Green bonds (GB) are one of the financial instruments that can help channel funds towards environmentally friendly projects. The interest towards green bonds is growing; but the lack of standards and definition of what ‘green’ really means is a source of uncertainties for issuers and investors.
With the European Green Deal, the European Commission (EC) sets
Europe on a path to become climate neutral by 2050. This is in line with
the Paris Agreement objectives and reflects the EU’s contribution to
the global fight against climate change.
Achieving this objective will require massive investments. Green
bonds (GB) are one of the financial instruments that can help channel
funds towards environmentally friendly projects. The interest towards
green bonds is growing; but the lack of standards and definition of what
‘green’ really means is a source of uncertainties for issuers and
investors. How do we ensure green bonds truly finance green projects?
Our publication Building a credible Green Bond market
presents the accountancy profession’s views on how to strengthen the
confidence in the green bond market. In light of the European Union
Green Bond Standard (EU GBS) proposal, we recommend to:
- establish a mandatory EU GBS to ensure it is consistently applied in the market
- set up a centralised European accreditation system for external assessment, building on existing national schemes and processes
- require reporting on green bonds and on actual environmental impact at regular intervals
- ensure third-party independent assurance is obtained on allocation and environmental reports
- align the EU GBS with the EU Taxonomy
The EU Green Bond Standard (GBS)
Today the EC released its Renewed Sustainable Finance Strategy and
proposal for an EU GBS. A credible, commonly accepted standard will
bring value to the market and harmonise how green bonds are issued.
Investors should be able to trust the green bond market. Transparency
and standardisation are key to facilitate efficient markets.
Ultimately, EU citizens and their future depend on how the EU will
design and put into practice its strategy towards climate neutrality.
This includes practical implementation of the EU Green Bond Standard.
Accountancy Europe
© Accountancy Europe
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article