Turning green bonds into gold standard

Wind Generator Turbines in beautiful Real Landscape

“Investment in sustainable technologies and infrastructure is needed more than ever. The climate urgency and the energy crisis in relation to the war in Ukraine are painfully highlighting EU weaknesses in this context. To guarantee the effective uptake by investors, it remains of the utmost importance to design an attractive, trustworthy and voluntary green bonds instrument, and it’s exactly what we tried to achieve with the European green bond standard”, said Christophe Hansen, MEP, EPP Group negotiator on the draft law, ahead of today's vote in Parliament's Committee on Economic Affairs.

Proposed by the European Commission, this official European green bond standard (EUGBS) is designed to give more clarity to both issuers and investors. For example, investors who buy the bonds will be able to more easily assess, compare and trust that their investments are sustainable.

“Right now, there is a plethora of competing standards for sustainable bonds that are often difficult to compare. With the European green bond one, we want to create a gold standard. In order to become a success, these European green bonds need to be easy to use for issuers and easy to understand for potential investors”, explained Markus Ferber MEP, EPP Group Spokesman on Economic Affairs.

The European green bonds can be instrumental to finance the sustainable transition but we need to make sure that what we finance here is effectively in the interest of the next generation. As Christophe Hansen explained: “The EPP Group managed to secure that the funds raised by the bond should be allocated fully to projects that are aligned with the EU taxonomy. By doing so, we avoid a devastating market fragmentation which would have resulted from the cherry-picking to arbitrarily include or exclude certain activities”.

Markus Ferber concluded: “Some of the ideas proposed by the Socialists would have been outright damaging for the development of the still nascent market for sustainable bonds. If the Social Democrats and Greens had succeeded with their ideas, the European green bond standard would have been a total non-starter and would have damaged the ability of companies to raise green finance in the process.”

Note to editors

The EPP Group is the largest political group in the European Parliament with 176 Members from all EU Member States

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