The framework
Chapter X of the IFSCA (Listing) Regulations, 2024 (regulations 75 to 78) applies to ESG-labelled debt securities listed or proposed to be listed on a recognised stock exchange in the IFSC. It covers green, social, sustainability and sustainability-linked debt securities, and any other ESG label IFSCA specifies. Its requirements are in addition to the ordinary debt-listing rules in Chapter IX. Under those rules, for example, the issuer must obtain a credit rating from at least one credit rating agency registered with IFSCA, from 1 April 2025 or any other date IFSCA specifies, and may add ratings from global agencies (regulation 72).
Recognised standards and external review
A bond may be labelled green, social or sustainability only if the proceeds are to finance or refinance projects or assets aligned with one of the recognised standards in regulation 76(1):
- International Capital Market Association (ICMA) principles or guidelines;
- the Climate Bonds Standard;
- ASEAN standards;
- European Union standards;
- a framework or methodology specified by a competent authority or financial sector regulator in India; or
- other international standards IFSCA permits case by case.
A sustainability-linked bond must align with one of those standards or other criteria IFSCA specifies (regulation 76(2)).
The issuer must appoint an independent external reviewer to confirm alignment (regulation 76(3) to (5)). The reviewer must be independent of the issuer, its directors, senior management and advisers, paid in a way that avoids conflicts, and expert in ESG debt. The review may be a second party opinion, a verification, a certification or a scoring or rating. A credit rating agency or ESG rating provider registered with IFSCA, or with a regulator in India or abroad, may act if it meets these conditions. Details of the reviewer must be disclosed.
What issuers must disclose
| Stage | Use-of-proceeds bonds (green, social, sustainability) | Sustainability-linked bonds |
|---|---|---|
| Offer document (regulation 77) | ESG objectives; how projects or assets are evaluated and selected; proposed use of proceeds; systems for tracking deployment | Rationale and consistency with the issuer's sustainability and business strategy; pre- and post-issuance obligations under the chosen standard (for ICMA, the five core components: KPI selection, target calibration, bond characteristics, reporting and verification) |
| Continuing (regulation 78) | At least annually until proceeds are fully used: utilisation; allocation by project or asset (aggregated if confidentiality requires); qualitative and, where feasible, quantitative impact, with methods and assumptions | At least annually, and at each date relevant to the targets: KPI performance with baselines; information on the ambition of the targets; an external reviewer's verification report on performance and its effect on the bond's terms |
IFSCA's greenwashing principles
IFSCA's circular of 21 November 2024 (F. No. IFSCA-DSF/6/2024-Capital Markets) sets five principles for issuers of ESG-labelled debt in the IFSC:
- Be true to label. Do not use "green", "social", "sustainability" or "sustainability-linked" unless the bond aligns with a recognised framework. Explain in the offer document how the use of proceeds aligns with it.
- Screen the green. Disclose a specific methodology for selecting projects, not generic statements. For sustainability-linked bonds, explain the target, how and when it will be met, and the assumptions behind it.
- Walk the talk. Disclose an allocation plan and internal controls for tracking proceeds, say how unallocated proceeds are temporarily placed, and disclose any misallocation promptly.
- Overall impact. Quantify negative externalities and acknowledge trade-offs, without selective use of data.
- Be alert. Keep monitoring and reporting impact using consistent metrics.
The exchanges must monitor initial and ongoing disclosures and refer potential greenwashing to IFSCA, which may act under the IFSCA Act, 2019 and the Listing Regulations.
Transition bonds, and points to watch
IFSCA has also issued a framework for transition bonds, dated 29 July 2025, to finance decarbonisation in high-emission sectors. Read it alongside Chapter X before labelling an issue as a transition bond.
- Choose the standard first: it drives the disclosures and the reviewer's scope.
- For sustainability-linked bonds, set targets that will survive scrutiny. IFSCA gives targets set too low as an example of a misleading label.
- Plan the annual reporting before issue. It continues until the proceeds are fully used.
- Supranational, multilateral and sovereign-guaranteed issuers may ask the exchange to relax some requirements of Chapters IX and X (regulation 74).