Highlights

• New Climate Transition Bond Guidelines introduce a distinct label for funding decarbonisation projects tied to the Paris Agreement.
• The Climate Transition Finance Handbook now includes transition-plan frameworks and assessment methodologies.
• The announcement was made at the 2025 Annual Conference in Tokyo, co-hosted with the Japan Securities Dealers Association.

The Executive Committee of the Principles, supported by the International Capital Market Association (ICMA), introduced new guidance for Climate Transition Bonds at its Annual Conference.

The Principles function as a global reference point for the sustainable bond market, which has grown to about $6 trillion worldwide. The participants in the market include corporates, financial institutions, supranationals, agencies, and sovereign issuers that raise financing for climate and sustainability-related activities.

Read More: What is the Climate Bonds Initiative?

The new publication introduces the Climate Transition Bond Guidelines (CTBG). These Guidelines bring in the Climate Transition Bond (CTB) as a distinct label for use-of-proceeds bonds.

Under this label, raised funds go to Climate Transition Projects. Such projects relate to decarbonisation and emissions reduction objectives aligned with the Paris Agreement.

The scope of these projects extends past the usual categories associated with the Green Bond Principles (GBP), as it involves sectors with high emissions that need structural change.

Also Read: Green Bonds Explained: Definition, Types, Benefits & Risks

The Guidelines also include recommendations that apply to high-emission issuers releasing climate transition-themed Sustainability-Linked Bonds (SLBs).

Another updated resource, the Climate Transition Finance Handbook (CTFH), now refers directly to the new Climate Transition Bond Guidelines. It contains a new annex describing transition-plan frameworks and also mentions a range of tools and methodologies that can be used to examine whether transition plans align with long-term emissions reduction pathways.

A further resource, the Mapping of the Principles, has been released, giving a connected overview of how the various sets of guidance fit together within sustainable finance practice.

See Also: IOSCO Releases Five-Point Plan to Support Sustainable Bond Market Growth

The announcement took place during the 2025 Annual Conference of the Principles in Tokyo, co-hosted by the Japan Securities Dealers Association (JSDA).

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Source: ICMA