Climate Bonds Initiative (CBI) has published a new document that provides a step-by-step guide for corporate issuers on how to prepare and issue a bond to finance their climate transition, using recommendations from leading organizations on the creation of a credible transition plan to achieve net zero, in accordance with the disclosure frameworks required by climate transition-linked bonds.

This guide begins with a recap of the need for transition finance, and following a description of the decision-making process, presents five steps to illustrate the typical journey an entity will follow to issue a bond: i) transition plan; ii) which thematic label? (green, sustainability, and sustainability linked); iii) the bond framework; iv) bond issuance; and v) post issuance reporting.

The authors state that while the bulk of the aligned-green bond non-financial corporate issuance comes from developed countries, the number of deals from middle- and low-income countries such as Brazil, South Africa, Turkey, Morocco, Indonesia, and Chile is growing. Corporate issuance examples from Grupo Bimbo of Mexico, Latin American Arcos Dorados Holdings and Interchile of Chile, among others from different regions of the world, are detailed through the document.

CBI has identified five areas of transition finance that can be developed to move the market forwards: i) regulatory frameworks and policy support (taxonomies, disclosure frameworks, industry roadmaps and sector level decarbonization pathways and standards for transition finance instruments); ii) all scopes of emissions; iii) resilience; iv) entities operating in all sectors must participate; and v) just transition and biodiversity.