Regulation on European Green Bonds and optional disclosures for bonds marketed as environmentally sustainable and for sustainability-linked bonds

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 is directly applicable from 21 December 2024 except for certain provisions set forth in Article 72 (3) and (4) of the said regulation. With the European Green Bond standard, the EU is aiming to set a gold standard for green bonds.

The regulation lays down requirements for issuers of bonds who wish to use the designation “European Green Bond” or “EuGB” for their bonds that are made available to investors in the EU.  However, in case the relevant designation is used in respect of securitisation bonds, most requirements only apply to the originator.

The regulation further sets up a system to register and supervise external reviewers of European Green Bonds under the responsibility of ESMA. A specific regime applies to third-country external reviewers.

The regulation also provides for optional pre-issuance and post-issuance disclosure templates for bonds marketed as environmentally sustainable and for sustainability-linked bonds in the EU.

Finally, the regulation establishes supervision by national competent authorities of issuers and securitisation originators of European Green Bonds except where the latter are issued by EU sovereign or guaranteed by certain EU sovereign. National competent authorities shall also supervise issuers of bonds marketed as environmentally sustainable and of sustainability-linked bonds who decide to use the post-issuance disclosure templates.

For more information, please refer to the CSSF website: European Green Bonds and other sustainable bonds.