What is a second-party opinion?
A second-party opinion, or SPO, comes from an institution with sustainability expertise that is independent from the issuer. Under the ICMA Guidelines for External Reviews, it can assess a framework, programme or instrument before issuance against stated principles.
An SPO is one form of sustainable-finance external review. Certification tests an instrument against a named standard or label. Assurance states the level of testing performed, while verification checks a defined criterion or claim. A provider may also combine an assessment with a rating or score. Check the report's scope and conclusion before treating these services as interchangeable.
Why does a second-party opinion matter to you?
Investors and the banks arranging the deal use the opinion to see what the reviewer assessed, which principles it tested and where it found gaps. For a green bond, the reviewer may examine the eligible-project criteria, project-selection process, proceeds tracking and reporting plan. If part of the framework is missing, the reviewer may narrow the review's scope or record a limitation.
How does a second-party opinion work?
You give the reviewer the framework, eligible-project criteria, approval process, proceeds controls and reporting method. The reviewer sets its scope and methodology, tests the framework against the named principles, records limitations and issues an opinion. ICMA recommends publishing the report before or at issuance.
What mistakes should you avoid?
- Hiring the same adviser without checking independence or information barriers.
- Calling the opinion a certification, credit rating or guarantee of environmental results.
- Sending marketing claims without the policies, controls and project criteria behind them.
- Assuming a pre-issuance opinion replaces later allocation or performance verification.
Is a second-party opinion mandatory?
Not under the voluntary ICMA Green Bond Principles or Social Bond Principles, where pre-issuance external review is a key recommendation. It may still be required by the law, label or bond documents that apply to the deal, so check those separately.
What should you send to the reviewer?
Send the dated framework, the exact principles claimed, governance approvals, eligibility and exclusion criteria, proceeds or KPI controls, reporting method, source records and named contacts. Ask the reviewer to state its scope, methodology, independence and any limitations.