SEBI Proposes Third-Party Reviewers for Green Debt Securities
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- Last Updated on 4 August, 2025
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Draft Circular; Dated: 01.08.2025
SEBI Proposes Stricter Oversight for Green Debt Securities
The Securities and Exchange Board of India (SEBI) has proposed amendments aimed at tightening the regulatory framework for green debt securities. The key proposal mandates the appointment of independent third-party reviewers or certifiers for such instruments. This move seeks to bring green debt instruments in line with the regulatory standards already applicable to other ESG-linked bonds, such as social bonds and sustainability bonds.
Mandatory Appointment of Independent Reviewers
Under the proposed norms, issuers of green debt securities will be required to engage an external reviewer or certifier with appropriate expertise in Environmental, Social, and Governance (ESG) evaluations. This reviewer must be independent of the issuer, including its directors, senior management, and key managerial personnel (KMPs). The objective is to ensure that the sustainability claims associated with green bonds are credible, transparent, and verified by qualified professionals.
Strengthening Investor Confidence and ESG Integrity
The move is expected to enhance investor confidence in the Indian ESG debt market by ensuring better transparency and accountability. By requiring professional verification of green claims, SEBI aims to address the growing concerns around greenwashing—where funds are raised under the guise of environmental commitments without genuine impact. These stricter norms will also promote consistency in disclosures and comparability across different ESG instruments.
Public Feedback Invited by August 21, 2025
SEBI has invited public comments on the proposed regulatory changes, with stakeholders encouraged to submit their feedback by August 21, 2025. Inputs from issuers, ESG rating agencies, investors, and financial market participants will be instrumental in finalising the framework. Once implemented, these norms will likely form part of a broader initiative to standardise and strengthen the credibility of ESG investing in India.
Click Here To Read The Full Circular
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