EU prepares to standardize green bonds

The institutions of the European Union (EU) have agreed to set standards for green bonds to prevent misleading claims about environmental awareness.

The European Parliament (EP) and the Council of the European Union announced that they have reached a consensus in the negotiations on the “European Green Bond Standard” to allow investors to turn to sustainable technologies and activities that are in line with the objectives climate of the Union. .

Consequently, the first standards on green bonds will be introduced.

Companies using this standard will be required to use their green bond proceeds in areas included in the EU’s classification of environmentally friendly activities.

THE COMPETENT AUTHORITIES OF THE MEMBER COUNTRIES WILL AUDIT

Companies will be able to transfer only 15 percent of their investments to sectors that are not yet included in the list of activities compatible with environmental objectives.

Relevant authorities in member states will monitor whether green bond issuers comply with obligations under the new standards.

Bond buyers will be able to more easily assess the sustainability of their investments.

The risks of “greenwashing”, known as false or misinformation disseminated by a company to draw attention to its environmentally responsible image, will be reduced.

For the new rules to come into force, the EP and its member states must officially approve them. (AA)