Abstract
This chapter introduces the topic and outlines its main components and challenges. The green bond is one of the most dynamic markets in financial instruments. So far, the growing trend in green bond offerings has been underpinned by market initiatives that tried to provide standardized, transparent and reliable criteria to determine the conditions under which a bond could be considered “green”. This still left many questions open, hard to answer in a legislative vacuum. The European Union has tried to fill that vacuum with a Regulation on Green Bonds that tries to be a regional, and perhaps global benchmark. What does this mean for the market, for banks, investors and regulatory and supervisory authorities?
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Notes
- 1.
European Commission. 2021. Proposal for a Regulation of the European Parliament and of the Council on European Green Bonds. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52021PC0391. Accessed 22 December 2022. Provisional agreement on the EU Green Bonds Standard Regulation has been reached by the EU Council and European Parliament on 28 February 2023, as the volume was being finalized. This was taken into account where possible.
- 2.
European Investment Bank. 2008. Activity and Corporate Responsibility Report: 48. https://www.eib.org/attachments/general/reports/ar2007en.pdf. Accessed 22 December 2022.
- 3.
Bloomberg New Energy Finance as quoted by EIB. 2022. 15 Years of EIB Green Bonds. https://www.eib.org/en/press/all/2022-308-15-years-of-eib-green-bonds-leading-sustainable-investment-from-niche-to-mainstream. Accessed 22 December 2022.
- 4.
See, e.g., Recital (11) of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (Taxonomy Regulation).
- 5.
Nikolai Badenhoop. 2022. Green Bonds: An assessment of the proposed EU Green Bond Standard and its potential to prevent greenwashing. Study for the ECON committee of the European Parliament. Notably such definitional concerns do not preclude EU institutions from issuing “social bonds”, as was the case as part of the pandemic employment assistance scheme for Member States SURE.
- 6.
Data from Climate Bonds Initiative. https://www.climatebonds.net/market/data/. Accessed 23 December 2022.
- 7.
Kalin Anev Janse and Anu Bradford. 2021. Europe Greening the World: The “Brussels Effect” on Sustainable Finance. ESM Blog. https://www.esm.europa.eu/blog/europe-greening-world-brussels-effect-sustainable-finance. Accessed 23 December 2022. Agnieszka Smoleńska. 2023. Euro as the currency of the Green Transition. European Law Open.
- 8.
Including notably the EU Next Generation issuance. See Smoleńska, n. 7.
- 9.
On the dedicated treatment of sovereign issuance see chapter by Lewandowski and Smoleńska.
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Ramos Muñoz, D., Smoleńska, A. (2023). Introduction. In: Ramos Muñoz, D., Smoleńska, A. (eds) Greening the Bond Market . EBI Studies in Banking and Capital Markets Law. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-38692-3_1
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