SEBI Proposes Stricter Norms for Green Debt Reviewers
By Ankur Chandra | Published at: Aug 1, 2025 05:07 PM IST
Mumbai, August 1, 2025 – SEBI has released a draft circular proposing revised norms for the appointment of independent third-party reviewers or certifiers for green debt securities, aiming to align these with existing ESG debt security requirements.
Background and Objective
SEBI’s February 6, 2023 circular laid down disclosure norms for green debt securities but lacked detailed provisions on reviewer independence, conflict of interest, and professional standards. A later circular dated June 5, 2025, governing ESG debt securities (excluding green debt) – such as social and sustainability bonds – introduced comprehensive requirements for independent reviewers. The regulator now seeks to bring green bonds under the same rigorous framework.
According to SEBI, this alignment will ensure consistency in how ESG and green debt instruments are vetted, instilling greater investor confidence and integrity in sustainable finance disclosures.
Key Provisions in the Draft Circular
The proposed amendments, intended for Chapter IX of the SEBI Master Circular dated May 22, 2024, include the following:
| Clause | Revised Requirement |
|---|---|
| 1.8 | Deleted from Chapter IX |
| New Paragraph 5 | Inserted to define roles, scope, and eligibility of third-party reviewers |
Revised Reviewer Norms
| Aspect | Details |
|---|---|
| Independence | Reviewer must be independent of the issuer, directors, senior management, and KMPs |
| Conflict of Interest | Remuneration structure must eliminate conflicts |
| Expertise | Reviewer must have ESG assessment expertise |
| Forms of Review | May include Second Party Opinion, Verification, Certification, or Scoring/Rating per ICMA guidelines |
| Eligibility Expansion | SEBI-registered ESG Rating Providers can act as reviewers under these norms |
Issuers will also be mandated to clearly define the scope of the third-party review in the offer document and ensure full disclosure of the reviewer’s credentials and evaluation process.
Implementation Timeline
The final circular, once approved post-public feedback, will take effect for all issuances of green debt securities beginning from a date yet to be specified in 2025.
Public Comment Window
Stakeholders are invited to submit feedback on the draft circular until August 21, 2025, via the SEBI web portal. Technical queries can be addressed to SEBI officials Rohit Dubey (rohitd@sebi.gov.in) and Kiran Dhembre (kirand@sebi.gov.in).
About SEBI’s Green Bond Oversight
The Securities and Exchange Board of India (SEBI) regulates the issuance and listing of green and ESG debt securities to ensure transparency, accountability, and alignment with global best practices. This proposed update reflects SEBI’s continued efforts to elevate India’s sustainable finance framework and protect investor interests in the evolving ESG landscape.
REF: https://www.sebi.gov.in/reports-and-statistics/reports/aug-2025/revised-norms-for-appointment-of-an-independent-third-party-reviewer-certifier-for-green-debt-security_95767.html
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