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S&Ds act to bring order to the chaos in the Green Bond market

Date

17 May 2022

Sections

Climate & Environment

The European Parliament’s economic affairs committee will today adopt a compromise on the new European Green Bond rules* that would significantly improve the functioning of this rapidly growing market. The S&Ds tried hard to ensure that the new rules would bring an end to the existing chaos and guarantee truly green investments. 

Paul Tang, S&D MEP and the rapporteur on the green bonds rules, said:

“These rules will bring order to the chaos in the green bond market. While the market doubles in size every two years, it is unclear how much of this money is actually used for the greening of our economy.

“With extra transparency requirements for all green bonds and a new label for ‘best in class’ European Green Bonds, investors can be confident that their sustainable investments will have the desired impact.

“Today, the Parliament is sending a clear signal to the EU member states that are trying to weaken the European Green Bond Standard: you can't have your cake and eat it too. For the market to embrace the European Green Bonds, the money raised should go 100% to the activities that are truly defined as green.

“Our deal also prevents companies using green bonds to greenwash their brown business models. Mandatory transition plans ensure that while companies don't have to be fully green to issue a European Green Bond, they should meet that objective soon.”

Note to editors:

The European Parliament’s economic committee votes today on the European Commission’s legislative proposal to create the European Green Bond Standard (EUGBS) intended to be a voluntary gold standard for green bonds. The aim is to enable companies and public authorities to more easily raise large-scale financing for environmentally friendly investments, while protecting investors from greenwashing. Today’s compromise is the parliament’s position for negotiations with the EU member states.

 

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