## RECOMMENDATION 4 ON CLIMATE FINANCE OF THE G20 DATA GAPS INITIATIVE 3 (DGI-3) — GUIDANCE NOTE ON CLIMATE FINANCE DEBT SECURITIES ## Source details **Canonical URL:** [RECOMMENDATION 4 ON CLIMATE FINANCE OF THE G20 DATA GAPS INITIATIVE 3 (DGI-3) — GUIDANCE NOTE ON CLIMATE FINANCE DEBT SECURITIES](https://www.imf.org/-/media/files/data/statistics/wgsd/dgi-recommendation-4-on-climate-finance-guidance-note-on-climate-finance-debt-securities-final.pdf) ## Other formats - [Markdown version](/-/media/files/data/statistics/wgsd/dgi-recommendation-4-on-climate-finance-guidance-note-on-climate-finance-debt-securities-final.pdf.md) - [Structured JSON version](/-/media/files/data/statistics/wgsd/dgi-recommendation-4-on-climate-finance-guidance-note-on-climate-finance-debt-securities-final.pdf.json) --- ### Purpose and scope - The workplan of the G20 Data Gaps Initiative 3 (DGI-3) envisages G20 economies to “provide (preferably on a quarterly frequency) experimental data on issuances and holdings of green debt securities and listed shares securities to the BIS, based on self-commitments and consistent as much as possible with the Handbook on Securities Statistics (HSS), and any other specific guidance developed in the context of the recommendation, and provide documentation on the compilation methodology.” - This Guidance Note provides definitions and compilation methodology for climate finance debt securities for the implementation of Recommendation 4. - Date of the Guidance Note: 15 October 2024. ### Previous work and alignment with macroeconomic manuals - The Climate Finance Task Team developed reporting templates covering aggregates on climate finance debt securities and green listed shares; debt securities covered include green debt securities, sustainability debt securities, and sustainability-linked debt securities. - Parallel updates to macroeconomic manuals: the Intersecretariat Working Group on National Accounts (ISWGNA) updated the System of National Accounts (SNA) and the IMF updated the Balance of Payments and International Investment Position Manual (BPM). Close coordination occurred between the Climate Finance Task Team and ISWGNA to ensure conceptual alignment. - The Task Team provided comments on draft 2025 SNA definitions and agreed to adjust Recommendation 4 working definitions once SNA definitions were confirmed. ### Agreed definitions for Recommendation 4 (aligned with 2025 SNA) - Recommendation 4 follows the 2025 SNA definitions for compiling aggregates on climate finance debt securities. Definitions summarized (Box 1): - Green debt securities: debt securities where the use of proceeds is restricted to financing or refinancing activities or projects that improve the condition of the environment. - Sustainability debt securities: debt securities where the use of proceeds is restricted to financing or refinancing activities or projects that improve the condition of the environment and society. - Sustainability-linked debt securities: debt securities for which certain characteristics, such as the associated cash flow payments, are linked to achieving performance objectives that improve the condition of the environment and/or society. - For implementation purposes, the SNA definitions should be considered as equivalent to the definitions of green, sustainability, and sustainability-linked bonds provided by the International Capital Market Association. ### Information from the May–June 2024 survey of G20/FSB economies - Survey period: May-June 2024. - Respondents: 22 G20/FSB member economies replied. - Key survey findings: - All 22 responding economies replied that the working definitions of the Recommendation 4 Reporting Templates and the SNA were broadly aligned with the definitions used in their securities markets. - All responding economies that are already compiling climate finance statistics on debt securities except for one replied that the definitions were broadly aligned with the definitions used in their compilation processes. - Most responding economies already collect data on the assurance level of climate finance debt securities (i.e., whether the securities are self-labelled, have a second-party opinion, or are certified). - Most responding economies also collect data on the taxonomies and/or standards with which climate finance debt securities are aligned. ### Assurance levels (classification reliability) - Rationale: To assess reliability of classification, information on the “assurance level” should complement the type of climate finance debt security. - Assurance level types described: - Self-labelled by issuer. - Issued under a framework that has received a second party opinion (SPO) from a recognised provider (pre-issuance SPO may be accompanied by a post-issuance external review). - Certified by an independent specialised entity. - Recommended approach for compiling statistics: - Flexible approach consistent with the 2025 SNA: allow compiling statistics that include all assurance levels (i.e., including self-labelled securities) and provide “of which” breakdowns for climate finance debt securities with at least an SPO. - When reporting aggregates with assurance level unspecified (i.e., all assurance levels), metadata must clearly specify which types of assurance are considered in the compilation. - DSD code tables will be provided for the Recommendation 4 Reporting Templates to specify the DSD keys under which aggregates at different assurance levels should be reported. ### Information on standards and taxonomies - Observation: There is a wide range of market/regulatory standards applied across jurisdictions. - Survey confirmation: G20/FSB economies consider a diverse set of standards when collecting data on climate finance debt securities. - Recommendation 4 position: - Acknowledge that different economies use different market/regulatory standards when compiling statistics on climate finance debt securities. - When reporting aggregates, metadata must clearly specify which standards are considered in the compilation. - Examples of standards referenced (as illustrative market/regulatory examples in the Guidance Note text): - Principles: International Capital Market Association Green Bond Principles, Sustainability Bond Guidelines, Sustainability-linked Bond Principles. - Certification/designation schemes: Climate Bonds Initiative Climate Bonds Standard, European Union Green Bond Standard. - Underlying taxonomies: China Green Bond Endorsed Projects Catalogue, Korean Green Taxonomy Guideline, EU Taxonomy Regulation. --- _Source: https://www.imf.org/-/media/files/data/statistics/wgsd/dgi-recommendation-4-on-climate-finance-guidance-note-on-climate-finance-debt-securities-final.pdf_