Position papers
Helping the European Green Bond Standard Achieve Global Relevance Companies need legal certainty and more flexibility
Deutsches Aktieninstitut welcomes the proposed voluntary nature for the Regulation on European green bonds (EU GBS) and the intention to ensure its co-existence with existing green bond standards. Furthermore, we support the alignment of the EU GBS with the EU Taxonomy. This is a distinctive feature of the planned EU GBS and a major difference from the previous market standards for green bonds.
However, there is still room for improvement in three notable areas
1. The EU GBS needs flexibility in the provisions for the green bond alignment with the Taxonomy where the Technical Screening Criteria may not be directly applicable or the criteria have not yet been developed.
2. Grandfathering provisions are needed: EU green bonds should maintain their status until maturity, provided they met the eligibility criteria at the time of issuance. Newly updated taxonomy criteria should not be relevant for the status of the bond in order to provide legal and economic certainty for both issuers and investors as well as to make the EU label attractive.
3. The required reporting deadlines are too difficult to meet in practice. The initial 30 days period for the preparation of the allocation report is too ambitious in comparison to the deadlines of financial reporting according to Art. 4 para. 1 Directive 2004/109 allowing 120 days for the preparation of an annual financial report. The EU GBS should be brought in line with existing rules and market practice.