ESG Framework For Debt Securities

The Securities and Exchange Board of India ("SEBI") released a circular on 5th July laying down a comprehensive framework for ESG Debt Securities (other than green debt securities). The aim of SEBI is to bolster credibility, enhance transparency, and ensure that the standards followed by Indian companies align with international benchmarks. The regulatory framework governing green bonds has already been in place since 2017. The new framework covers social bonds, sustainability bonds, and sustainability-linked bonds. Each of these bonds has its own metrics and regulatory compliance. The framework provides regulations for all stages—pre-issuance, post-issuance, and ongoing compliance related to reporting. The eligibility criteria are quite rigid; only those debt securities that align with global standards will be categorised as "Social," "Sustainability," or "SLB" bonds.