India steps up ESG debt game with comprehensive new framework

Posted on June 15, 2025 by Editor

The Securities and Exchange Board of India (SEBI) has significantly expanded its regulatory approach to sustainable finance, introducing a detailed framework for social, sustainability, and sustainability-linked bonds. These join green bonds under a unified category: ESG Debt Securities. The move marks a serious commitment to deepening the market for credible, accountable ESG finance in India.

The framework brings clarity where ambiguity once reigned. Issuers must now align with recognised international standards, define their objectives with precision, and submit to robust third-party verification. Sustainability-linked bonds, in particular, raise the bar-requiring firms to tie financing terms to measurable ESG outcomes. Post-issuance, issuers face ongoing reporting and disclosure obligations, designed to ensure bonds stay "true to label."

SEBI's stance on "purpose-washing" is especially noteworthy. The regulator is clear: ESG claims must stand up to scrutiny. This signals a maturing market, where labels must be earned, not assumed. The new rules not only aim to build investor trust but also offer a blueprint for other jurisdictions navigating the balance between ambition and accountability.

SEBI's full ESG debt framework is available here.