IRDAI notifies Categorisation and Classification of Sovereign Green Bonds


The Insurance Regulatory and Development Authority of India (IRDAI) has issued a notification on the categorisation and classification of Sovereign Green Bonds (SGrBs). The notification was issued on 16th January, 2023.

The following has been stated namely: –

The Central Government had proposed the issue of objective SGrBs in Budget 2022-23. The objective of the proposal was to reduce the carbon intensity of the economy. It is also intended to be a measure for achieving Nationally Determined Contribution (NDC) under the Paris Climate Change Accord, 2015 connected to climate change, mitigation, adaptation, finance, and preservation of the environment.

The issue of SGrBs would also bring about the following outcomes:

  • de-concentration and diversification of the infrastructure investment portfolio of the insurers,
  • enhanced participation in Environmental, Social, and Governance (ESG) initiatives,
  • proactive participation in sustainable development, and
  • prevent environmental degradation

Hence, insurers are encouraged to invest in SGrBs.

Additionally, the investment in Sovereign Green Bonds shall be treated as “Investment in Infrastructure” and shall be classified as “Central Government Securities”.

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