Green bond issuers prepare for EU’s new standard

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🗞️ Driving the news: Green bond issuers are preparing for the European Green Bond Standard (EUGBS), set to take effect on December 21, 2024
• The new framework will mandate that proceeds align with the EU taxonomy for sustainable economic activities, potentially unlocking hundreds of billions of euros in issuances

🔭 The context: The EUGBS introduces stricter requirements compared to existing standards, requiring 100% taxonomy alignment for funded assets
• While major financial institutions and corporates already meet reporting criteria, public issuers like EU NextGeneration Green Bond programme are expected to lead adoption due to large pools of eligible assets

🌍 Why it matters for the planet: The EUGBS will improve green bond credibility, driving funds toward projects like renewable energy and flood protection
• By ensuring alignment with the EU taxonomy, it strengthens transparency and accelerates investments in decarbonization and sustainable infrastructure

⏭️ What's next: Issuers with straightforward green assets—utilities, real estate, and public agencies—are expected to adopt the EUGBS first, while others may opt for lighter voluntary disclosure templates
• Investors’ rising demand for 100% taxonomy-aligned bonds will further boost market growth

💬 One quote: “The tough part of the EUGBS is the requirement that 100% of the assets must be taxonomy aligned.” – Hans Biemans, Head of Sustainable Markets at ING

📈 One stat: EU taxonomy-aligned investments reached €249 billion in 2023, indicating significant market potential for EUGBS-aligned green bonds

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