The European Parliament has voted to adopt a first-of-its-kind voluntary standard for the use of the ‘European Green Bond’ (EuGB) label. The decision comes as part of a broader effort to bolster transparency and credibility in the green bond market while curbing greenwashing claims. The newly approved standard establishes uniform criteria for issuers seeking to designate their bonds as EuGB, aiming to guide investors towards sustainable technologies and businesses with greater confidence. It also provides companies with clarity regarding the suitability of their bonds for investors, further advancing the EU’s commitment to achieving climate neutrality. MEP Paul Tang said: “Businesses want to make the green transition. And the European Green Bond gives them the best tool yet to help them finance this shift. It provides a transparent and trustworthy tool to drive a company’s transition plan.” Under the adopted standards, companies using the EuGB label will be required to disclose comprehensive information detailing how the proceeds from their green bonds will be utilised and how these investments align with their transition strategies. These standards are in harmony with the EU’s taxonomy framework, ensuring consistency in sustainable investment definitions. Additionally, the standard introduces a registration system and supervisory framework for external reviewers responsible for assessing compliance with the standards. The disclosure requirements, presented in predefined ‘template formats’, can also be adopted by companies issuing bonds aspiring to meet EuGB standards, signalling their commitment to environmentally responsible finance.
The EU is establishing the European green bond standard, the first in the world, to help prevent companies presenting themselves as more environmentally friendly than they really are.
— European Parliament (@Europarl_EN) October 6, 2023