Green bond issuers are expected to provide regular reporting to investors and the market after their green bond has been issued. These “update reports” are important aspects of investor communications and the issuer’s green objectives.

The format and frequency of the update report will depend on the specific circumstances of the issuer and the relevant bond, loan, or other debt instrument, as well as the program of bond issuances.

Update reports usually contain three different types of reporting:

1. allocation reporting: confirming the allocation of the bond proceeds to green projects and assets;
2. eligibility reporting: confirming the characteristics or performance of green projects and assets that support their eligibility to be associated with the green bond; and
3. impact reporting: disclosure of metrics or indicators that reflect the expected or actual impact of green projects and assets.

For simple green projects and assets such as solar power or wind power facilities, it is acceptable for the issuer to just report on the eligibility of the projects and assets, rather than having to track the impact of the renewable energy facilities.

Some bonds have a very stable allocation of proceeds and do not need to track any performance indicators to maintain the eligibility of the projects and assets (e.g., financing for a single large-scale solar facility). This means that the update report provided by the issuer each year can be very concise and simply restate the information from previous reports.

If there are limits to the amount of detail that can be made available in the update report about specific green projects and assets, then the issuer can provide summary information such as the sectors covered by the green projects and assets, or the regions where they are located.

While impact reporting is strongly encouraged by investors, green bond issuers need to weigh the benefits and costs of the efforts required to track and quantify impacts over the term of the bond.

Reporting Formats and Channels

Green bond issuers provide their information in a wide variety of formats. The information is sometimes included in a broader sustainability report for the organization. The green bond update report is often provided by the issuer as a separate document.

Most green bond issuers provide their green bond documents, including update reports, on a sustainability or green bonds page on their respective website. This enables investors and market analysts to easily access the information on a regular basis. The timing of providing the update report can be aligned with the issuer’s schedule of regular reporting and does not need to follow the anniversary of the issuance of the green bond.

Issuers are encouraged to make the update report available through existing capital market reporting channels such as the issuer’s website, stock exchange’s information dissemination portal, or local green bond platform. This streamlines the information gathering process for investors and analysts, further strengthening the value of the green label and reducing transaction costs.

Channels for issuer reporting include various market information providers such as AsianBondsOnline, Environmental Finance, the Climate Bonds Initiative, and stock exchanges.