Aastha Thakur
Published on: 21 December 2022 at 21:15 IST
In its board meeting SEBI introduced the concept of blue bonds and yellow bonds as new forms of sustainable finance, market regulator SEBI decided to expand the framework for green bonds. While yellow bonds are tied to solar energy, blue bonds are related to water management and the maritime industry. These are subcategories of the green debt securities category.
The regulator will specify the basic dos and don’ts relating to green debt securities to address ‘green washing’ related risks.
The term ‘Green Washing’ defines as when money from green bonds is used for projects or activities that don’t help the environment very much.
The SEBI approves the norms established for green bonds by enhancing the scope of definition of green debt security. The new forms of sustainable finance in relation to pollution prevention and control and eco-efficient products.
These measures have been undertaken in response to the increasing global and Indian interest in sustainable finance and in an effort to harmonise the current framework for green debt securities with the updated Green Bond Principles (GBP) acknowledged by IOSCO (International Organization of Securities Commissions)
The most of the green bonds issued to Indian Issuers are enlisted outside the territory of SEBI, as they find the offshore exchange packages more attractive and promising.
A consistent and trustworthy method for defining what is ‘green’ has been one of the major obstacles to further expansion, according to SEBI’s November consultation document.
A lack of clarity in this regard leads to green washing.