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European Parliament publishes report on the EU Green Bond Standard

The European Parliament’s Committee on Economic and Monetary Affairs (ECON Committee) published its long-awaited report on the EU Commission’s proposal on the EU Green Bond Standard (GBS) of 6 July 2021 last week.

The report, which will constitute the Parliament’s mandate for the upcoming trilogue negotiations with the Council of the EU, introduces numerous changes to the Commission’s proposal, in particular:

Wider scope

As a key point, the amended proposal intends to implement a better regulation applying to the entire green bond market, rather than only establishing the European Green Bond label (EuGB). In contrast, the previous proposals exclusively provided for a label on a voluntary basis, but there were no proposals for regulation beyond that. From the ECON’s point of view, all issuers of bonds marketed as environmentally sustainable or sustainability-linked bonds (SLBs) in the EU, should adhere to minimum disclosure requirements, even if they are not labelled under the GBS (e.g. publication of a report on their sustainability-related due diligence policies, specific information in pre-contractual documents and annual periodic reports). This should allow investors to compare such products even better.

EU Taxonomy 

While for all bonds that are labelled as EuGB in the EU, the ECON Committee’s proposal provides the introduction of transparency requirements, including being completely aligned with the EU taxonomy legislation, the Council’s proposal wants to water down those requirements to allow for 20% flexibility for other investments. One of the main issues in the Committee’s discussion was the qualification of nuclear power and gas as “green” in light of the amended EU Taxonomy Regulation. In this context the adopted text by ECON requires stronger transparency requirements so that when a green bond issuer intends to allocate proceeds to nuclear energy or fossil gas related activities, a statement must appear prominently on the first page of the EuGB Factsheet.


Further, the ECON report also introduces requirements where an EuGB is used for securitisation purposes. As for the taxonomy alignment of EuGBs the same rules shall apply to the entity from which the issuance economically originates.

Transition plans

To avoid “brown” companies from so called greenwashing, the amended proposal requires that EuGBs and SLBs have verified transition plans according to Directive 2013/34/EU (as amended by the CSRD) with the objective to achieve climate neutrality by 2050 at the latest, as set out in Regulation (EU) 2021/1119.


While the Commission's draft provides for the preparation of a fact sheet and an inclusion of its information into prospectus, ECON goes one step further and calls for its full integration into the prospectus.

Taxonomy equivalent regulation

ECON’s paper also contains rules about the recognition of third country taxonomies to facilitate sustainable investment, if they are substantially equivalent to the EU taxonomy.

Stronger supervision 

The report provides that supervision should be strengthened through extended competences. In contrast to the Council’s proposal, the report provides that the national competent authorities should have the power to prohibit an issuer from issuing a bond more effectively if they fail to follow the rules about transparency and external review requirements.

Civil liability

In addition, the Committee’s report calls for Member States to ensure that their laws provide civil liability for infringements of the regulation’s main provisions.

What’s next? 

The Plenary of the European Parliament now needs to endorse the report, which is currently expected to be in June. Once the report is endorsed, trilogue negotiations can start.

For further details, see our previous blog posts and podcast on the EU GBS:

The amended proposal seeks to better regulate the entire green bond market, rather than only establishing the European Green Bond label (EuGB), and reduce so-called “green washing”.


sustainable finance, general, bonds, taxonomy, disclosure & reporting, eu-wide, blog posts