In order to inform its work on the action plan: financing sustainable growth published in March 2018, the European Commission established a Technical Expert Group (TEG) on sustainable finance in July 2018. In action 2 of this action plan the Commission has requested the TEG to prepare a report on an EU Green Bond Standard (EU-GBS), building on current best practices.
Proposal for an EU Green Bond Standard
On 18 June 2019, the TEG published its Report on EU Green Bond Standard. The TEG proposes that the Commission creates a voluntary, non-legislative EU Green Bond Standard to enhance the effectiveness, transparency, comparability and credibility of the green bond market and to encourage the market participants to issue and invest in EU green bonds. The proposal builds on best market practices. The report as well as the two-pager summarising its key recommendations can be found below.
This report builds on the interim report that was published on 6 March 2019. More than 100 organisations provided feedback on the interim report and the feedback received was generally positive. A large majority of the respondents supported the creation of a voluntary EU-GBS. The TEG has carefully studied the detailed feedback received from participating stakeholders and has created an improved version of the EU-GBS. This report is now presented in an updated form.
The TEG mandate has been extended until the end of this year. In terms of Green Bonds, during this extension, the group will inter alia advise the Commission on the proposed link between the EU-GBS and the EU taxonomy, should any changes be needed due to the negotiations or the taxonomy call for feedback. The group will also work further on the design and suggested set-up of the proposed temporary, voluntary registration system of approved verifiers.
The TEG does not plan to organise an additional public call for feedback on the June EU Green Bond Standard report, as it is not proposing substantial changes compared to the interim report.
The Commission will now study the report carefully. The next Commission will ultimately be in charge of deciding on how to take this proposal from the TEG forward.