Green Bonds: towards an EU legislation?

ABBL Published 18.06.2020

On 12 June, the European Commission opened a public consultation on Green Bonds. The establishment of a green bond standard was recommended by the High-Level Expert Group on sustainable finance in its final report back in 2018. Since then the European Commission set up a Technical Expert Group (TEG) on sustainable finance and asked for a proposal for an EU Green Bond Standard (EUGBS).

The TEG published its first report in June 2019 with 10 recommendations for the establishment of such a standard, which would be based on the EU taxonomy. The TEG provided further details in March 2020, as well as an updated proposed standard.

The EUGBS is highly likely to form part of the Commission’s Renewed Sustainable Finance Strategy as the European Commission already decided to consult on this project in the consultation relating to the new strategy in April this year.

The Commission is considering how to take the recommendations of the TEG forward, including in a possible legislative manner. This consultation is designed to gather further input of a technical nature from relevant stakeholders in the green bond market, in particular issuers, investors and related service providers.

The European Commission is asking a series of questions including on:

  • Social bonds in particular linked to the recent Covid-19 crisis.
  • What are the barriers to EU GBS?
  • What could be the incentives to foster EU GBS?
  • What level of flexibility should be applied in using the EU taxonomy on EU GBS?

Next steps

The Consultation is open until 2nd October 2020.

The European Commission is expected to present its Renewed Sustainable Finance Strategy in Q4 2020. Current policy discussions speak in favour of establishing a legal framework for an EU GBS.

By Aurélie Cassou


Association des Banques et Banquiers, Luxembourg


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