What is a sustainability bond in India and which SEBI rules apply to it?

A sustainability bond funds a mix of eligible green and social projects. SEBI's June 2025 framework makes the issuer meet both rule sets: the green debt disclosures in Chapter IX of the NCS Master Circular and the social bond disclosures in Annexure A, with an independent reviewer and the anti-purpose-washing duties.

The definition

SEBI defines a sustainability bond as a debt security whose proceeds finance or refinance a combination of eligible green projects and social projects, as defined for green debt securities and social bonds respectively. Social bonds, sustainability bonds, sustainability-linked bonds and green debt securities together make up ESG debt securities under Regulation 2(1)(oa) of the NCS Regulations.

Choosing the label

SEBI recognises that social projects can have environmental co-benefits and green projects social co-benefits. The issuer decides whether the bond is green, social or sustainability based on the primary objective of the underlying projects.

Disclosures that apply

• Everything required for green debt securities: environmental objectives, project eligibility, proceeds tracking, refinancing split, risk mitigation, and post-issue impact reporting and BRSR elements.
• Everything required for social bonds: social objectives and target population, social risks, and project-level social impact reporting.
• External auditor verification of the use of proceeds, and unutilised money reported per ISIN.

Issuer responsibilities

• Keep a decision process that checks projects remain eligible.
• Make sure every funded project meets the documented objectives and use proceeds only for the stated purpose.
• Follow the purpose-washing rules: monitor real impact, quantify negative externalities and never imply a certification that does not exist.

What Senseible does here

Senseible supplies energy and emissions records for MSME sites, which can support the green half of impact reporting. It does not review or label bonds.

• SEBI social bond categories
• SEBI rules for green debt securities
• Which standards an ESG bond can follow

Sources: SEBI circular, Framework for ESG Debt Securities (other than green debt securities), 5 June 2025, SEBI circular, Revised disclosure requirements for issuance and listing of green debt securities, 6 February 2023 (now Chapter IX of the NCS Master Circular)

Last reviewed 2026-10-23.