An ESG bond is a debt security that funds an environmental, social, or governance goal.
“Larsen & Toubro (L&T) has announced a Rs 500 crore ESG bond issuance deal, becoming the first Indian corporate to do so under the Securities and Exchange Board of India’s (Sebi’s) newly introduced ESG and sustainability-linked bond framework,” the company said in a statement.
HSBC is acting as the sole lead arranger in the transaction, it said.
As part of the ESG bond deal, the company said it is committed to environmental targets, including a decrease in intensity of fresh water withdrawal and emissions of greenhouse gases.
These initiatives are in line with the company’s long-term sustainability goals of achieving water neutrality by 2035 and carbon neutrality by 2040. The issuance is compliant with Sebi’s regulatory framework announced on Thursday, which is designed to promote transparency, accountability, and alignment with international ESG standards. The framework outlines key requirements for issuers, including the disclosure of sustainability objectives, mandatory external assessments such as second party opinions, and post-issuance reporting.
It also mandates clear key performance indicators and targets to measure ESG outcomes, crucial steps in supporting country’s net-zero and climate-resilient growth agenda.
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