ESMA consults on remaining RTS for external reviewers of European Green Bonds

On 7 April 2025, the European Securities and Markets Authority (ESMA) published a Consultation Paper on the remaining technical standards for external reviewers under the EU Green Bond Regulation. ESMA consulted on the first set of technical standards in March 2024 (for which a Final Report was published on 14 February 2025); for more, see our previous blog post.

The draft technical standards relate to the following aspects of the external reviewer regime:

• appropriateness, adequacy and effectiveness of systems, resources and procedures;
• authority, resources, expertise and access to relevant information of the compliance function;
• soundness of administrative and accounting procedures, internal control mechanisms and effectiveness of information systems controls;
• quality and reliability of sources of the information used for external reviews;
• information, form and content of applications for recognition; and
• notification of material changes in the information provided at registration.

Background

The Regulation on European Green Bonds and optional disclosures for bonds marketed as environmentally sustainable and for sustainability-linked bonds (the EU Green Bond Regulation) was published in the Official Journal of the European Union on 30 November 2023, entered into force on 20 December 2023 and has applied since 21 December 2024. 

The EU Green Bond Regulation introduces: (i) a voluntary label for issuers of green use of proceeds bonds where proceeds are fully allocated to economic activities aligned with the EU Taxonomy Regulation (subject to some limited flexibility); and (ii) creates an optional disclosure regime for bonds marketed as environmentally sustainable and sustainability-linked bonds. 

For issuers wishing to use the voluntary label (i.e. issuers of European Green Bonds), there are prescribed pre- and post-issuance transparency requirements, including the completion of a pre-issuance European Green Bond factsheet, post-issuance European Green Bond allocation report(s) and post-allocation European Green Bond impact report, each following templates set out in the Regulation. 

Issuers of European Green Bonds will also be required to contract an independent external reviewer to provide a pre-issuance review of the European Green Bond factsheet and a post-issuance review of the European Green Bond annual allocation reports. 

These external reviewers must be registered with and supervised by ESMA. Pursuant to the EU Green Bond Regulation, ESMA has been tasked with developing draft regulatory technical standards (RTS) and implementing technical standards (ITS) specifying certain provisions of the external reviewer regime; the current consultation is the second of two public consultations on these technical standards.

Next steps

The consultation closes on 30 May 2025. ESMA expects to publish a Final Report in Q4 2025 and submit the draft RTS to the Commission for adoption by 21 December 2025.

For more detail on the European Green Bond Regulation, see our earlier blog post and our podcast series, including episode six, which explains the regime for external reviewers of European Green Bonds in a nutshell.