PRM 4.7 Disclosure requirements for sustainability-labelled non-equity securities

An issuer of non-equity securities must include in the prospectus a statement as to whether the non-equity securities are:

(1) marketed as green, social, sustainable or sustainability-linked; or

(2) issued under a bond framework or equivalent document on green, social, sustainable or sustainability-linked financing published by the issuer, a subsidiary of the issuer or an entity in the issuer's group.

Where a statement referred to in PRM 4.7.1R is included in the prospectus, consideration must be given as to what further supporting information is required to satisfy PRM 2.1.1R (Necessary information). That information may include the items referred to in PRM 4.7.3G to PRM 4.7.5G.

Where a bond framework or equivalent document on green, social, sustainable or sustainability-linked financing in respect of the non-equity securities being issued is available, further relevant information may include details of: 

(1) where the document may be inspected (website or other location);

(2) the standards and/or principles according to which the document has been prepared;

(3) whether any external review or assessment of the bond framework or equivalent document has been performed; and

(4) where the external review or assessment referred to in (3) may be inspected (website or other location).

Where the non-equity securities are use-of-proceeds bonds – that is, non-equity securities whose proceeds are used for financing projects that entail green, social and/or sustainability considerations – further relevant information may include details of: 

(1) the eligible projects that are expected to be financed or refinanced, in part or in full, with the proceeds of the non-equity securities, including, in the case of refinancing:

     (a) the maximum proportion of proceeds that is expected to be allocated to financing new projects;

     (b) the proportion of proceeds that will be allocated to refinancing existing projects; and

     (c) the expected look-back period – that is, the number of previous years that the issuer will look back to for the refinanced projects;

(2) the project evaluation prior to the issue of the use-of-proceeds bonds, including:

     (a) the objectives of the eligible projects;

     (b) where known, risks specifically associated with the eligible projects and related mitigation measures, or, where the risks are unknown, the processes by which the issuer identifies, manages and mitigates them; and

     (c) the criteria, metrics or performance indicators used to evaluate and select the projects and the process and methodology by which the evaluation and selection is conducted;

(3) where any external review or assessment regarding the alignment of the bond to the standards or principles referred to in PRM 4.7.3G(2) can be found, if any; 

(4) the approach and methods for managing the proceeds of the non-equity securities, including temporary management;

(5) any post-issuance external review or assessment of the projects, where arranged or intended to be arranged, including:

     (a) the areas of focus of the review or assessment;

     (b) the relevance of the review or assessment by reference to the green, social and/or sustainable characteristics of the non-equity securities; and

     (c) the persons responsible for the post-issuance review or assessment; and

(6) the approach to reporting on the impacts of the eligible projects including:

     (a) the location of the reporting or where it may be inspected; and

     (b) how frequently such reporting will be updated.

Where the non-equity securities are securities whose structure or financial terms link to sustainability-related metrics (‘sustainability-linked bonds’), further relevant information may include an explanation of how any relevant targets, metrics or indicators, including Key Performance Indicators (KPIs) and Sustainability Performance Targets (SPTs), have been selected, by reference to:

(1) the process and rationale for their selection;

(2) methods for computing the Key Performance Indicators (KPIs) and their measurability, verifiability and ability to be benchmarked; and 

(3) the materiality and alignment of the relevant Sustainability Performance Targets (SPTs) with the issuer’s overall sustainability and business strategies.