The Securities and Exchange Board of India (“SEBI”), vide its circular dated February 3, 2023 (“Circular”) has provided a list of dos and don’ts relating to green debt securities to avoid occurrences of greenwashing.
‘Green debt securities’ have been defined under regulation 2(1)(q) of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (“NCS Regulations”) as debt securities issued for the purpose of raising funds which are utilised specifically for renewable energy, clean transportation, sustainable water management, climate change adaptation, energy efficiency, sustainable waste management, sustainable waste management and biodiversity conservation projects.
The Circular mentions the generally accepted definition of ‘greenwashing’ as “making false, misleading, unsubstantiated, or otherwise incomplete claims about the sustainability of a product, service, or business operation.”
In this regard, pursuant to the Circular SEBI has specified the following compliances for issuers of green debt securities, which shall form part of a new chapter IX-A to be inserted in the Operational Circular for issue and listing of Non-Convertible Securities (NCS), Securitised Debt Instruments (SDI), Security Receipts (SR), Municipal Debt Securities and Commercial Paper (CP), dated August 10, 2021, issued by SEBI (“Operational Circular”):
Please find a copy of the Circular here, Operational Circular here and NCS Regulations here.
This update has been contributed by Aastha (Partner), Amisha Agarwal and Neena Varghese (Associates).
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