In a historic move for Indian corporate finance, Larsen & Toubro (L&T) has issued a ₹500 crore ESG (Environmental, Social, and Governance) bond, becoming the first Indian company to do so under SEBI’s newly introduced ESG framework. This milestone not only marks L&T’s deep commitment to sustainability but also sets a strong precedent for other Indian corporations.
SEBI’s New ESG Framework: A Game-Changer for Responsible Investing
On June 5, 2025, the Securities and Exchange Board of India (SEBI) launched a comprehensive ESG and sustainability-linked bond framework aimed at ensuring transparency, accountability, and purpose-driven fundraising in the corporate sector.
Key Highlights of SEBI’s ESG Guidelines:
- Mandatory public disclosure of sustainability goals
- Third-party external reviews, including Second-Party Opinions (SPOs)
- Defined Key Performance Indicators (KPIs) and environmental targets
- Post-issuance impact reporting to avoid “purpose-washing”
This move by SEBI aligns with global standards and aims to push Indian companies toward authentic ESG compliance rather than symbolic participation.
L&T’s Sustainability Goals: Leading by Example
As part of the ESG bond deal, L&T has made firm commitments to reduce its greenhouse gas emissions and freshwater withdrawal intensity. These targets are aligned with its broader goals of:
- Achieving water neutrality by 2035
- Becoming carbon neutral by 2040
“This ESG bond issuance reflects our long-term commitment to sustainable development and responsible corporate governance,” said a senior L&T official.
HSBC’s Role: Sole Lead Arranger in a Landmark Deal
HSBC India has acted as the sole lead arranger for this landmark ₹500 crore transaction. The bank reiterated its focus on supporting India’s clean energy transition and facilitating ESG-aligned growth across sectors.
“We’re proud to partner with L&T in this groundbreaking issuance that supports India’s sustainable finance ecosystem,” said a spokesperson from HSBC India.
What This Means for India’s Sustainable Finance Ecosystem
L&T’s bond issuance is more than just a corporate announcement—it symbolizes a larger movement towards sustainability-driven capital markets in India.
Why this matters:
- Encourages ESG investing and attracts green capital
- Boosts corporate accountability in sustainability goals
- Sets a benchmark for future ESG-linked financial instruments
As India advances its climate and development goals, such initiatives will be crucial in mobilizing private sector participation.
🔗 know more:
L&T Announces India’s First Listed ESG Bond Deal in Partnership with HSBC (MSN.com)
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