In a draft circular, Sebi said that the current standards for green bonds, introduced in February 2023, have no detailed requirements on the independence of the reviewer, the limitation of conflicts and disclosure standards that are now present for other ESG-linked effects under a circular of June 2025.
The newest proposal from the regulator is looking for public comments about a revised framework that would bring parity by incorporating extensive criteria for external certifications of green bonds on non-convertible effects.
Sebi proposes stricter regulations for the appointment of independent external reviewers of green debts. This step is intended to align the standards that apply to other ESG-linked bonds, in which gabunes are tackled in the independence of the reviewer and the conflict of interest. The revised framework aims to determine extensive criteria for certifiers of green bonds, which ensures more transparency and credibility.
According to the proposed standards, EXPENTS of green debts must designate reviewers that are independent of their management, administrators and important management staff. These reviewers will be reimbursed in a way that prevents conflicts of interest and has relevant expertise in assessing ESG debt certificates.
The scope of the assessment of the independent external reviewer/ certifier is specified in the offer document and the reviewer can provide opinions, verifications, certifications or ESG scores of second parties.
The Markets Watchdog has also allowed SEBI-registered ESG rating providers to act as reviewers, subject to the same state.
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