Climate Bonds
Guide to Certification
ENTITIES

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

Climate Bonds Standard and Certification Scheme | Page 1

The Certification label is anendorsement of the green credentialsof the Entity and the ambition andcredibility of the corporate transition
plans.
The science-based Eligibility Criteria arealigned with the Paris agreement
goals and developed through arigorous process, demonstrating
credibility and robustness.

Benefits ofCertification

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

Clearly demonstrates to the market that
the Certified Entity meets the highest
standards for climate integrity.
Enhanced reputation benefits for Issuers,
Companies or Asset owners.

Climate Bonds Standard and Certification Scheme | Page 2

OUR LABELSThe Climate Bonds expanded Standard and Certification Scheme
offers two levels of Certification for Entities:

LEVEL 1
Entities (or companies), that are alreadyaligned with 1.5 degree pathways. This
category includes both those already near
net-zero and those above net-zero but within
sectoral 1.5 degree pathways and transition
plans that predict alignment with thosepathways going forward.

LEVEL 2
Entities (or companies) whose transition
plans predict that they will be aligned with 1.5
degree pathways by 2030.
Company ZTransition

Company Z in the graph representsa Transition Certification, whereas
Company X, Y represent
Aligned Companies.

Greenhouse Gas Emissions

Company Y

Company X

1.5˚C pathway for sector

AlignedTime2030

Climate Bonds Standard and Certification Scheme | Page 3

ENTITY CERTIFICATION
Climate Bonds is able to provide Certification to non-financial corporate
Entities or a segregated segment of such entities. This includes acompany or a group of companies. The boundary of the activities is atthe discretion of the applicant, subject to the following:

Parent companies must include subsidiary companies within their boundary
unless there are no Sector Eligibility Criteria available to assess the activities ofthese companies.
Where Criteria exist only for a sub-division of a company, that sub-division can be
set as the Certified Entity and be Certified in its own right.
Where an activity of the Certified Entity is carried out across multiple
sub-divisions or subsidiaries operated or owned by the same legal entity,
the Applicant must include all such sub-divisions and subsidiaries within theboundary of the Certified Entity.

This includes:

This includes:•Entities that have ambitious Performance Targets as defined in the sector
specific Eligibility Criteria and the requirements for a credible transition planand disclosure as defined in this Standard;•Entities that have transition plans to reach the required Performance Targets
within a designated time period and meet the disclosure requirements.

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A quick guide to Eligibility1Certified entities may either have emissions already at or near zero
(Level 1: Aligned label), or significantly above zero but with targets andplans aligned with 1.5 degree pathways (Level 2: Transition label).

2Certification is limited to entities, or segregated segments thereof, forwhich the Climate Bonds Initiative has Climate Bonds Standard Sector
Criteria.

3The operations of the Certified Entity must be disaggregated into its
component business activities according to either turnover or GHGemissions.

456To be eligible for Certification, the proportion of the Certified Entity’s
Eligible Activities must be at least 90% of the Certified Entity’s total
activities.
Certification is valid for five years from the date of certification. Externalverification by a Climate Bonds Approved Verifier is required on anannual basis.
The Entity Certification Checklist describes more precisely what isrequired in order to meet the Entity Certification.

Climate Bonds Standard and Certification Scheme | Page 5KEY OVERVIEW OF CERTIFICATION OF ENTITIES

Entities

Certification attaches toCompany or Group of Companies or anyparts thereof.

Suitability

Corporate Entities (excluding financial institutions,sovereigns, municipalities or local authorities)

Eligibility rules

Entity must have short, medium and long-term
Performance Targets (PTs) aligned with the relevanttransition Sector Specific Criteria.
To meet the PTs the Entity must have a credible
Transition Plan, backed by business and finance plans
and a suitable governance framework.

Validity of certification

5 years

Types of instrumentsthat can be certified

Not linked to a debt instrument. May be used for
issuing certified general purpose debt.

Regularity of verification

At the time of applying for certification and thenannually thereafter

ExamplesCertification of a steel manufacturer or the steel
manufacturing part of a wider group/entity (subject toEntity safeguards)

Safeguards on wider entity

Yes – on wider Parent Group.

Climate Bonds
Bonds Standard
Standard andand Certification
Certification Scheme
Scheme || Page
Page 62
ClimateENTITY CERTIFICATION PROCESS
EntityEntityCertification
Certification
Application:
Application:
1. Certification Agreement
1. Certification Agreement
2.2.Certification
CertificationInformation
InformationForm
Form (CIF)
VerificationReport
Report3.3.Verification

YES

Submitted to CBICertificationAwarded by
Climate Bonds

Certification is
confirmed or awarded

Annual Verification
and ReportingNOCertification
confirmed by
Climate Bonds

DecisionDocuments

5 Years elapsed fromdate of Certification

YESEntity to renew
Certifciation?

NoNOYes

Climate Bonds Standard and Certification Scheme | Page 7

End ofprocess

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

Disclaimer: The information contained in this document does not constitute investment advice in any form or any invitation or inducement to engage in investment activity
and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or debt instrument or investment product is for information purposes
only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for any content on any external website.
Certification under the Climate Bond Standard relates exclusively to the conformity of one or more designated debt instruments, designated assets and/or designated entities
with the applicable Climate Bonds Standard at the time of certification. Certification under the Climate Bond Standard carries no implication (and should not be understoodas carrying any implication) as to any other aspect of any debt instrument or investment product or any collection of debt instruments or investment products or any asset or
entity or group of assets or entities or as to continuing conformity at any time after the time of certification. In particular, such certification carries no implication (and should
not be understood as carrying any implication) that any stated target has been or will at any time be met or that any particular legal or regulatory requirement has been or will
be satisfied.
The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or (subject to the previous paragraph) any other aspect of any debt instrument
or investment product or any collection of debt instruments or investment products or any asset or entity or group of assets or entities and no information within this document
should be taken as such, nor should any information in this document be relied upon in making any investment decision.
A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment made by an individual or organisation, nor for
any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds
Initiative document.
Version: 16182023