intervention/ enabling measure’s potential to‘do harm’ to the system it operates within:●

The effects of water use or pollution on other water users or erosion in the watershed.

●

Increased risk of flooding.

●Introduction of pests and diseases.

●

Reduction in pollinating insects and birds.

●

Reduction in biodiversity or High Conservation Value habitat.66●

Damage or reduction in value of neighbouring property due to boundary trees, other structures at risk of falling duringstorm events, agricultural pests, and disease.

●

Fire and other practices that affect air quality.

●

Market influences, such as flooding a market with a commodity and driving down prices 9. Appropriation of land or
economic assets from nearby vulnerable groups.37●

Overuse of inputs.

●

Decline in the productivity of an asset.

●

Decline in conditions below an applicable policy standard.

●

No use of chemicals listed in the Stockholm Convention67 or 1a or 1b in the WHO classification of pesticides by hazard68
or not in compliance with the Rotterdam Convention.40

66

High Conservation Value (HCV) habitat criteria in accordance with https://www.hcvguidelines.org/. 37
According to IFC Performance Standards
67
http://www.pops.int/
68
https://www.who.int/ipcs/publications/pesticides_hazard/en/ 40
http://www.pic.int/

Appendix

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Appendix 3. Additional information on biodiversity safeguard
TNFD and SBTN partnered to provide Guidance for corporates on science-based targets for nature (2023). This guidance provides
an overview of relevant science-based targets for nature (SBTN) guidance to set science-based targets for nature. It includes an
overview of SBTN’s methods and 5-step approach to setting science-based targets for nature, and insight into how SBTN and TNFD
guidance fit together in practice. The relevance of this to the Crop and Livestock Criteria is to help potential applicants to track theirprogress over time and provide evidence to support progress over the period of certification.69
IFC Performance Standard 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources (2012), provides
detailed definitions of key issues related to effective biodiversity management and the associated clear steps that should beconsidered and followed to avoid significant harm to biodiversity and where appropriate deliver biodiversity net gain. Consequently,
it makes IFC PS6 provides an effective and practical resource for potential crop and livestock issuers to utilise to identify key
conservation and biodiversity management strategies that would be a credible sources of evidence to reference in fulfilling thebiodiversity safeguards core requirements.
UNEP Land Use Finance Impact Hub (2023) provides six examples of KPIs related to biodiversity that could be considered as a key
performance indicator included for investors to track progress over time against biodiversity impacts.70 The Criteria would promote
this resource as an tool to can guide applicants on potential KPIs that could be used to monitor and track progress on the state ofbiodiversity linked to crop and livestock production, and count towards evidence of meeting the biodiversity safeguard.
GLOBALG.A.P certifications are also an indication of commitment towards responsible production practices that consider
biodiversity related issues. Specifically, GLOBALG.A.P. offers core solutions that provide internationally recognised standards forprimary production and the supply chain and Integrated Farm Assurance for different agricultural products. These standards usually
result in a certificate that is widely recognised in global markets and frequently requested by buyers as a trading requirement. Thesestandards can be flexibly combined with add-ons to target specific topics in more detail. Of particular relevance is the add-on of
BioDiversity that specifies a set of science-based requirements which help producers demonstrate their on-farm biodiversity
management practices and retailers to identify suppliers that fulfil their corporate social responsibility pledges. Designed to bepaired with Integrated Farm Assurance (IFA) for fruit and vegetables, the audit covers aspects such as soil management, land
restoration measures, and integrated pest management. The add-on monitors, enhances, and protects key on-farm biodiversity
aspects, raising awareness and providing guidance on the development of a comprehensive biodiversity action plan.71 Use of IFA
and BioDiversity add-ons it can send a clear signal of compliance with the biodiversity safeguard.

69

TNFD and SBTN, (2023), Guidance for corporates on science-based targets for nature – TNFD

70

UNEP (2023) KPI List - Land Use Impact Hub

71

GLOBALG.A.P, (2023), BioDiversity (globalgap.org)

Appendix

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Appendix 4. Additional guidance for meeting the social
safeguard from existing standards and regulations
1. Accountability Framework Initiative (2023)
The Accountability Framework Initiative (AFi) provides detailed guidance on key issues related to consideration of social issues, on
which it includes detailed operational guidance on aspects of social issues:-

Operational Guidance: Workers Rights (2021) - guidance on ensuring respect for workers’ rights within company
operations and supply chains, expanding on the workers’ rights provisions, including summaries, best practices, and links
to support.

-

Operational Guidance: Free Prior and Informed Consent (2020) - guidance outlining company best practice in securing
the free, prior, and informed consent (FPIC) of Indigenous Peoples and local communities in operations and supply
chains.

-Operational Guidance: Monitoring and Verification (2020) - guidance on monitoring and independent verification ofcommitments to no-deforestation, no-conversion and human rights, following recognised norms and good practice.
Focused on performance at the supply base level.

-

Operational Guidance: Remediation and Access to Remedy (2020) - Guidance on how companies can ensure proper
access to remedy and remediation of human rights harms in their supply chains and operations, including the use ofgrievance mechanisms.

2. AFi and TNFD (2023)
AFi´s core principles are also included in TNFD Agri-food draft sector guidance (2023). Table 19 below details potential response
options on social aspects in agriculture production units:
Table 19. Example of common risks to social aspects and potential response options (Source: Climate Bonds own elaboration
based on TNFD analysis, 2023)
Risk to social aspects

Response option (as in TNFD, 2023)

Human rights and engagement withindigenous peoples, local
communities and affectedstakeholders●

Commit to providing support to smallholder producers
to help them enter responsible supply chains andimprove their yields and production practices.72●

Commit to testing for free, prior, and informed
consent (FPIC) of potentially affected indigenous
peoples and local communities before acquiring newinterests in land or resources and before newdevelopments or expansions.73●

Commit to respecting and refraining from landacquisition or development until existing conflicts
linked to customary rights to land, resources andterritory have been resolved.74●

Commit to a zero-tolerance approach to violence andthreats against forest, land and human rights
defenders.75

Therefore, utilisation of the AFi’s operational guidance and commitment to their core principles would provide sufficient evidence
to meet the social safeguard.

72

AfI Guidance, Smallholders in Sustainable Supply Chains, Principle 3.1

73

Accountability Framework Initiative, Core Principles, Core Principle 2.2.3., p 7

74

Accountability Framework Initiative, Core Principles, Core Principle 7.1, p 18

75

Accountability Framework Initiative, Core Principles, Core Principle 2.1.7, p 7

Appendix

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3. UN Guiding Principles and OECD Guidelines for Multinational Enterprises76
There are numerous different guidelines with respect to human rights. However, two have a direct effect on companies andinvestors: The United Nations Guiding Principles on Business and Human Rights (UNGPs) and The OECD Guidelines for Multinational
Enterprises (MNEs), which are summarised below to provide an overview of each of the components and their individual focus ofeach.
United Nations Guiding Principles on Business and Human Rights
The UNGPs are a set of guidelines implementing the United Nations’ “Protect, Respect and Remedy” framework for the
responsibilities of transnational corporations and other business enterprises regarding human rights.77 Developed by the Special
Representative of the Secretary-General (SRSG) John Ruggie, these guiding principles provided the first global standard forpreventing and addressing the risk of adverse impacts on human rights linked to business activity. They also continue to provide theinternationally accepted framework for enhancing standards and practice regarding business and human rights. The UNGPs
encompass three pillars outlining how states and businesses should implement the framework:
1. The state duty to protect human rights
2. The corporate responsibility to respect human rights
3. Access to remedy for victims of business-related abuses
OECD Guidelines for Multinational Enterprises
The OECD Guidelines for MNEs are a comprehensive set of government-backed recommendations on responsible business conduct.
The governments adhering to the Guidelines aim to encourage and maximise the positive impact MNEs can make to sustainable
development and enduring social progress. The Guidelines are important recommendations addressed by governments tomultinational enterprises operating in or from adhering countries. They provide voluntary principles and standards for responsible
business conduct in such areas as:
1.

employment and industrial relations;2.

human rights;

3.

environment;

4.

information disclosure;5.

combating bribery;

6.

consumer interests;

7.

science and technology;

8.

competition; and9.

taxation.

It is important to note that these guidelines do not focus on the impact social factors can have on investments (financial materiality)
but rather on the responsibility investors have for the adverse impacts their investments/ companies can cause to society. Today,
many investors are convinced that they should take ESG factors into account, but these guidelines require governments andinvestors to adopt a so-called double (or dual) materiality approach which takes the (positive and negative) ‘social return on
investments’ into account The OECD guidelines and UNGPs are further backed by the European Union (EU) corporate social
responsibility (CSR) strategy, its regulation on sustainability-related disclosures in the financial services sector, and its taxonomy forminimum social safeguards for sustainable activities.

76

OECD Guidelines for multinational enterprises - OECD

77

Business & Human Rights Resource Centre. (2019). UN Guiding Principles. www.business-humanrights.org/en/un-guiding-principles

Appendix

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4. UK Modern Slavery Act (2015)
The Modern Slavery Act (2015) from the United Kingdom in Part 6, requires both medium- and large-sized companies to provide aslavery and human trafficking statement each year, which sets out the steps taken to ensure modern slavery is not taking place intheir business or supply chains.78,79
Many of these statements provide not only general information but also specific numerical data, such as the number of audits
initiated for suppliers at high risk or the number of suppliers that have established corrective action plans, which can help investors
assess materiality.

5. GLOBALG.A.P (2023)80
GLOBALG.A.P certifications are also an indication of commitment towards responsible production practices that consider social
aspects. In particular, the GLOBALG.A.P. Risk Assessment on Social Practice (GRASP) is an add-on to Integrated Farm Assurance (IFA)
for the evaluation of workers' well-being at farm level. Building on the IFA principles and criteria (P&Cs) related to workers’ healthand safety, and covering topics such as labour and human rights, representation of workers, and the protection of children andyoung workers, GRASP is a simple but robust evaluation checklist that producers can use to assess, improve, and demonstrate their
responsible social practices.81

78

It should be noted and emphasised the inclusion of this Modern Slavery Act from the United Kingdom is not an expectation that all aspects of the Act would beapplied and fulfilled in different geographies. Rather, it is included as an example of compliance with leading international regulatory expectations on the topic of
human trafficking and modern slavery compliance.
79
HM Government, (2015), Modern Slavery Act 2015 (legislation.gov.uk)
80

GLOBALG.A.P., (2023), GLOBALG.A.P. | Smart farm assurance solutions (globalgap.org)

81

GLOBALG.A.P., (2023), GLOBALG.A.P. Risk Assessment on Social Practice (globalgap.org)

Appendix

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Appendix 5: TWG and IWG members
Climate Bonds Coordinators:
Ewan Thomson

Sustainability Analyst, Climate Bonds Initiative

Mari Chrys Pablo

Agri-Food Program Coordinator, Climate Bonds Initiative

Technical Lead:
Reyes Tirado

Agri-Food Lead, Climate Bonds Initiative

Lead Consultant:
Joseph PooreHESTIA Project, Oxford Martin School, University of Oxford

TWG Members
Ciniro Costa Jr.

Alliance of Bioversity International and CIAT

Colombia

Daniele Cesano

Adapta GroupBrazilJonathan Hillier

University of Edinburgh

UK

Kelly McNamara

Friends of the EarthUSA

Meian Chen

Innovative Green Development Program

China

Ngonidzashe Chirinda

Mohammed VI Polytechnic University

MoroccoPeter Elwin

Planet Tracker

UK

Raylene Watson

Parthenon-EY

South Africa

Richard Perkins

Agri-environmental political economist

UK

Rodrigo Cassola

UN Environment Program World Conservation Monitoring Centre(UNEP-WCMC)

UK

Sajeev Mohankumar

Farm Animal Investment Risk & Return (FAIRR) Initiative

UK

Soora Naresh Kumar

Indian Agricultural Research Institute

India

Sarah Fadika

Participation in IWG meetings does not necessarily reflect endorsement of the Criteria and serves to provide critical feedback on
the usability-focused consultation process.

IWG Members
Alice Henry

FarmOn App

Netherlands

Chrissa Borja

ISEAL and GrowAsia

Philippines

Gerard Rijk

Profundo

Netherlands

Hamish MacDonald

Carbon Asset Solutions

Australia

Hernan Rodriguez Arias

Ucrop.it

Argentina

James Bentley

National Australia Bank

Australia

James Madoc-Jones

Carbon Trust

UK

Appendix

Page | 59

Jo Raven

FAIRR Initiative

UK

Katerina Elias-Trostmann

BNP Paribas

BrazilFrigolBrazilMariana Vasconcelos

AgrosmartBrazilQian Xiao

Circular Biocarbon Eco-tech

FranceScot Bryson

Orbital FarmUSA

Thiago Camargo

DataFarm

BrazilEuropean Bank for Reconstruction and Development

UK

Modern Farming

China

Mariana Giraldi
Carlos Correa

Thomas Bouriot
Laurence Bahk
Zunyang Zao
Che Meng

Appendix

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