9. January 2023

We review reporting for green and social bonds

More credibility towards investors

Why is an external audit of the report recommended?

Your issuance was already a year ago and your report is ready for publication? Have your reporting additionally verified – this way you follow best market practice in line with the International Capital Market Association (ICMA).

ICMA recommends post-issuance external verification of the use of proceeds, environmental or social impact and the alignment of reporting with the Green Bond Principles (GBP).

Independent verification of the report serves transparency and acts as a quality marker for investors – just like a Second Party Opinion before the issuance.

Provide additional transparency

Market studies show that investors face a particular challenge in assessing the actual environmental or social impact of bonds.* They have to rely on the information voluntarily disclosed by issuers. This is usually only available after the issuance, when the financed projects are at an advanced stage of development. The reported information is only useful to investors if it simultaneously meets the criteria of relevance and reliability.

This is where external verification comes in: The credibility and consistency of the disclosed information in the report increase significantly when third parties verify the information.

We see particular added value in reports if they consistently and tangibly demonstrate the positive contribution to climate protection or social sustainability. With our verification, we support you in this. Your report will be more credible in the market if it complies with the ICMA guidelines. With our verification, we support you in this. Your report will be more credible in the market if it complies with the ICMA guidelines.

The requirements for your reporting

Reporting is a core element of the Green Bond Principles (GBP) from ICMA.** As an issuer, you are required to communicate up-to-date information about the use of proceeds to investors. For example, a report should disclose the following:

  • Information on the allocation of the proceeds of the issuance
  • A list and description of the projects financed to which the proceeds of the green or social financing have been allocated
  • Expected or actual impacts of the projects – presented using environmental or social indicators, depending on the type of financial instrument

You have one year after the issuance to report. You make a special contribution to transparency if you use ICMA’s impact indicators. These are currently available for all project categories of the Green Bond Principles, so that you can communicate the environmental benefits in a market-oriented way.

Assessing the social impact is a particular challenge. Here, too, ICMA can help: through example indicators with a focus on outcome and output indicators. It is also important to show the benefits for a defined social target group.

Last but not least, a piece of advice to help investors compare the environmental performance of the project: Use guides such as the Harmonised Framework for Impact Reporting to prepare the report.

Would you like to have your reporting independently verified, too?

We will verify your report and check whether…
…you have fulfilled your disclosure obligations under the framework,
…the projects meet the predefined eligibility criteria and have already contributed to a positive social or environmental impact,
…you have allocated the funds from the issuance for the intended purposes and have complied with the disclosures in the framework.

To review your reports transparently, we have developed a methodologically sound approach based on the latest ICMA principles and the recommendations of the Harmonised Framework for Impact Reporting. In this way, we support you with fully GBP-compliant communication for your funded project.

You would like a practical example?

Take a look here at how we reviewed the reporting of Greencells GmbH.

Have we convinced you?

Feel free to contact us!


*The value of external reviews in the secondary green bond market
**also applies to the Social Bond Principles (SBP) and Sustainability Bond Guidelines (SBG) of the ICMA.

Further sources: Guidelines for Green, Social, Sustainability and Sustainability-Linked Bonds External Reviews (June 2022)

Daria Ezhkova

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