Post-issuance impact reporting is a complex and resource-intensive task for green and social bonds issuers that many investors expect issuers to undertake. This article highlights some of the key guidance points on impact reporting in the latest ICMA guidelines and the best practices recommended by other industry bodies.


Post-issuance impact reporting for green and social bonds has been a topic of tremendous interest among issuers and investors in the past few years, spurred on not just by the increase in issuance volumes across industry sectors, geography and issuer type, but also by the heightened scrutiny that investors are placing on the actual environmental and social impact of their capital markets investments. In research conducted by the Climate Bond Initiative (the CBI), it was found that 79% of green bonds issued in or before November 2017 have some form of impact reporting in place and the number of bonds with associated reporting has grown steadily since 2010 (with an average annual growth rate of 139%), when the first still outstanding green bonds came to market1.

With the current climate crisis and its deleterious impact on wildlife, natural habitats, infrastructure, livelihoods and communities globally – from widespread wildfires in Australia to long-term droughts in Thailand and extreme heatwaves in Europe, each occurrence more severe than before – it is imperative that financial sector market participants urgently mobilize capital to finance businesses that produce measurable positive environmental and/or social outcomes, and influence businesses that are not doing so to change their practices for a sustainable future. However, there remains a question as to how debt capital market participants can really gauge the type and extent of positive outcomes achieved unless they are identified, measured and reported in an accurate, objective and clear fashion. In 2019, several industry-driven voluntary guidelines and updates were released, aimed at demystifying pre‑issuance and post-issuance impact reporting for issuers and providing investors with the benefit of report transparency, consistency and comparability by attempting to harmonize the substance and format of impact reports. This note highlights some of the key principles featured in the recently-published ICMA papers titled 'Handbook on Harmonized Framework for Impact Reporting' and 'Working Towards a Harmonized Framework for Impact Reporting for Social Bonds' (June 2019) (together, the ICMA Papers) and the Nordic Public Sector Issuers Position Paper on Green Bonds Impact Reporting (January 2019) (the NPSI Paper).

Post-issuance impact reporting – best practices

Post-issuance reporting on actual impact outcomes is not mandatory under current editions of the ICMA Papers, the NPSI Paper and the Climate Bonds Standard which, instead, require issuers to report on expected outcomes in order to be considered compliant with the relevant standard or guideline. The ICMA Green Bond Principles and the Social Bond Principles expect issuers to report annually on, amongst other things, the expected impact of the projects selected and state that "issuers with the ability to monitor achieved impacts are encouraged to include those in their regular reporting". The NPSI Paper, which complements the ICMA Green Bond Principles, recommends that issuers undertake impact reporting "based on expected environmental impact (ex-ante) from the project [they] finance or co-finance. Issuers that have the ability to provide impact reporting based on actual (ex-post) impacts, are encouraged to do so", actual impact reporting being an ambition2 rather than a requirement.

Below is a summary of, and commentary on, some common themes in the ICMA Papers and the NPSI Paper that issuers and investors alike should consider when preparing or reviewing impact reports. It should be read alongside the original publications to allow for a more comprehensive understanding of their intricacies.

The underlying project for the impact outcomes reported should be clearly identified. Where relevant and possible, the report should also include data on outcomes at a portfolio level.

  • As the investors in one tranche of bonds may not necessarily have also invested in the issuer's other tranches of bonds, an impact report should, as far as possible, state the impact outcomes that are attributable – pro‑rated, where applicable, to avoid overstating the outcomes – to the project funded3 by the proceeds from the bond issuance. This would allow investors to track and evaluate the environmental and/or social impact of their investment in a particular tranche of bonds4. Although this could be challenging to achieve for repeat issuers with vast portfolios of projects (and potentially overwhelming for investors attempting to comprehend large volumes of methodologies and impact data), one-time and infrequent issuers should certainly strive to deliver impact reports with data that can be more precisely linked to a specific project.
  • Where outcomes are aggregated at a portfolio or programme level (as an alternative to, rather than in addition to, project-level reporting), this should be clearly disclosed together with the reasons for doing so. For example, financial institutions with a green bond framework may find it difficult to provide meaningful impact reports at a project level because they do not own or manage the underlying projects.

Additionally, the bond proceeds are often on‑lent to a large and diverse base of borrowers across a range of industry sectors and locations that would render reporting at a project level considerably cost-inefficient and impractical. Indeed, the NPSI Paper recognizes this issue and recommends that "for green bond frameworks where no commitment is made to reporting on smaller projects, i.e. projects below a defined investment size, project-by-project reporting is not required". Some other reasons issuers commonly cite for impact reporting on an aggregated basis are: (i) there are confidentiality considerations that restrict the issuer's ability to provide detailed information on the project, (ii) the issuer's competitive advantage may be undermined if project data is disclosed, (iii) bond proceeds are allocated on a portfolio, not project, basis, and (iv) individual projects are small in scale and would yield more meaningful results if aggregated with those produced by associated projects5.

To see the full article click here


1 "Post Issuance Reporting In The Green Bond Market", Climate Bonds Initiative, March 2019 (the CBI Report)

2 "Reporting Principles – Expected impact, with actual impact as an ambition" – NPSI Paper, at page 14

3 The ICMA Papers recommend basing impact reporting on amounts allocated to projects, whereas the NPSI suggests using disbursed amounts as a basis for calculations to be conservative enough.

4 "For non-dynamic portfolios where allocation is complete, each outstanding green bond will finance a designated sub-portfolio of projects. In such cases, the impact report should clearly state the estimated impact of each sub-portfolio/bond. Reported impact data should preferably and if feasible also be aggregated for all outstanding green bonds, so that is possible to associate all bonds from the same issuer with one aggregated set of impact results. Using the aforementioned approaches should serve to meet reporting demands both from investors which prefer impact reporting data relevant to the specific bond that they have purchased as well as from investors who prefer an aggregated approach" (Source: NPSI Paper, at page 17)

5 In such cases, the World Bank recommends that "when confidentiality or practicality prevents an issuer from reporting at individual project level, the issuer can aggregate the projects by categories according to its eligibility framework or other meaningful way to aggregate results. If this approach is chosen, the issuer is encouraged to provide more qualitative information about the portfolio as a whole, and where feasible supply quantitative results measures" (Source: "Green Bond Proceeds Management & Reporting", A World Bank Guide For Public Sector Issuers, 2018)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.