What it is
The Green Bond Principles (GBP) are voluntary guidelines published by the International Capital Market Association, defining what qualifies as a green bond. They establish four core components: use of proceeds, project evaluation and selection, management of proceeds, and reporting. Updated annually, they serve as the foundational market standard adopted by issuers, underwriters, and investors worldwide.
Why we picked this
Without standards, 'green bond' is just a label anyone can apply. The GBP created the market's first credible definition, and their voluntary adoption by the majority of issuers built the trust that enabled the market to scale past $1 trillion annually. They are the starting point for understanding every other green finance standard.
Key takeaways
- Over 98% of labeled green bonds reference the GBP in their frameworks, making them the de facto global standard even though they remain voluntary.
- The principles require external review (second-party opinion) but do not mandate third-party verification, which is why complementary standards like Climate Bonds Certification exist.
- ICMA also publishes Social Bond Principles and Sustainability Bond Guidelines, creating a unified framework for the broader labeled bond market.