In June 2018, the European Commission set up a Technical Expert Group on sustainable finance (TEG) to assist in four key areas of the Action Plan through the development of the following:
The Technical Expert Group (TEG) published its interim report on an EU Green Bond Standard on March 6, 2019 for public feedback. The interim report presented the draft EU-GBS, provided a rationale for action and explained how such a standard should be developed and implemented in Europe. More than 100 organisations provided feedback on the interim report and the feedback on the report was generally positive. A large majority of the respondents supported the creation of a voluntary EU-GBS. The TEG has carefully studied the detailed feedback received from participating stakeholders and has created an improved version of the EU-GBS.
The structure of the report is largely unchanged. A section of expected impact of the EU-GBS as well as a template for the Green Bond Framework (GBF) have been added. The recommendations have been reduced in number and sharpened in scope. Moreover, several details of the EU-GBS itself have been clarified. The TEG has continued to work on the premise that the EU Taxonomy for economic activities will be largely based on the legislative proposal on the establishment of a framework to facilitate sustainable investment (also referred to as the ‘Taxonomy Regulation’ in this report) and the work done by the TEG itself to create criteria for the climate-related environmental objectives.
The report proposes the content of a draft EU-GBS (see Chapter 3 and Annex 1), explains its purpose, sets its ambition level, and explains how we think the creation of this EU-GBS will address barriers to market development (see section 3.1) and will support its role in channelling substantial financial flows to Green Projects. The report also provides guidance to the European Commission on the proposed way forward for the EU-GBS, including the creation of a centralised accreditation scheme for external verifiers (see Chapter 4 and Annexes 5 to 7). Last but not least, the report elaborates on possible incentives (see Chapter 5), based on the EUGBS, to enhance the growth of green bond issuance and the links with other sustainable financing instruments in a wider context (see Chapter 6). The EU-GBS should also feed into the work being launched in parallel by the European Commission on a potential EU Ecolabel for financial products.