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ESG Type

From the Collaborative Bond and Money Market Data Portal

ESG stands for Environmental, Social and Governance and it refers to the criteria used by investors to assess how an issuer manages its relationship with its employees and other key groups (Social), how it considers the way they impact the environment (Environmental) and the way the leadership, executive pay and internal controls are controlled within the entity (Governance).

In the Collaborative Bond and Money Market Data Model, the ESG classification appears as a binary value (yes or no) within the universe of Bond and Money Market Instruments. Where this is Yes, the data Model allows for specifying one of the following ESG Types:

Green
Green - Carbon Neutral
Green - Climate
Green - EU
Green - Nuclear
Green - Solar
Green - Water
Social
Social - Covid
Social - Health
SLB - KPI
SLB - SLL
SBD
Sustainability - UoP
Sustainability - UoP Green
Sustainability - UoP Social
Transition

There are a number of emerging standards, like the ICMA's Green Bond Principles, that determine if a Debt Instrument can be classified as ESG. The classification is often determined by a third-party consultancy specialised in assessing and monitoring adherence with these standards. In addition to ICMA’s Green Bond Principles, the EU is expected to release the ‘Sustainable Finance Taxonomy’ in 2021 which will allow investors to have a clear understanding of when an economic activity is environmentally sustainable or helps transition to a low-carbon economy in the future

ESG debt instruments include, but are not limited to, the following:

  • Climate Awareness bonds: Fixed-income instruments to climate change solutions.
  • Social bonds: Bonds whose proceeds are used to fund projects with positive social outcomes.
  • Blue bonds: Debt instrument to finance marine and ocean-based projects.
  • Green bonds: Fixed-income instrument to fund specific climate and environmental projects.
  • SDG Bonds: Fixed-income instruments used to fund an entity’s to target thematic objectives. For further information on the UN’s SDGs see the following link.
  • Sustainability bonds: Bonds specifically used to fund green and social projects.

Any instrument that falls under any of the above definitions will be classified as ESG for the purpose of simplicity. At the Collaborative Market Data Portal, a Debt Instruments is classified as ESG where either the instrument is listed on an ESG or similar exchange or where the issuer or a dealer has communicated that it is an ESG debt instrument.

For information on the current size of the Green Bond Market, please use CMDportal's data sheet tool. Select the Green Bond tick box.
For information on issues in Green Bond market, please use CMDportal's Instrument search tool. Select the Green Bond tick box in Advanced Search.
For information on the composition of the Green Bond Market, please CMDportal's issuer search tool.
For information on active dealers in the Green Bond Market, please use CMDportal's dealer search tool.

Related Terms
Green Bond
Related Terms
ESG Commercial Paper, ESG Ratings, ESG bonds