On 8 November 2017, the ASEAN Capital Markets Forum launched the ASEAN Green Bond Standards (Standards). They are based on the Green Bond Principles (Principles) of the International Capital Markets Association. However, while the Principles have provided broad principles on green bonds, the Standards provide more specific guidance on how the Principles are to be applied across ASEAN in order for bonds to be labelled as ASEAN Green Bonds.
As noted, the Standards are aligned and guided by the four core components of the Principles, ie, use of proceeds, process for project evaluation and selection, management of proceeds and reporting. However, the Standards include the following additional features:
- The issuer or issuance of the green bond must have a geographical or economic connection to the region.
- Proceeds from bonds issued under the ASEAN Green Bonds label must be utilised for eligible projects. These include projects relating to the following:
- Renewable energy;
- Energy efficiency;
- Pollution prevention and control;
- Environmentally sustainable management of living natural resources and land use;
- Terrestrial and aquatic biodiversity conservation;
- Clean transportation;
- Sustainable water and waste water management;
- Climate change adaptation;
- Eco-efficient and/or circular economy adapted, production technologies and processes; and
- Green buildings which meet regional, national or internationally recognised standards or certifications.
Fossil fuel power generation projects are excluded.
- Issuers should disclose information on use of proceeds, project evaluation and selection, and management of proceeds to investors in the issuance documentation. In addition, they should ensure that such information is publicly accessible from a website designated by the issuer throughout the tenure of the ASEAN Green Bonds.
- In addition to annual reporting, issuers are encouraged to report more frequently on the allocation of proceeds. The reports should include a list of the projects to which the proceeds have been allocated, a brief description of the projects, the amounts allocated and their expected impact.
- The appointment of an external review is voluntary under the Standards. However, if an external reviewer is appointed, the reviewer’s credentials and scope of review conducted must be made publicly accessible from a website designated by the issuer throughout the tenure of the ASEAN Green Bonds.
Issuers of ASEAN Green Bonds are eligible for the Green Bond Grant Scheme by the Monetary Authority of Singapore (MAS). This was announced by the MAS on 15 November 2017. Under the Green Bond Grant Scheme, qualifying issuances can offset all of the expenses attributable to obtaining an external review for green bonds, up to a cap of S$100,000 per issuance.