Transition Bonds

Second-Party Opinion for your Transition Bond

Why is transition financing important?

Achieving international climate goals will require significant reduction of GHG emissions from carbon-intensive sectors. To date, these sectors have not been the focus of green finance and low-carbon solutions are generally not yet available at scale due to major technological and/or systemic barriers. Those are commonly referred to as transition sectors. While international climate goals are defined at the level of the economy as a whole, achieving climate goals requires the decarbonization of economic activities. Due to a distinct set of challenges and barriers for each economic activity, the transition pathway differs across different industries.

Benefits of Transition Bonds

Use-of-proceeds bonds are emerging as an important instrument to finance transition activities and projects. When supported by clear eligibility criteria and a credible transition strategy, transition bonds can facilitate a shift of a company’s business activities along a transition pathway compatible with long-term climate goals.

Key benefits for issuers of Transition Bonds:

  1. Investor diversification for sectors that have been traditionally excluded from the green market but have a key role to play in addressing climate change
  2. Enhance visibility of your bond, company and sustainability activities
  3. Reinforce your sustainability strategy through commitments to investors
  4. Increase investor dialogue and engagement that facilitates a better understanding of your business

Our Approach to Assessing Transition Bond Frameworks

Grounded in international science-based targets – Sustainalytics’ approach to assessing transition bond frameworks includes both issuance-level considerations and issuer-level considerations. For this, Sustainalytics developed detailed criteria for transition-eligible activities.



  1. Use of proceeds: Alignment of financed business activities and projects with Sustainalytics' transition eligibility criteria
  2. Project evaluation and selection
  3. Management of proceeds
  4. Allocation and impact reporting



  1. Alignment of issuer's transition strategy and commitments with internationally established decarbonization pathways
  2. Alignment of the use of proceeds with the issuer's strategy and implementation plan

Advantages of Second-Party Opinions

A Second Party-Opinion of your transition bond framework ensures that your bond is in line with market expectations and industry best practices. An SPO gives investors confidence in your transition bond issuance.

Independent Opinion that provides additional assurance to investors

Support issuers in positioning favourably in the market and widen their investor base

Align with market best practices

Our Second-Party Opinion process

Our framework evaluation process is simple yet thorough. We work closely with you to understand your sustainability objectives, your projects and your processes and ensure they align with transition pathways.

Framework review

In advance of kick-off, the Sustainalytics team will review the issuer’s Framework.

In this review, Sustainalytics will add clarifying questions to the framework document in order to better understand the intent of the framework.

These questions and comments will be discussed during the kick-off call.

Kick-off Meeting

Understand issuer’s bond and sustainability objectives.

Understand eligibility criteria and eligible projects (scope).

Understand management and reporting process.

Identify relevant documents for evaluation.


Evaluate use of proceeds, eligibility criteria and eligible projects.

Evaluate process of management of proceeds.

Evaluate KPIs and reporting process and frequency.

Review Issuer’s sustainability reporting and targets.

Draft and opinion.


Provide draft document to issuer.

Provide draft document to Sustainalytics´ Sustainability Bonds Internal Review Committee (IRC).

Receive feedback from issuer.

Incorporate feedback and send to IRC.

Set up follow-up call if required.

Final Document

Finalize evaluation and opinion.

Receive issuer sign-off.


Provide support to market your bond issuance at your roadshows, and investor meetings.

Utilize our online assets to market your bond issuance.

Connect with our team

Americas -
Sustainalytics US Inc.

4 World Trade Center, Floor 48, 150 Greenwich Street, New York, NY 10007, United States
 +1 347 630 9308

Sustainalytics UK Limited

29 1 Olivers Yard, 55-77 City Road, London, EC1Y1HQ, United Kingdom
+44 20 4526 5640

Japan -
Sustainalytics Japan Inc.

Hibaya Building, 6F 1-1-1, Shinbashi, Minato-Ku Tokyo, 
105-0004, Japan
+813 4567 0198

Sustainalytics Singapore

336 Smith St, #04-309, 050336

+65 6329 7596