How to Apply for Green Bond Indices: Step by Step Guide

How to apply for green bond indexes

Green bonds have become a powerful financial instrument for funding environmentally sustainable projects. As this market expands, issuers and asset managers alike are increasingly interested in having their bonds included in green bond indices, benchmarks that enhance visibility, attract ESG conscious investors, and validate the “green” credentials of their instruments.

But how exactly can you apply for inclusion in a green bond index? Below, we break down the step-by-step process, the criteria typically required, and key tips to navigate this important milestone in sustainable finance.

1. Understand What a Green Bond Index Is

A green bond index is a curated portfolio of bonds that meet specific environmental and sustainability criteria. These indices are often maintained by major financial institutions and data providers such as:

• Bloomberg MSCI Green Bond Index;
• ICE BofA Green Bond Index;
• S&P Green Bond Index;
• Solactive Green Bond Index;
• J.P. Morgan Green Bond Index.

Each index has its own eligibility criteria, review cycles, and application processes, but all aim to track the performance of bonds financing projects with positive environmental impacts.

2. Issue a Green Bond in Compliance with Standards

Before you can apply for inclusion, your bond must meet the basic definition of a green bond. This typically means:

• Funds are exclusively used for green projects (e.g., renewable energy, clean transportation, sustainable water management);
• The issuer follows the Green Bond Principles (GBP) or similar frameworks;
• There is transparency on use of proceeds, project selection, and reporting.

Most green bond indices require issuers to obtain a Second Party Opinion (SPO) or external verification from agencies like Sustainalytics, ISS ESG, CICERO, or Moody’s to confirm the bond’s green credentials.

3. Choose the Index You Want to Be Included In

Different indices focus on different regions, types of issuers, or green standards. For example, the Bloomberg MSCI Green Bond Index targets global investment-grade green bonds with external reviews.

The S&P Green Bond Index includes both investment grade and high yield green labeled debt. Some local or thematic indices (e.g., China Green Bond Index or Climate Bonds Initiative Index) focus on specific environmental goals.

Be sure to study the methodology document of your target index to check alignment with their criteria.

4. Contact the Index Provider

Reach out to the index provider, either directly or through your underwriter or legal advisor, with a formal request for review. Some providers offer online portals or forms for submission, while others may require email communication.

For example:

• Bloomberg has a Green Bond Index Request Form;
• S&P Global may request that you engage through their ESG services contact;
• The Climate Bonds Initiative (CBI) also provides guidance for bonds to be listed on their database and indices.

5. Wait for Review and Index Committee Decision

After submission, the index provider will review your bond’s documentation. This review may take days to several weeks, depending on:

• The volume of applications
• Complexity of the bond structure
• Clarity and completeness of documentation

Some providers may request additional clarification or documents. Once the review is complete, the bond may be either accepted, rejected, or placed under further observation.

7. Monitor Ongoing Compliance

Inclusion in a green bond index is not permanent by default. Many indices regularly review the eligibility of included securities. If your bond loses its green credentials, e.g., if reporting lapses or use of proceeds deviates, it may be removed from the index. Check out more details below!

• Annual use-of-proceeds reporting;
• Impact assessments or sustainability KPIs;
• Transparency updates to stakeholders.

These measures are essential for fostering a more inclusive financial environment while reinforcing investor trust in the long term.

Conclusion

Applying for inclusion in a green bond index is a strategic move that can significantly elevate your bond’s profile, attract new types of investors, and reinforce your organization’s commitment to sustainability.

By following a clear, step-by-step process, and maintaining transparency throughout, you can successfully navigate this growing area of sustainable finance.

Written by

Juliana Raquel