Sustainable finance
Green Bond External Review
The independent assessment recommended by the ICMA Green Bond Principles — through second party opinions, verification, certification, or scoring — confirming a bond's alignment with its green framework.
Definition
Green bond external review is the independent assessment of a green bond or its framework, recommended by the ICMA Green Bond Principles to promote integrity in the market. Review types defined under the Principles include second party opinions, verification, certification, and scoring or rating; ICMA's Guidelines for External Reviewers set voluntary professional, ethical, and disclosure standards for providers, and recommend reports be made publicly available at or before issuance.
References
Overview
What it means
A green label is a claim; external review is what substantiates it. A second party opinion assesses framework alignment before issuance; verification confirms allocation of proceeds afterwards; certification attests conformity with a recognised standard such as the Climate Bonds Standard. The practice is the market's main defence against greenwashing in labelled debt.
How it is used
Issuers commission reviews from specialised providers; investors read them in due diligence; and regulators — for example under the European Green Bond Standard — increasingly make external review mandatory rather than voluntary.
Why it matters
Trust in the green bond market rests on credible, independent assessment of whether money labelled green does green things. **Note:** Drafted from workbook row 1257 (Green bond verification); covers the full external-review family of which verification is one type.
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