European green bonds: A standard for Europe, open to the world

Briefing 12-01-2022

Green bonds are committed to financing or re-financing investments, projects, expenditure or assets helping to address climate and environmental issues. Both governments and companies use them to finance the transition to a more sustainable and low-carbon economy. Since the EIB inaugurated the green bond market in 2007 with its Climate Awareness Bond, the market has grown very fast, but it still represents only about 3 to 3.5 % of overall bond issuance. The green bond market needs to grow more quickly to achieve the targets in the Paris Agreement. The Commission's proposal aims to establish an official EU standard for green bonds aligned with the EU taxonomy for sustainable activities, based on a registration system and supervisory framework for external reviewers of European green bonds. The proposal is currently being examined by the co-legislators. Within the European Parliament, the file has been assigned to the ECON committee. In the Council, the working party on financial services is meeting to discuss the dossier. First edition. The ‘EU Legislation in Progress’ briefings are updated at key stages throughout the legislative procedure.