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Regulatory Briefing: European Parliament toughens up green bond standards

By Victor Smart

The European Parliament has tightened the proposed EU green bond standard (EUGBS) rules in a move that is nonetheless being seen as a compromise. The new proposal, agreed by MEPs in the Committee on Economic and Monetary Affairs on Monday, included added requirements to weed out ‘brown companies’ and extra rules to strengthen supervision. 

Significantly, any bonds marketed as ‘green’ would face transparency requirements, including alignment with the EU’s green taxonomy on the use of proceeds derived from the bond issuance. This would allow investors to compare EUGBS bonds with other green bonds. In addition, all those issuing green bonds must have safeguards in place to ensure “they do not harm people or [the] planet”.

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