The International Organization of Securities Commissions has published a consultation paper on the global sustainable bond market, setting out product characteristics, market trends, key risks and how member jurisdictions oversee issuance and disclosure. It also proposes a set of non-prescriptive “key considerations” intended to help regulators address risks specific to sustainable bonds relative to traditional debt instruments. The report notes that cumulative issuance of green, social, sustainability and sustainability-linked bonds exceeded USD 5.7 trillion in 2024, and that sustainable bonds account for around 14% of private-sector bond issuance excluding government securities. It distinguishes sustainable bonds by funding mechanism into use-of-proceeds bonds and sustainability-linked bonds, and reviews market practices and vulnerabilities identified through IOSCO research, a 2024 survey of 42 member authorities and engagement with market participants, including risks linked to greenwashing, inconsistent terminology and metrics, varied post-issuance reporting, potential conflicts of interest and costs associated with external reviewers, unclear consequences for failing to meet stated sustainability goals, and liquidity and regulatory uncertainty concerns. The key considerations focus on improving clarity in regulatory frameworks, strengthening classification and mapping of bond types, enhancing ongoing transparency and accountability, promoting independent and credible external reviewers, and expanding capacity building and knowledge sharing to support market development. IOSCO states the paper is issued for public consultation and has not been approved by the IOSCO Board.

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