IFSCA Unveils Framework for ESG-Labelled Transition Bonds

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IFSCA Transition Bonds ESG-labelled debt sustainable finance green bonds listing regulations IFSC transition finance framework

Circular F. No. IFSCA-DSF0SFHB/2/2025-Capital Markets, Dated: 29.07.2025

IFSC Authority Introduces Framework for Transition Bonds

The International Financial Services Centres (IFSC) Authority has introduced a dedicated framework for Transition Bonds, marking a significant step in aligning sustainable finance initiatives with global standards. These bonds are now formally recognised as ESG-labelled (Environmental, Social, and Governance) debt securities under the IFSC’s Listing Regulations, reflecting a growing focus on green finance in India’s international financial ecosystem.

Based on Expert Recommendations and Public Consultation

The newly released framework stems from the recommendations made by an expert committee and follows a period of public consultation. This collaborative and inclusive approach ensures that the Transition Bond framework is both robust and practical, addressing the evolving needs of issuers, investors, and regulators while supporting climate-aligned financing.

Supporting Hard-to-Abate Sectors in Their Green Transition

Transition finance plays a vital role in helping high-emission, hard-to-abate sectors such as steel, cement, and heavy transport gradually shift from carbon-intensive operations (“brown”) to more sustainable, low-carbon (“green”) alternatives. The framework for Transition Bonds provides a viable funding avenue for such industries, enabling them to raise capital while committing to measurable decarbonisation pathways.

Strong Uptake of ESG-labelled Securities at IFSC

As of June 30, 2025, ESG-labelled debt securities, including Transition Bonds, reached a total listing value of USD 15.43 billion on IFSC exchanges. This amount represents approximately 25% of all debt listings on the platform, highlighting the increasing investor appetite for sustainable financial instruments and the IFSC’s growing prominence as a hub for green finance.

Click Here To Read The Full Circular 

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied