05 October 2020

ESBG: EU green bond standard

ESBG says in consultation​ that standards proposed by EU Commission technical expert group could create economic benefits

ESBG submitted last Friday its position on an EU Green Bond Standard. Outlined in a response to a recent European Commission consultation, the association of savings and retail banks sees the EU standard as proposed by the Commission’s Technical Expert Group on Sustainable Finance (TEG) could create economic benefits associated with the issuance of green bonds. Those include a lower cost of financing for companies, thereby incenting a transition to a more sustainable economy.  

An EU green bond standard would also bring certainty around green definitions as well as address, enhance transparency and comparability in the market for green bonds. The standard would also address any doubts about the green quality of such bonds and risk of greenwashing.

On specific points: 

• ESBG members strongly agree with the proposed core components of the EU green bond standard as recommended by the technical expert group. Introducing a market wide and uniform green standard will eliminate greenwashing.

• Members support some flexibility to the requirement that the use of proceeds of green bonds should be used to finance or refinance physical or financial assets or green expenditures that are green as defined by the taxonomy. 

• Both social bonds and social bonds targeting Covid-19 are an important instrument for financial markets to achieve social aims and, in particular, to help fund public and private response to the socio-economic impacts of the pandemic.

  
  ESBG position in consultation response">>> See: ESBG response to EU Commission public consultation​

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