As the sustainable finance industry continues to develop, more and more terms and expressions are being introduced to finance’s repertoire.  Our glossary provides a non-exhaustive collection of green and sustainability terms and expressions recently introduced to the market so that you can build a solid foundation of sustainability knowledge.


Impact Bonds
Impact Bonds are a category of debt securities where the proceeds raised during funding are used to create a positive impact. 
A bond is a debt security traded on the debt market that is used by various entities to raise capital.
Climate Awareness Bonds
Climate Awareness Bonds (CAB) were first issued in 2007 by the European Investment Bank and are widely considered as being the first Green Bonds ever issued.
EU Green Bond Standards
The EU Green Bond Standards (EU GBS), if adapted by the European Commission based on the recommendations of the TEG by the end of this year, will be a voluntary non-legislative standard to enhance the effectiveness, transparency, comparability and credibility of the Green Bond market and encourage issuance of and invest in EU green bonds. 
A framework is a document prepared by the issuer of a green instrument. It outlines how a company proposes to use the proceeds of Green Bonds to finance the eligible green projects and provide the transparency and disclosure investors need to make an investment. 
Green Bonds
Green Bonds enable capital-raising and investment for new and existing projects with environmental benefits.
Green Bonds Initiative
Launched in 2012, the Green Bonds Initiative (GBI) is a non-profit initiative that aims to facilitate to the sustainable transition to a low-carbon and climate resilient economy. The initiative does this by providing information and guidance on the Green Bond industry.
Climate Aligned Bonds
Climate Aligned Bonds are bonds, which are aligned with the Climate Bond Initiative's (CBI) taxonomy, but not in line with labelled Green Bonds.
NDRC Green Bond Guidelines

The National Development and Reform Commission - China (NDRC) guidance lays out some requirements for allocation of proceeds during the bond term. For example, issuers can use up to 50% of the bond proceeds to repay bank loans and invest in working capital. However, it does not establish rules for management of proceeds and reporting. NDRC’s guidelines also define a list of 12 project categories eligible for green bond issuance, which are largely in line with the catalogue of projects endorsed by People's Bank of China (PBOC). The exception is with nuclear energy, which is included by NDRC but not endorsed by PBOC.

Areas covered by the guidelines are:

  • Technology improvement for energy saving and emission reduction
  • Green urbanisation (energy saving)
  • Energy-saving and environmental protection industry
  • Pollution prevention and control
  • Circular economy
  • Water saving and unconventional water use
  • Green urbanisation – transport  
  • Clean and efficient use of energy
  • New energy – hydropower, wind, nuclear, solar, bioenergy, geothermal, shallow geothermal energy, marine and air energy
  • Ecological agriculture and forestry
  • Ecological civilisation demonstration projects
  • Low-carbon industry projects and demonstration projects
A prospectus is a detailed document created by issuers wishing to raise funds on a stock exchange. The document outlines the projects to be funded by the security and allows investors to make informed investment decisions.
Second Party Opinion
Second Party Opinion (SPO) is a document issued by an external party that attests to the conformity of the framework with the standards it claims to adhere to.
Social Bonds
Social Bonds are use of proceeds bonds that raise funds for new and existing projects with positive social outcomes.
Sustainability Bonds
Sustainability Bonds are bonds where the proceeds will be exclusively applied to finance or re-finance a combination of both Green and Social projects.
Sustainability-Linked Bonds
Sustainability-Linked Bonds are any type of bond for which the issuer commits to achieve predefined sustainability objectives, and in which the financial and/or the structural characteristics can vary depending on whether or not the issuer achieves these predefined sustainability objectives.
Sustainability-Linked Bonds
Transition Bonds
Transition Bonds are debt securities issued by high greenhouse gas (GHG) emission entities with the aim of ultimately transitioning into a more environmentally friendly entity. This definition reflects the current understanding in the market. Stakeholders are still working on a final definition.