EU Prospectus Regulation: New ESG bond disclosure requirements - what issuers need to know

Background

The EU Listing Act, amending the EU Prospectus Regulation (“PR”), entered into force in December 2024. However, certain amendments which were reliant on delegated acts, were scheduled to be phased in over the following 18 months. This includes, in particular, prospectus disclosure requirements for bonds “advertised as taking into account ESG factors or pursuing ESG objectives”, which apply from 5 June 2026.

Current status 

On 7 May 2026, the Commission published its adopted Delegated Regulation (the “DR”) amending Delegated Regulation (EU) 2019/980 as regards the standardised format and sequence and the streamlined content, scrutiny and approval of the prospectus. This contains the detailed disclosure requirements for prospectuses under the PR and, in particular, the new disclosure requirements for prospectuses which reference ESG Bonds. 

The DR has been delayed and is subject to a scrutiny period by the European Parliament and Council of the EU which has not yet concluded. This presents a legislative gap. 

ESMA Guidance

To address this gap, ESMA issued a statement on 7 May 2026 providing non-binding guidance about the legal requirements for prospectuses during this interim period. In particular, ESMA noted that from 5 June 2026, stakeholders should use the provisions in the DR as adopted by the Commission on 7 May 2026 in determining what more granular disclosure is necessary to satisfy the PR requirements. 

This post provides an overview of the disclosures applicable to ESG Bonds under the PR from 5 June 2026 pursuant to the DR (as adopted by the Commission on 7 May 2026).  

Disclosures applicable for ESG Bonds

The DR includes a new Article 23 relating to non-equity securities “advertised as taking into account ESG factors or pursuing ESG objectives” (“ESG Bonds”), which includes use of proceeds bonds as well as sustainability-linked bonds. This will require additional information to be included in the prospectus following disclosure items in the new Annex 23 (the “ESG Disclosure Annex”). The ESG Disclosure Annex is a building block, to be used alongside the other disclosure annexes applicable to bonds. 

This is important because it is the first time that the PR will require the disclosure of specific items for ESG bonds. Until now issuers have been permitted to use their own assessment of the information that will be material for investors in accordance with the overarching necessary information test in Article 6 of the PR. From July 2023 this had been supplemented by ESMA guidance, but without specific disclosure items under the PR disclosure annexes, certain flexibility and potential divergence remained. 

European competent authorities reviewing prospectuses will now have the new ESG Disclosure Annex  to use as a checklist to work from. 

Requirements for all ESG Bonds 

All issuers of ESG Bonds will be required to include a clear explanation in the prospectus to help investors understand the ESG factors taken into account or the ESG objectives pursued by the bonds. This explanation should be unambiguous and fact-based. 

Where an ESG Bond is advertised as:

• aligned with, eligible under or otherwise adhering to the EU taxonomy, the prospectus must state the minimum percentage of the proceeds which will be allocated to activities aligned with the EU taxonomy (for an issuance under a base prospectus this percentage can be included in the final terms);

• aligned with, eligible under or otherwise adhering to a classification system other than the EU taxonomy but which lays down criteria determining whether an economic activity qualifies as environmentally sustainable (i.e. a ‘third-party classification system’), the prospectus must:

  • clearly (i) identify the third-party classification system, (ii) state that it is not the EU taxonomy and (iii) clearly describe how the third-party classification system ensures the economic activities substantially contribute to certain environmental objectives; 

  • include a hyperlink to the following (as applicable) (with disclaimer that the website information does not form part of the prospectus unless incorporated by reference in accordance with the PR): (i) technical screening criteria, (ii) do no significant harm principles and (iii) minimum social safeguards of the third-party classification system. If such third-party classification system does not include any of items (i) to (iii) the issuer should clearly state this fact; and

  • state the minimum percentage of the proceeds which will be allocated to activities aligned with the third-party classification system (for an issuance under a base prospectus this percentage can be included in the final terms);

• aligned with a specific market standard or label requirements relating to the ESG factors taken into account or the ESG objectives pursued by the ESG Bond, the prospectus must (i) identify the market standard or label and (ii) include a hyperlink to the disclosures relating to that market standard or label (e.g. an applicable framework) and to general information about such market standard or label, with a disclaimer that the website information does not form part of the prospectus unless incorporated by reference in accordance with the PR.

Specific disclosures for Use of Proceeds bonds

In relation to use of proceeds (“UoP”) bonds, the prospectus must include (i) a list of the sustainable projects and activities to which proceeds are to be allocated and (ii) a description of (A) the goal and characteristics of the relevant sustainable projects and activities to be financed, and the criteria used  to determine they are sustainable and (B) any permissible deviations from such allocation. Where sustainable projects or activities are not identified at the time a prospectus is approved, disclosure regarding the criteria to be used to identify relevant projects is required. In relation to an issuance under a base prospectus, to the extent that the details of this UoP information is not known at the time of approval of the prospectus, it can be included in the final terms. 

Specific disclosures for SLBs 

For sustainability-linked bonds (“SLBs”), the prospectus must include a description of any financial features (such as interest or premium payments) impacted by the issuer achieving or failing to achieve the relevant ESG objectives, including how those amounts are calculated. This disclosure must explain the key performance indicators (“KPIs”) and the sustainability performance targets (“SPTs”) selected and contain their calculation methodologies. The prospectus must also include information enabling investors to assess consistency of the KPIs and related SPTs with any relevant sector-specific science-based targets and the issuer’s sustainability strategy. Where the SLB includes early redemption provisions, disclosure on the impact this may have on the sustainability performance of the investment is also required.

Specific disclosures for Structured ESG Bonds

If an ESG Bond is linked to an underlying that is material for assessing the ESG factors or ESG objectives, the prospectus must include additional disclosures, including a description of the underlying with an explanation of how its use is compatible with the sustainable characteristics that the bond promotes or with the objectives of sustainable investment. Alternatively, a hyperlink to the website where such information is available may be included in the prospectus (with disclaimer that the website information does not form part of the prospectus unless incorporated by reference in accordance with the PR). Additional disclosures apply where the underlying is an ESG benchmark. If the structured ESG Bond would not qualify as a UoP bond, the prospectus must include a statement that such bond does not represent a direct investment in a sustainable product or economic activity. 

Requirement to disclose if the issuer intends to provide post-issuance information 

The ESG Disclosure Annex introduces a requirement for an issuer to disclose if it will provide post-issuance information and if so, where that information can be found. Note that this disclosure item does not compel publication of post-issuance information. 

Disclosure of ESG Ratings 

Where an issuer chooses to use ESG ratings assigned to its ESG Bond, the prospectus must include a hyperlink to those ratings, together with a disclaimer that the website information does not form part of the prospectus unless incorporated by reference in accordance with the PR. For an issuance under a base prospectus this can be included in the final terms. By way of reminder, the EU ESG Ratings Regulation will apply from 2 July 2026, marking an important milestone in the international supervision and regulation of ESG ratings providers.

Interaction between the ESG Disclosure Annex and the EuGB Regulation

The requirements of this proposed ESG Disclosure Annex will apply to all ESG Bonds subject to the PR except for bonds issued in accordance with the EU Green Bond Regulation (“EuGB Regulation") (either in relation to bonds issued in compliance with the full “European Green Bond" label or those where the issuer has chosen to adopt the voluntary pre-issuance disclosure templates under the EuGB Regulation) provided, in each case, that the applicable conditions of Article 13(1a) of the PR regarding incorporation into the prospectus of 'relevant information' from the factsheet or voluntary templates are met. This is welcome, and addresses concerns about creating overlapping or duplicative disclosure obligations for EuGB Regulation issuances. However, issuers who issue bonds which follow the EuGB Regulation and/or other standards, for example the ICMA Principles, under a single base prospectus will need to follow the ESG Disclosure Annex. 

Practical implications

For many repeat issuers this new ESG Disclosure Annex should not represent a significant uplift in disclosure. The requirements largely reflect pre-existing best practice. However, as always, the specific requirements will need careful attention and those preparing their first prospectus for approval post-5 June 2026 will need to critically assess their proposed disclosure against the detailed items set out in the annex. For issuers with a base prospectus, particular attention should be paid to whether any specific disclosure item must be included in the base prospectus or may be included in the final terms (i.e. whether it is a Category A, B or C disclosure item).

Timings

The changes to the PR apply from 5 June 2026, subject to the transitional provisions (or grandfathering) (see Article 48a of the PR and ESMA’s statement of 18 February 2026). This means that issuers with a base prospectus approved prior to 5 June 2026 will not need to follow the requirements of the new ESG Disclosure Annex until their next update, giving up to 12 months before some issuers need to consider this. 

Due to the delay in the legislative process for the DR, the ESG Disclosure Annex will not technically be in force immediately on 5 June 2026. However, see Current Status and ESMA Guidance above for ESMA’s recommended approach to this legislative gap.