The Importance of Reporting

Meggie Eloy

5 years: Technical analysis

In this video, Meggie dives into the critical role of reporting in labelled bonds and why transparency is key to maintaining trust in sustainable finance. She explains the two main types of reporting pre-issuance external reviews and post-issuance allocation and impact reporting, highlighting how they prevent greenwashing and ensure accountability.

ESG Bond Markets

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The Importance of Reporting

3 minutos 58 segundos

Principais objetivos de aprendizado:

Understand the role of reporting in labelled bonds
Recognise the two main types of reporting: external review and post-issuance reports
Identify key components of best-practice reporting
Outline the importance of transparency in building trust and preventing greenwashing

Visão geral:

Reporting is essential for labelled bonds to ensure transparency, accountability, and credibility in sustainable finance. It prevents greenwashing, gives investors confidence, and aligns with best practices. Reporting includes external reviews before issuance and ongoing allocation and impact reporting. Climate Bonds Initiative’s certification scheme provides guidance on what should be included. Clear, transparent, and publicly available reporting helps maintain market trust and supports the growth of the sustainable bond market.

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Resumo

Why is reporting important for labelled bonds?

Reporting ensures that funds raised through labelled bonds are properly allocated and deliver their intended social or environmental benefits. Without clear and transparent reporting, investors cannot verify whether their capital is truly contributing to sustainable projects.

Strong reporting mitigates greenwashing risks, ensuring that sustainability claims are backed by data. Guidelines vary based on regulatory requirements, taxonomies, and market expectations, but the key goal remains the same: credibility and accountability.

What are the two main types of reporting?

There are two critical stages of reporting in labelled bonds:

Pre-issuance external review: A third-party reviewer assesses whether the bond meets green/social criteria, aligns with taxonomies, and delivers genuine sustainability benefits.
Post-issuance reporting: Issuers must demonstrate that funds are being used as promised. This includes:
1. Allocation reporting: How funds are distributed across projects
2. Impact reporting: The environmental or social benefits achieved

Both types ensure market integrity, giving investors confidence in sustainable finance products.

What should be included in labelled bond reports?

Best-practice reporting includes:

Allocation of funds: Stating percentage allocated until full deployment
Impact reporting: Providing quantitative and qualitative metrics on project benefits (e.g. GHG reduction, renewable energy installed, affordable housing provided)
Geographical distribution: Noting location-specific performance factors (e.g. building energy efficiency varies by region)
Climate/social objectives: Demonstrating alignment with sustainability goals
Transparency: Reports should be publicly available via company websites, annual reports, or sustainability disclosures

Why is transparent reporting crucial for the sustainable bond market?

Without robust reporting, the labelled bond market risks losing credibility, undermining investor confidence and slowing sustainable investment flows. Transparent, standardised reporting ensures that capital is effectively deployed towards climate and social objectives, driving real impact.

By maintaining clear, data-driven disclosures, issuers can build long-term trust, attract more investors, and strengthen the role of labelled bonds in sustainable finance.

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Meggie Eloy

Meggie Eloy is a Senior Technical Analyst in CBI's Capacity Building and Technical Assistance team, providing technical assistance to prospective debt issuers through portfolio reviews, entity readiness assessments, GSS+ training, and capacity building. She also supports clients in creating credible transition plans by reviewing existing plans to ensure they follow best practice guidelines. Prior to her role, she worked in CBI's Certification team, reviewing and processing green bond applications to determine certification. She has assisted in delivering over 300 billion US Dollars of Use of Proceeds debt instruments, focusing on limiting global warming to at or below a 1.5°C future. Meggie has worked across sectors such as Renewable Energy, Low Carbon Buildings, Low Carbon Transport, and the transition of hard-to-abate sectors like Steel, Cement, Hydrogen, and Basic Chemicals. She holds an MSc in Corporate Environmental Management from the University of Surrey, a BSc in Geography from the University of Leicester, and a CFA Level 4 qualification in Climate and Investing.

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