When issuing a Green Bond, it is recommended that the issuer provides a "use of proceeds", "prior provision of information regarding project evaluation and selection process to investors", "management of proceeds", and "disclose" such information. It is also recommended that an external review of these measures is used if an objective evaluation is required.

❸ Management of Proceeds

The funds raised should be properly tracked and managed to ensure that they are allocated to Green Projects. Appropriate methods include the use of subaccounts and management of the balance of allocated funds by internal systems, etc. The issuer should also ensure that tracking controls are subject to internal controls, and as long as the Green Bonds are outstanding, the issuer should conduct periodical checks (at least yearly) to ensure that the amount allocated to Green Projects is equal to or greater than the amount raised by the issuance of Green Bonds or that the sum of the amount allocated to Green Projects and the amount of the unallocated proceeds matches the total amount of Green Bond proceeds.

Examples of possible proceed tracking and management methods

  • The Green Bond proceeds are credited to a subaccount that is financially separate from other accounts, and the proceeds are withdrawn from this account when allocated to Green Projects
  • Manage the total proceeds and the accumulated allocations to Green Projects via internal systems or electronic files and periodically adjust to ensure that the latter exceeds the former.
  • The Green Bond proceeds are credited to a separate account and managed separately from other business funds. When allocating the proceeds to Green Projects, the proceeds are taken out from the said separate account.

Prior provision of information to investors

Methods for tracking and managing of Green Bond proceeds
Management of unallocated proceeds
(In the case that projects to be allocated has not been decided, or the proceeds are temporarily unallocated because the timing of allocation has not yet arrived. Example: managing in safe and liquid assets such as cash or cash equivalents and short-term financial assets)