Saudi Arabia’s Capital Market Authority (CMA) has implemented new guidelines for issuing green, social, sustainable, and sustainability-linked debt instruments, effective from May 27, 2025. This initiative aligns with the CMA’s 2024–2026 strategic plan and supports the Financial Sector Development Program under Vision 2030.
The guidelines define four categories of debt instruments:
- Green Bonds: Proceeds allocated exclusively to projects with environmental benefits.
- Social Bonds: Funds directed towards projects with positive social outcomes.
- Sustainable Bonds: Financing projects that combine environmental and social objectives.
- Sustainability-Linked Bonds: Proceeds used for general purposes, with financial characteristics tied to the issuer’s sustainability performance targets.
While the guidelines are advisory, issuers of Saudi Riyal-denominated instruments, whether through public or private placements, must disclose any deviations from these guidelines in their issuance framework or offering documents. The CMA clarified that these guidelines do not modify existing regulatory rules or procedures.
The introduction of these guidelines aims to encourage local issuances and deepen the domestic debt market, thereby contributing to the financing of the national economy and supporting the achievement of the Financial Sector Development Program’s targets under Vision 2030.
Globally, sustainability-linked assets reached $3.52 trillion by the end of 2024, marking a 92.7% increase from 2020. Green bond issuance alone surpassed $580 billion in 2023. In the Saudi market, the number of listed companies disclosing sustainability practices rose to 94 in 2024, up from 81 in 2023. Among the top 100 listed companies, the sustainability disclosure rate increased to 65% in 2024, compared to 58% the previous year.
