Regulation for Second Party Opinion (SPO)

2 members

ESG Bonds usually (but not always) bring a Second Party Opinion, which can be essentially useful both for investors interested in buying the bonds, and for the company itself to understand the stage of development of its practices. It so happens that SPOs are currently not regulated, even though their content may be relevant to the risk of SLB.

Collaboration details

We would like objective suggestions for a project to regulate ESG credit rating activity, specifically the Second Party Opinion (SPO) for the different types of ESG Bonds. This includes testimonials, real cases, relevant documentation, scientific research results, examples of regulatory efforts, and other ways to inspire the writing of a regulatory proposal that can accelerate the development of the ESG Bonds market, via better communication of the factors of market risk in credit ratings and SPO reports. In Sustainable Linked Bonds (SLBs), for example, the coupons paid to investors are defined by sustainability targets (Sustainable Performance Targets-SPTs). Such goals are sensitively discussed in the content of the SPOs, which in turn have not been standardized, or even can be provided by a wide range of entities external to the regulated environment of the capital market. This can represent an important risk that can be addressed through regulation.

Objectives

(1) Build a regulation proposal for the evaluation of Second Party Opinion (SPO) dedicated to ESG Bonds in an emergin market.

(2) Collaborate for the development of the ESB Bonds market, through the promotion of quality and standardization of ratings and opinions made available to the market.

(3) Collaborate to discipline the Second Party Opinion assignment activity.

Created on
ESG theme
  • Environment
  • Social
  • Governance
ESG sub-theme
  • Anti-corruption
  • Biodiversity and ecosystem services
  • Climate Change
  • Cyber security
  • Disclosure
  • Emissions reduction
  • Governance
  • Water
Sector
  • Energy
  • Financials
  • Industrials
  • Materials
  • Stakeholder
  • Utilities
Sustainable Development Goal
  • 1 - No poverty
  • 2 - Zero hunger
  • 3 - Good health & well-being
  • 4 - Quality education
  • 5 - Gender equality
  • 6 - Clean water & sanitation
  • 7 - Affordable & clean energy
  • 8 - Decent work & economic growth
  • 9 - Industry, innovation & infrastructure
  • 10 - Reduced inequalities
  • 11 - Sustainable cities & communities
  • 12 - Responsible consumption & production
  • 13 - Climate action
  • 14 - Life below water
Geography
  • Brazil
Asset class
Fixed Income
Asset class subcategory
  • Asset-backed securities
  • Corporate (financial)
  • Corporate (non-financial)
  • Environmental & social themed investing