June 17, 2021 Read More →

EU green bond standards will be voluntary, not binding

Bloomberg ($): 

The European Union’s green bond standard will be voluntary rather than binding for issuers, according to a draft document seen by Bloomberg.

The new bond rules, which will be tied to the bloc’s blueprint for environmentally-friendly investments, will be ready for use in 2022 and aim to “set the global standard,” according to the document obtained ahead of its planned publication next month.

“The bond market can facilitate green transition investments and thereby help reach the EU’s environmental targets,” the draft said. “The proposed voluntary standard in conjunction with a light supervisory approach would ensure that the Union’s objectives are achieved in the most cost-efficient and effective way.”

A European Commission spokesperson declined to comment.

Green debt issuance has emerged as one of the fastest-growing corners of finance, with Europe taking a lead as nearly a quarter of its bond sales this year are related to ethical factors. Still, there is debate over what exactly counts as environmentally friendly, given a mishmash of rules across the globe, giving rise to concerns over “greenwashing” where the benefits may be exaggerated or misrepresented.

[John Ainger and Alexander Weber]

More: EU Green Bond Rules Will Be Voluntary, Draft Shows

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