IFSCA releases consultation paper seeking comments on draft circular on "Principles to mitigate the Risk of Greenwashing in ESG labelled debt securities in the IFSC" - Treelife     Search for:

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[Home](https://treelife.in) &gt; [News](https://treelife.in/category/news/) &gt; IFSCA releases consultation paper seeking comments on draft circular on “Principles to mitigate the Risk of Greenwashing in ESG labelled debt securities in the IFSC”

# IFSCA releases consultation paper seeking comments on draft circular on “Principles to mitigate the Risk of Greenwashing in ESG labelled debt securities in the IFSC”

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###### Published on

##### October 9,
2024

###### Last updated on

##### February 20, 2025
13:59

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Blog Content Overview

- [1 What is “Greenwashing”?](#What_is_8220Greenwashing8221)
- [2 IFSCA’s Consultation Paper: Mitigating Greenwashing](#IFSCA8217s_Consultation_Paper_Mitigating_Greenwashing)

IFSCA listing regulations requires debt securities to adhere to international standards/principles to be labelled as “**green**,” “**social**,” “**sustainability**” and “**sustainability-linked**” bond.

As of September 30, 2024, the IFSC exchanges boasted a listing of approximately USD 14 billion in ESG-labelled debt securities, a significant chunk of the total USD 64 billion debt listings in a short period. This rapid growth highlights the growing appetite for sustainable investments among global investors.

Certain investors, particularly institutional ones like pension funds and socially responsible investment (SRI) funds, explicitly state in their investment mandates that they can only invest in ESG-labeled securities. To encourage and promote ESG funds, the IFSCA has waived fund filing fees for the first 10 ESG funds registered at GIFT-IFSC, to incentivize fund managers to launch ESG-focused funds.

However, this rapid growth also comes with a significant risk of “greenwashing” where companies or funds exaggerate or falsely claim their environmental and sustainability efforts.

## What is “Greenwashing”?

However, with this rapid growth comes a significant risk: greenwashing. Greenwashing occurs when companies or funds exaggerate or fabricate their environmental and sustainability efforts to project a greener image and attract investors. It’s essentially a deceptive marketing tactic that undermines the true purpose of sustainable investing.

## IFSCA’s Consultation Paper: Mitigating Greenwashing

Recognizing the threat of greenwashing, the IFSCA has released a consultation paper seeking public comment on a draft circular titled “Principles to Mitigate the Risk of Greenwashing in ESG labelled debt securities in the IFSC.” This circular outlines principles that companies and funds issuing ESG-labelled debt securities on the IFSC platform must adhere to.

Refer link for consultation paper: <https://ifsca.gov.in/ReportPublication?MId=8kS3KLrLjxk=>

[ Read as Markdown](https://treelife.in/news/ifsca-releases-consultation-paper-seeking-comments/?format=markdown)

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