Evaluation of Green Bond Issuers' Reporting

Abstract

Reporting by issuers is one of the fundamental principles in the green bond market. Disclosures in reports help issuers to assure investors that funds raised from issuing green bonds are used efficiently and contribute to achieving environmental goals. But for this, issuers need to build an internal reporting system, navigate the details of projects, and know how to assess their possible environmental and social impact. The purpose of the article is the formation of methodological approaches for evaluating the reporting of issuers of green bonds in accordance with international standards and requirements. The article examines global reporting practices on the green bond market. The types of reporting submitted by green bond issuers are characterized. The principles on the international and European markets, which are recommended to be followed by issuers of green bonds during the preparation of reports, are summarized. As a result of the research, 4 criteria for disclosure of information by green bond issuers during the submission of reports were identified: periodicity, reliability, transparency and detail. On the basis of the selected criteria was proposed a methodology for scoring the disclosure of information in the issuer's reporting and compliance with the principles set forth in international recommended acts. The article presents a "compliance matrix" contained the requirements that the issuer of green bonds must meet. Checking reports for compliance with established requirements allows establishing the level of information disclosure by the issuer. The proposed disclosure assessment methodology can be useful for green bond issuers to evaluate their own reports and understand their compliance with international standards. However, the application of the methodology can be useful to third parties during the independent examination of green bond issues and the assessment of reporting completeness. The methodological approaches of the study will be particularly useful when developing reporting principles for a national framework, regulation or standard for green bonds.