The Commercial Papers (CP) market has not experienced the same rapid development as the Green Bond market. However, due to an increased focus from investors, the CP market is now getting up to speed within the green and sustainable area.

There are a few alternatives available for Sustainable CPs. An issuing entity can either use ICMA’s Green Bond Principles (GBP) as a basis for both Green Bonds and Green CPs, or use the entity’s ESG rating from an external party as the starting point for establishing an ESG-based CP.

The first alternative assumes that the issuing entity has green assets or projects for which Green CP proceeds are earmarked. ESG-based CPs, on the other hand, can be issued by an entity that ranks within the higher range of the ESG performance scale. The company can then issue CPs as long as it maintains its rating.