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

Canonical: https://senseible.earth/answers/sebi-sustainability-bond-rules

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](https://senseible.earth/answers/sebi-social-bond-eligible-categories)
- [SEBI rules for green debt securities](https://senseible.earth/answers/green-debt-securities-sebi-requirements)
- [Which standards an ESG bond can follow](https://senseible.earth/answers/which-standards-can-an-indian-esg-bond-follow)

Sources: [SEBI circular, Framework for ESG Debt Securities (other than green debt securities), 5 June 2025](https://www.sebi.gov.in/legal/circulars/jun-2025/framework-for-environment-social-and-governance-esg-debt-securities-other-than-green-debt-securities-_94424.html), [SEBI circular, Revised disclosure requirements for issuance and listing of green debt securities, 6 February 2023 (now Chapter IX of the NCS Master Circular)](https://www.sebi.gov.in/legal/circulars/feb-2023/revised-disclosure-requirements-for-issuance-and-listing-of-green-debt-securities_67837.html)

Last reviewed 2026-10-23.