The new European Green Bond standard

On 30 November 2023, Regulation (EU) 2023/2631 of the European Parliament and of the Council of 22 November 2023 on European Green Bonds and optional disclosures for bonds marketed as environmentally sustainable and for sustainability-linked bonds (the “EuGB Regulation”) was published in the Official Journal of the European Union. It will enter into force on 20 December 2023 and will be applicable from 21 December 2024, subject to certain exceptions.

The EuGB Regulation represents the next step in the European strategy for financing sustainable growth and the transition to a climate-neutral and resource-efficient economy. The EuGB Regulation seeks to increase transparency in the green bond market, allowing issuers to demonstrate that they are financing projects aligned with the European taxonomy. For their part, investors will benefit from greater consistency and comparability between bonds, through a new framework that aims to combat “greenwashing” (i.e. the misleading promotion that a financial product meets sustainable objectives) and encourage the allocation of funds to environmentally sustainable projects.

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