Engineering and construction conglomerate Larsen & Toubro (L&T) has announced a Rs 500 crore ESG bond issuance deal, becoming the first Indian corporate to do so under the Securities and Exchange Board of India’s (SEBI) newly introduced ESG and sustainability-linked bond framework. HSBC is acting as the sole lead arranger in this transaction. 

The issuance complies with SEBI’s regulatory framework, unveiled on June 5, aimed at enhancing transparency, accountability, and alignment with global ESG standards.

Key mandates under the framework include public disclosure of sustainability objectives, third-party external assessments such as Second-Party Opinions (SPOs), and post-issuance impact reporting. Issuers must also define Key Performance Indicators (KPIs) and environmental targets.

As part of the ESG bond deal, L&T has committed to reducing its greenhouse gas emissions and the intensity of freshwater withdrawal. These align with its long-term goals of achieving water neutrality by 2035 and carbon neutrality by 2040.

“We take pride in leading the transition to sustainable finance under SEBI’s new ESG framework,” said a senior spokesperson at L&T. “This bond issuance reinforces our commitment to responsible business practices and sustainable development.”

HSBC India welcomed the partnership, noting the importance of facilitating clean energy transitions and helping Indian corporates meet their sustainability ambitions.

“We are pleased to partner with L&T on the first INR Sustainability Linked Bond under SEBI’s guidelines, reinforcing our commitment to supporting the Clean Energy Transition in India.  We look forward to partnering with corporates across sectors looking to navigate the paths  toward their sustainability goals”, said HSBC India. 

L&T, a $30 billion multinational, operates in the fields of EPC projects, hi-tech manufacturing, and services across global markets.