Featured Product

    ESMA Responds to EC Consultation on Green Bond Standard

    October 02, 2020

    ESMA published a response to the targeted consultation of EC on the establishment of the green bond standard, or GBS, in EU. ESMA welcomes the EC consultation, which builds on the European Green Deal and supports the EC ambition to strengthen the European policy framework to enhance the resilience of the financial sector to environmental, social, and governance (ESG) risks. ESMA highlights that success of the green bond standard will be determined by whether it is seen as a reliable indicator of investment in sustainable economic activities. A higher level of adherence to the standard will result in improved comparability as well as deeper, and possibly more liquid, secondary markets for these types of issuances. This will, in turn, permit investors to make better informed investment decisions and encourage further issuances of green bonds.

    Building on its response to the EC consultation on the Renewed Sustainable Finance Strategy in July 2020, where specific points in relation to the green bond standard framework were raised, ESMA highlights the following key messages:

    • The success of the green bond standard in EU will, to a large extent, be determined by whether it is seen as a reliable indicator of investment in sustainable economic activities. To ensure reliability and alignment with the Taxonomy, the green bond standard will require external reviewers conducting rigorous assessments of the green bond framework of an issuer.
    • The best way to ensure high-quality assessments is to introduce a formal EU registration and supervision regime of these external reviewers. This will ensure that the entities conducting such assessments have adequate resources, are using robust methodologies, and have measures in place to protect against conflicts of interest.
    • It is important to ensure that the final regime will not result in market concentration of external reviewers, which may disadvantage issuers, especially SMEs, as well as smaller external reviewers, while still ensuring that the market develops in a properly regulated and supervised way at EU level.
    • It supports the development of a social EU Taxonomy as a prerequisite for reliable standards for social bonds.

    ESMA concludes its response by reiterating its support for the work of EC, as EC finalizes the proposals, and reinforces its readiness to provide further views on the future green bond standard framework, as needed.

     

    Related Links

    Keywords: Europe, EU, Banking, Securities, Green Bond Standard, ESG, Climate Change Risk, Sustainable Finance Strategy, Green Taxonomy, EC, ESMA

    Featured Experts
    Related Articles
    News

    UK Authorities Consult on Implementation of Basel 3.1 Standards

    The UK authorities have published consultations with respect to the Basel requirements for banks. The Prudential Regulation Authority (PRA) published the consultation paper CP16/22 on rules for the implementation of Basel 3.1 standards.

    November 30, 2022 WebPage Regulatory News
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8597