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Green or any other flavour - Issuing and listing a Corporate Bond

As companies look to take action on their environmental issues, capital may be needed to fund larger-scaled projects for committed environmental change. Companies have been turning to debt issuances for what is being termed as green bonds.

According to the International Capital Market Association (ICMA), green bonds are a debt instrument where the proceeds must be used to finance eligible1 green projects. Other types of ESG-related bonds include social bonds, where the proceeds finance social projects, and sustainability bonds, where the proceeds finance both green and social projects. They are also transition bonds, where typically the proceeds finance the lowering of GHG emissions within an organization.

Issuing a green or any other flavour of bond is an additional way to show commitment to ESG issues to stakeholders. It is likely we'll see growth in the issuance of green, sustainable, transition and social bonds in Canada, and any type of corporate bond can benefit from being traded and listed on our market.

For those specifically considering issuing and listing a green bond, we have outlined the process and benefits below, but also provided additional resources at the end for any other corporate bond issuance.

Steps to issue a green bond

1. Build a green bond framework

First, issuers must establish a green bond framework, for instance in accordance with the ICMA's Green Bond Principles (GBP). Frameworks should outline four core components:

  1. Use of Proceeds
  2. Process for Evaluation and Selection
  3. Management of Proceeds
  4. Allocation and Impact Reporting

2. Seek external review of framework

The ICMA recommends that issuers appoint an external review provider to confirm the alignment of their framework with the four core components listed above. In addition to an assessment of the alignment with a framework, a second-party opinion can include an assessment of the issuer's objectives, strategy, policy and/or processes relating to environmental sustainability, and the environmental features of the type of projects intended for the use of proceeds.

Issuers can obtain a second party opinion at a nominal one-time cost. A list of second-party opinions can be found within the Contributor Centre on our ESG 101 platform. Additional information on external reviews can be obtained from ICMA.

Companies can also decide if they wish to list their bond on Toronto Stock Exchange.

3. Why list on Toronto Stock Exchange?

Advantages to listing a bond on our Exchange:

  • Improved transparency and visibility for the bond and for the company
  • Improved trading liquidity for bondholders
  • Potential for more favourable terms in the following issuances, given the visibility into the use of proceeds
  • Improved access to retail investors

TSX Bond Listing Process and Cost further outlines steps and pricing for any bond type. Additionally, for more information on supplemental listings, see TSX Company Manual Sec. 623. Issuers who may not meet all the requirements are encouraged to reach out to TSX to discuss potential waivers.

4. Report use of proceeds

Issuers can appoint an institution (e.g. the audit firm they use for their financial statements), to provide an opinion on whether the use of proceeds is consistent with the framework at the end of each fiscal year.

Disclosure of the use of proceeds can be included in the company's Management Discussion and Analysis. Issuers are also encouraged to report on the expected environmental impacts as a result of projects to which green bond proceeds have been allocated. Specific guidance and reporting templates can be found here.


For more information on corporate bonds:

Read TSX Bond Listing Process and Cost

Listen to our Indebted to ESG podcast

Contact Valerie Douville at TSX for questions on bond listing


1 Green bonds are often verified by a third party, and examples include projects for renewable energy, energy efficiency, clean transportation, green buildings, and others.

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