The senior lender is in, the solar park SPV has its permits, and a family office on your investor list asks one question before it commits: is this bond green, and where does it say so? If your honest answer is "in a document we have not written yet", this guide is for you.

Think of the green bond framework as the term sheet of the green claim. The term sheet fixes what the investor gets; the framework fixes what the money does, and every later report is checked against it. If you raise money through a direct placement of your own bonds, the framework sits next to the term sheet and the offer documents.

What is a green bond framework, and do you need one?

A green bond framework, sometimes called a green financing framework, is the document in which an issuer explains how bond proceeds are used, selected, kept apart and reported, following the ICMA Green Bond Principles (June 2025 edition). Those principles, published by the International Capital Market Association, are voluntary guidelines. They rest on four core components: use of proceeds, the process for project evaluation and selection, management of proceeds, and reporting. They also recommend that issuers publish a green bond framework and get an external review.

So the framework is market practice. The EU's own green bond rulebook, covered further down, asks for a factsheet and a positive pre-issuance review by an external reviewer, and the Commission's Q&A treats the factsheet as separate from any framework. That holds whether a bank places your bond or you sell it to your own investors. If that second route is new to you, see how a self-issuance works.

In practice you still need one, because investors asked to accept the word "green" want a document they can check. In this post, a green bond means a bond issued under the ICMA principles, and the EU label means the European Green Bond designation under that EU rulebook.

What goes into a green bond framework?

A green bond framework for one project has six parts: issuer and sustainability strategy, use of proceeds, project evaluation and selection, management of proceeds, reporting, and external review. Each part below says what to include, with a short solar park example. Here is the template, part by part.

The solar park in the examples is invented: one SPV building a 20 MWp ground-mounted park, financed with senior bank debt and a subordinated green bond sold to its own investors.

Green bond framework template at a glance

Use the six questions as the outline of your own framework. Each part is explained below with the solar park example.

1. Issuer and sustainability strategy

The strategy section says who issues the bond and why a green bond fits the issuer's plans. Name the issuer and its owner, sum up the sponsor's climate or energy strategy in two or three sentences, and state the project's environmental objective. Only mention targets the sponsor has actually adopted. A solar park SPV, for instance, would name its owner, a regional energy developer, point to that developer's published target for new renewable capacity, and give climate change mitigation as the project's objective.

2. Use of proceeds

Use of proceeds says exactly what the money pays for: the eligible category, the asset with its location and capacity, whether the bond finances new spending or refinances past spending, and what share of the project cost it covers. The ICMA categories include renewable energy, energy efficiency and green buildings. A solar or wind SPV falls under renewable energy, like the projects behind citizen energy financing for solar parks. In our example, the bond pays for building the 20 MWp park and connecting it to the grid, next to senior bank debt and equity from the sponsor.

3. How projects are evaluated and selected

This section records why the project qualifies and who decided: who signed off, on which criteria and documents, and how you manage the project's environmental and social risks. In our solar park example, the managing directors sign off once the building permit, the grid connection agreement and the environmental assessment are in place, and the main risks named are land use and where the solar modules come from.

4. How the money is kept apart

Management of proceeds shows that the bond money pays for the green project and nothing else. Say where the money sits until it is spent, how you match each payment to the project, and where unspent money is parked. A separate construction account makes this simple: the solar park SPV matches each contractor invoice against that account, and money not yet spent sits in cash or short-term deposits.

5. Reporting

Reporting commits you to telling investors where the money went and what it achieved. The ICMA principles recommend an allocation report at least once a year until all the money is allocated. Add impact figures you can measure from your own data, explain how you calculate them, and say where investors will find the reports. The solar park SPV, for instance, reports construction spending in the first year. Once the park runs, it adds installed capacity, generation from the park's meter and estimated avoided emissions, with the method behind each number.

6. External review

The external review names who checked the framework and what they will check later. Say who the reviewer is, what type of review it is, where it is published, and whether the allocation is checked after issue. ICMA's Guidelines for External Reviews (June 2026 edition) list three of the most commonly used types before issue: a second party opinion from an institution with environmental expertise that is independent of the adviser on your framework; a certification against the criteria of a recognised external green standard or label, usually by an accredited third party; and a limited or reasonable assurance engagement, usually by an audit firm. After issue, the ICMA principles recommend that an external auditor or other third party checks how the proceeds were tracked and allocated. Under the EU label you choose only from reviewers registered with ESMA, the EU securities markets authority. A solar park SPV can publish a second party opinion on its website next to the framework, and have an auditor check the construction account once all the money is spent.

What changes if you use the EU Green Bond Standard?

Using the EU label under the voluntary EU Green Bond Standard (also called the European Green Bond Standard) adds legal conditions that a green bond under the ICMA principles does not carry, from Taxonomy-aligned proceeds to a published prospectus.

Under the EU Taxonomy Regulation, an activity counts as environmentally sustainable if it contributes substantially to at least one of six environmental objectives, does no significant harm to any of the others, meets minimum safeguards and passes technical screening criteria.

Green bond under the ICMA principles and the EU label, as of November 2026

The prospectus row matters most for a project issuer. Whether your offer would need a prospectus anyway is covered in our overview of EU prospectus and capital-raising rules.

Under the label, a reviewer checks your factsheet before the issue and your final allocation report once the money is allocated. The factsheet follows a fixed form in Annex I of the regulation, which includes the environmental strategy and rationale, the intended allocation of proceeds, the expected environmental impact, reporting and, where applicable, a CapEx plan. A good framework already holds much of that content.

Green bond or sustainability-linked bond: which fits your project?

A green bond fits a project, and a sustainability-linked bond fits a company. A sustainability-linked bond, under ICMA's separate principles (June 2024 edition), has financial or structural terms that change depending on whether the issuer meets sustainability targets set in advance, and its money can go to general purposes.

Is a green bond worth it for a smaller issuer?

A green bond under the ICMA principles can be worth it for a smaller issuer; the EU label is the harder case. If you raise under a prospectus exemption (for one national example, see what changed for self-issuance in Germany), the EU label would need a prospectus you would not otherwise publish. You may publish one voluntarily, but for a single project bond that is a large step, so the ICMA route is the realistic one.

The ICMA route still takes work: the framework, an external reviewer, payment tracking and yearly allocation reports. A well-run SPV already holds most of that data, and a second SPV reuses the structure, the reviewer and the reporting format.

What you get back depends on your investor list. Family offices or funds with sustainability commitments get a document to test your claim against. Do not count on a cheaper coupon. Pricing data from the Climate Bonds Initiative (published September 2023) only covers euro and dollar bonds of at least USD 500 million: in the first half of 2023, 16 of the 50 green bonds in its sample priced on or inside their own yield curve, in line with its average since 2016. We found no comparable data for a single project bond sold to your own investors. If you are still choosing between a self-issuance, a bank placement or a listing, compare the three ways to issue securities first.

What happens once your framework is ready?

Publish the framework with its external review, then issue the bond. The issue itself follows our guide on how to issue a bond without a bank, and green bond issuance adds four steps around it:

1. Write the six parts for your own project, starting from the examples, and have your legal advisers read the result.

2. Commission the external review and publish it next to the framework.

3. Prepare the offer documents your route needs, referring to the framework.

4. Set up allocation tracking before the first euro arrives.

ONINO provides digital bond issuance software for issuing to your own investors, with licensed partners handling the regulated steps. The framework, the review and any prospectus stay with you and your advisers.