New European green bond regulation adopted by the Council to promote sustainable finance
Published on 14th Dec 2023
The regulation establishes a registration system and supervisory framework for external reviewers of European green bonds
Environmentally sustainable bonds are one of the main instruments for financing investments related to green technologies, energy efficiency and resource efficiency as well as sustainable transport infrastructure and research infrastructure. European green bonds will be aligned with the EU taxonomy for sustainable activities and made available to investors globally.
The regulation establishes a registration system and supervisory framework for external reviewers of European green bonds.
All proceeds of European green bonds will need to be invested in economic activities that are aligned with the EU taxonomy for sustainable activities, provided the sectors concerned are already covered by it.
For those sectors not yet covered by the EU taxonomy and for certain very specific activities there will be a flexibility pocket of 15%. This is to ensure the usability of the European green bond standard from the start of its existence.
The use and the need for this flexibility pocket will be re-evaluated as Europe’s transition towards climate neutrality progresses and with the increasing number of attractive and green investment opportunities that are expected to become available in the coming years.
