Mumbai, August 18th, 2025: ICRA ESG Ratings Limited has launched Second Party Opinion (SPO) to provide independent assessment of an issuer’s ESG debt framework. By evaluating the framework’s alignment with global standards and the credibility of its sustainability claims, SPOs aim to enhance transparency, mitigate greenwashing risks, and build investor confidence.
In a rapidly evolving financial landscape where sustainability and transparency are paramount, SPOs serve as a critical tool to ensure that ESG-labelled instruments are credible, impactful, and aligned with global best practices.
SEBI in its circular issued in June 2025 requires issuers of ESG debt securities in the form of social bonds, sustainability bonds, and sustainability-linked bonds to appoint independent third-party reviewers or certifiers. These reviewers will be responsible for verifying alignment with recognized standards, reviewing project selection criteria, and validating impact reporting and use of proceeds.
Commenting on the launch of the SPO, Sheetal Sharad, Chief Rating Officer, ICRA ESG Ratings, said, “By rigorously evaluating an issuer’s ESG framework— including its use of proceeds, governance mechanisms, and alignment with international standards—ICRA ESG helps issuers demonstrate the integrity of their sustainability commitments. SPOs also empower investors with the confidence that their capital is being directed toward genuinely sustainable initiatives, mitigating risks of greenwashing and enhancing trust in the ESG debt market.”
The total ESG debt issuance including green, social, sustainability, and sustainability-linked bonds and loans amounted to $15.6 billion in 2024[1]. The cumulative ESG-aligned debt volume reached $55.9 billion, a 186% increase since 2021[2]. An SPO is a one-time exercise specific to a debt financing framework and remains valid until any change in the said framework
“While green bonds remain the powerhouse of activity, accounting for 83% of total aligned issuance, the market is rapidly diversifying in terms of themes, instruments and issuer types. The market for Second Party Opinions in sustainable finance is expected to grow steadily, driven by increasing demand for transparency, credibility in ESG assessments, and evolving regulatory frameworks,” Sharad said.
