IOSCO Sustainable Bonds Report

On 21 May 2025, the International Organization of Securities Commissions (“IOSCO”)  published its Sustainable Bonds Report which looks at the key characteristics and trends tied to the sustainable bond market. The report aims to provide a comprehensive analysis of the sustainable bond market and support initiatives of IOSCO's member jurisdictions in this area. 

The report includes several key considerations, designed to address market challenges, including enhancing investor protection, ensuring sustainable bond markets are operating in a fair and efficient way, and improving accessibility. They are as follows:

1. Greater clarity in existing or new regulatory frameworks.  More clarity in existing or new regulatory frameworks may be beneficial to demonstrate alignment with internationally accepted principles and standards, support consistency, build investor confidence, and support market participation.
2. Sustainable bonds classification. Establishing guiding principles or mapping systems aligned, where appropriate, with industry standards and other regulatory frameworks can help provide clarity and consistency across jurisdictions in categorizing bond types. 
3. Enhancing transparency and ongoing disclosure requirements to promote public accountability. Promote clear, consistent, and sufficiently comprehensive ongoing reporting on issuers' progress toward sustainability-related goals or sustainability performance targets (SPTs) in order to support market discipline when issuers fail to meet their stated sustainability commitments.
4. Promote the use of independent and credible external reviewers. Promote robust assessment and disclosure by external reviewers, including second-party opinion providers, with policies and procedures that ensure their independence and mitigate conflict of interest when conducting their work.
5. Capacity building, collaboration and knowledge sharing. To bridge the knowledge gaps within the market, capacity building and educational programs can increase awareness and understanding of sustainable bonds among issuers, investors, intermediaries and regulators. These programs can support the development of sustainable bond markets, ensuring that market participants are equipped with the necessary skills and knowledge to transact in the market effectively. Furthermore, establishing platforms for collaboration and knowledge sharing between regulators and market participants helps disseminate regulatory expectations, best practices and facilitate knowledge sharing.