Frozen and Fragmented: The Green Bond Framework Problem

Green bonds are widely seen as the blueprint for credible sustainable finance. But for instruments that market themselves as forward-looking, the underlying frameworks they rely on are often static. Even when updated, these frameworks exist within a fragmented ecosystem of overlapping principles and inconsistent disclosures. 

Our review of 222 green bond frameworks reveals two core issues: most issuers rarely update their frameworks, and those that do often layer on multiple overlapping principles without clear rationale. These two dynamics - stagnation and fragmentation, reduce transparency and make it harder for investors to assess credibility. In a market that depends on clarity and comparability, both trends introduce unnecessary friction. 

The Framework Freeze 

Out of 222 frameworks we reviewed, nearly 60 issuers have never updated their green bond documentation. Only 18 issuers have made three or more updates. A large number haven’t changed anything in over three years—despite the rise of the EU Taxonomy, new ICMA guidance, increasing investor scrutiny, and the broader shift toward real-world outcomes. 

When frameworks are static, they fall out of sync with what matters. Emerging themes like climate resilience, circular economy, and biodiversity remain missing. Regulatory shifts like CSRD or EU GBS are left unacknowledged. Rather than becoming sharper and more relevant over time, many frameworks still rely on standards written in 2018 or earlier. 

Fig 1: Frameworks - One and done

Fragmentation Without Direction 

Even where frameworks have evolved, the direction of that evolution is all over the place. We see issuers referencing five or more different principles in a single document. There’s ICMA 2021, ASEAN Green Bond Standards, EU Taxonomy, LMA guidance, and Social or Sustainability-Linked Bond principles - often combined without clarity on which applies to what. 

Some issuers cite alignment with ICMA 2018, and just a few paragraphs later mention technical screening criteria under the EU Taxonomy. Others layer on voluntary frameworks without ever explaining how they interact or why they matter.   Third-party assurance is often positioned as a core pillar of green bond credibility, but when we look at post-issuance impact reports, the follow-through is inconsistent. Roughly one in three issuers don’t disclose who, if anyone, verified their post-issuance claims. Among those that do, the field is dominated by a handful of players (ISS ESG, DNV GL, EY) suggesting concentration rather than broad uptake. The rest simply don’t report. In a space that relies on trust and transparency, this kind of silence does more harm than one would first assume. The lack of reporting or follow up undermines the seriousness of intent for issuers of green bonds.  

The end result is a landscape that gives the illusion of rigour but often lacks a coherent basis for comparison. 

Fig 2: Inconsistent verification is still seen as a nice to have

Why This Matters 

When frameworks are both frozen and fragmented, they become harder to trust. Investors don’t have a clear way to benchmark, compare, or validate what they’re buying and issuers, especially repeat ones, are left navigating an increasingly complex set of compliance expectations without a practical blueprint. The idea that green bonds represent leading practice, now starts to lose weight. 

What We’re Doing at SFI 

At SFI Data, we’re working on a few solutions to make this simpler and more transparent. One feature of our service includes a framework freshness tracker that shows when an issuer last updated their document, what principles they align with, and how that compares to market peers. We’re also tracking third-party assurance coverage across issuers to highlight gaps between stated verification intent and actual disclosure. 

The green bond market doesn’t need more principles, it needs better audits, updated frameworks, verifiable outcomes that hold up under scrutiny. In today’s market, with rising interest rates, tighter capital, and growing skepticism around ESG labelling, green bonds are entering a more scrutinized phase. Investors are no longer just asking what’s green, they’re asking how do you know? A missing or unverified assurance trail raises further doubts.  To maintain trust and attract capital in this environment, issuers will need to move beyond legacy documents and deliver frameworks that are current, clean, and credible.