Sustainable Debt Instruments Approved by Saudi CMA

Riyadh, Saudi Arabia—The Capital Market Authority (CMA) has approved new guidelines for issuing sustainable debt instruments in Saudi Arabia. These include green, social, sustainable, and sustainability-linked bonds aligned with Saudi Vision 2030 and the Financial Sector Development Program. The guidelines took effect on May 27, 2025.

A Key Milestone for Saudi Capital Markets

The CMA stated that this move supports the national sustainability strategy developed by public and private stakeholders under the Ministerial Committee for Corporate Sustainability Strategy. It also aligns with the CMA’s 2024–2026 strategic plan to deepen the sukuk and debt markets and boost local issuances.

While non-binding, the guidelines encourage transparency. Issuers of these instruments in Saudi Riyals must disclose any deviations from the guidelines within their offering documents. The CMA clarified that this framework does not replace existing regulations but complements them.

Four Defined Categories of Sustainable Instruments

The new framework outlines definitions for four categories:

  • Green bonds: Fund projects with positive environmental outcomes.
  • Social bonds: Finance initiatives that deliver social benefits.
  • Sustainable bonds: Support projects with both social and environmental impact.
  • Sustainability-linked bonds: These bonds link financing terms to the issuer’s broader ESG performance, even if proceeds are used for general purposes.

Surge in Global and Local Sustainability Activity

Globally, sustainability-linked assets reached USD 3.52 trillion by the end of 2024, up nearly 93% since 2020. Green bond issuances alone surpassed USD 580 billion last year. In Saudi Arabia, sustainability disclosures by listed companies climbed to 94 in 2024 from 81 in 2023. Among the top 100 listed firms, 65% now disclose sustainability practices.

Supporting Market Growth and Investor Confidence

By encouraging ESG-linked financing, the CMA aims to expand financing channels, build investor confidence, and enhance Saudi Arabia’s environmental and social leadership. Investors are expected to benefit from returns while contributing to sustainable development goals.

The CMA emphasized that improved transparency and consistent disclosure will help align the Kingdom’s capital markets with global sustainable investment trends.