Next event: Committee decision to enter into interinstitutional negotiations confirmed by plenary (Rule 71) 2022/06/08 more...
- Committee decision to enter into interinstitutional negotiations announced in plenary (Rule 71) 2022/06/06
- Committee report tabled for plenary, 1st reading 2022/05/20
- Vote in committee, 1st reading 2022/05/16
- Committee decision to open interinstitutional negotiations with report adopted in committee 2022/05/16
- Committee opinion 2022/03/17
- Committee opinion 2022/02/18
- Amendments tabled in committee 2022/01/21
- Economic and Social Committee: opinion, report 2021/12/08
Progress: Awaiting Parliament's position in 1st reading
Role | Committee | Rapporteur | Shadows |
---|---|---|---|
Lead | ECON | TANG Paul ( S&D) | HANSEN Christophe ( EPP), BOYER Gilles ( Renew), EICKHOUT Bas ( Verts/ALE), BECK Gunnar ( ID), MOŻDŻANOWSKA Andżelika Anna ( ECR), GUSMÃO José ( GUE/NGL) |
Committee Opinion | BUDG | FERNANDES José Manuel ( EPP) | Olivier CHASTEL ( RE), Joachim KUHS ( ID), Petros KOKKALIS ( GUE/NGL), Damian BOESELAGER ( Verts/ALE), Bogdan RZOŃCA ( ECR), Ilan DE BASSO ( S&D) |
Committee Opinion | ENVI | EICKHOUT Bas ( Verts/ALE) | Christophe HANSEN ( PPE), Billy KELLEHER ( RE), Petros KOKKALIS ( GUE/NGL), Marek Paweł BALT ( S&D) |
Lead committee dossier:
Legal Basis:
TFEU 114-p1
Legal Basis:
TFEU 114-p1Subjects
Events
The Committee on Economic and Monetary Affairs adopted the report by Paul TANG (S&D, NL) on the proposal for a European Parliament and Council regulation on European green bonds.
The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should be amended as follows:
Objectives
The proposal as amended would aim to better regulate the green bond market, strengthen its supervision and reduce greenwashing.
The Regulation would have three objectives:
- to ensure the comparability of bonds marketed as environmentally sustainable in the EU;
- to establish uniform requirements for the use of the name ‘European Green Bond’ or ‘EuGB’;
- to establish a simple registration system and supervisory framework for external reviewers by making a single supervisory authority responsible for the registration and supervision of external reviewers in the EU.
To facilitate comparison and prevent greenwashing, minimum sustainability disclosure requirements should apply to bonds marketed as environmentally sustainable and sustainability-related in the EU.
Alignment with the product use taxonomy
Eligible capital expenditure should relate to economic activities that meet or will meet the taxonomy requirements within five years from the issuance of the bond, unless a longer period of up to ten years is duly justified by the specific features of the economic activities and investments concerned and documented in a CapEx plan.
New requirements on benefitting entities
To avoid ‘brown’ companies (i.e. with highly polluting industries) using the EuGB label to pretend to be greener than they really are, the amended proposal requires that all EuGBs have verified transition plans . The text also ensures that all issuers of green bonds have processes in place to identify and limit the principal adverse impacts of their activity.
Issuers of bonds marketed as environmentally sustainable in the Union that do not use the designation ‘European green bonds’ or ‘EuGB’ should disclose in their pre-contractual disclosures: (i) a clear and reasoned explanation of how the bond takes account of principal adverse impacts on sustainability factors; (ii) information on how the environment characteristics of the bond are met. They should also indicate in the annual periodic reports the extent to which the environmental attributes are met.
Exclusion of non-cooperative countries and territories for tax purposes
Issuers of European Green Bonds that are located in countries on the EU list of non-cooperative countries and territories for tax purposes or, in the case of sovereign issuers, that facilitate tax evasion through their legal system, would not be allowed to use the European Green Bond designation.
Taxonomy equivalence
Where a third country has in place a taxonomy to facilitate sustainable investment which is substantially equivalent to the EU taxonomy, the Commission should, following a positive recommendation from the Platform on Sustainable Finance established under Regulation (EU) 2020/852, adopt delegated acts in order to supplement this Regulation by authorising that the use of proceeds of an EuGB can be allocated in accordance with that third-country taxonomy.
Civil liability
Civil liability provisions should apply to issuers of European green bonds in relation to damages incurred by investors due to an infringement of the taxonomy-aligned allocation of proceeds.
Stronger supervision
Supervision is strengthened in various ways. The potential for conflicts of interest for external reviewers assessing EuGBs should be reduced and provisions are included to ensure that authorities can prohibit companies from issuing EuGBs if they do not comply with the rules.
Increased transparency for gas and nuclear
The adopted text imposes stricter transparency requirements, so that where the issuer of a green bond plans to use the proceeds of the issue for nuclear or fossil gas activities, a statement should be prominently displayed on the first page of the EuGB information sheet.
Review
The application of the Regulation should be reviewed by the Commission five years after its entry into force and every three years thereafter, based on input from the Sustainable Finance Platform. Two years after the entry into force of the Regulation, the Commission should also produce an impact assessment to determine whether the European Green Bond standard should become mandatory.
PURPOSE: to put in place a common set of requirements for a harmonised standard for European green bonds, which will further simplify environmentally sustainable investments and support a coordinated way of improving the functioning of the single market.
PROPOSED ACT: Regulation of the European Parliament and of the Council.
ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.
BACKGROUND: over the last number of years, the EU has become significantly more ambitious in tackling climate change. The Commission has already taken unprecedented steps to build the foundations for sustainable finance. Sustainability is the central feature of the EU's recovery from the COVID-19 pandemic and the financial sector will be key in helping to meet the targets of the European Green Deal.
The European Green Deal Investment Plan envisages the establishment of a standard for environmentally sustainable bonds to further increase investment opportunities and facilitate the identification of environmentally sustainable investments through a clear label. These environmentally sustainable bonds are one of the main instruments for financing investments related to low-carbon technologies, energy and resource efficiency as well as sustainable transport infrastructure and research infrastructure.
Given the existing divergences and absence of common rules, it is likely that Member States will adopt diverging measures and approaches, which will have a direct negative impact on, and create obstacles to, the proper functioning of the internal market, and be detrimental to issuers of environmentally sustainable bonds.
Thus, the need for a harmonised green bond standard to be applied across the Union by both public and private green bond issuers.
This proposal for a European Green Bond is anchored in the Taxonomy Regulation (EU) 2020/852. The Taxonomy Regulation establishes a classification of economic activities according to their environmental sustainability, with full compliance with minimum social safeguards as one of the determining criteria.
CONTENT: the proposal aims to (i) establish uniform requirements for bond issuers who voluntarily wish to use the ‘European Green Bond’ or ‘EuGB’ designation for their environmentally sustainable bonds in the Union, and (ii) establish a registration system and a framework for monitoring external examiners of European Green Bonds.
Conditions for the use of the ‘European Green Bond’ designation
The proposal:
- the limits the use of the ‘European Green Bond’ or ‘EuGB’ designation to issuers of bonds that meet specific requirements until the bond matures. This framework would be open to any bond issuer, including issuers of covered bonds and securitisations issued by a securitisation vehicle. In addition, the issuers concerned could be established both inside and outside the EU;
- requires that all use of bond proceeds shall relate to economic activities that meet the requirements for environmentally sustainable economic activities set out in Taxonomy Regulation, namely: making a substantial contribution to one or more of the environmental objectives and not significantly harming any of those environmental objectives.
Transparency and external review requirements for European green bonds
The issuance of a green bond should be fully transparent, with detailed reporting requirements.
The proposal clarifies that the bond may only be offered to the public in the Union after prior publication of the European green bond factsheet on the issuer’s website together with the pre-issuance review of the European green bond factsheet by an external reviewer. It imposes an obligation upon the issuer to draw up European green bond annual allocation reports yearly.
Conditions for taking up activities as external reviewers for European green bonds
The proposal includes a requirement to be registered and to meet the conditions for registration on an ongoing basis. Once registered, an external reviewer may conduct its activities throughout the entire territory of the Union. An external reviewer has to apply for registration from the European Securities and Markets Authority (ESMA). These measures do not apply to state auditors and other public entities mandated by sovereign issuers to assess compliance with the Regulation.
Rules on the provision of services by third-country external reviewers
The proposal lays down the powers of national competent authorities to supervise bond issuers. It also includes several provisions that specify the administrative sanctions and other administrative measures that competent authorities may impose as well as rules on the publication and reporting to ESMA of those sanctions.
It also sets out ESMA’s powers with regard to the supervision of external reviewers. These include the power to request information by simple request or by decision, the power to conduct general investigations as well as the power to conduct on-site inspections.
Documents
- Committee report tabled for plenary, 1st reading: A9-0156/2022
- Committee opinion: PE703.184
- Committee opinion: PE697.683
- Amendments tabled in committee: PE704.629
- Economic and Social Committee: opinion, report: CES3634/2021
- Committee draft report: PE700.638
- Contribution: COM(2021)0391
- Contribution: COM(2021)0391
- European Central Bank: opinion, guideline, report: CON/2021/0030
- European Central Bank: opinion, guideline, report: OJ C 027 19.01.2022, p. 0004
- Contribution: COM(2021)0391
- Contribution: COM(2021)0391
- Document attached to the procedure: EUR-Lex
- Document attached to the procedure: SEC(2021)0390
- Document attached to the procedure: EUR-Lex
- Document attached to the procedure: SWD(2021)0181
- Document attached to the procedure: EUR-Lex
- Document attached to the procedure: SWD(2021)0182
- Legislative proposal published: COM(2021)0391
- Legislative proposal published: EUR-Lex
- Document attached to the procedure: EUR-Lex SEC(2021)0390
- Document attached to the procedure: EUR-Lex SWD(2021)0181
- Document attached to the procedure: EUR-Lex SWD(2021)0182
- European Central Bank: opinion, guideline, report: CON/2021/0030 OJ C 027 19.01.2022, p. 0004
- Committee draft report: PE700.638
- Economic and Social Committee: opinion, report: CES3634/2021
- Amendments tabled in committee: PE704.629
- Committee opinion: PE697.683
- Committee opinion: PE703.184
- Contribution: COM(2021)0391
- Contribution: COM(2021)0391
- Contribution: COM(2021)0391
- Contribution: COM(2021)0391
Activities
- Fabio Massimo CASTALDO
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- Jonás FERNÁNDEZ
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- José Manuel FERNANDES
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- Marcel de GRAAFF
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- Christophe HANSEN
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- France JAMET
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- Seán KELLY
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- Pina PICIERNO
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- Sirpa PIETIKÄINEN
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- João PIMENTA LOPES
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- Alfred SANT
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- Paul TANG
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- Roberts ZĪLE
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- Clare DALY
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- José GUSMÃO
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- Hervé JUVIN
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- Alexandr VONDRA
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- Mick WALLACE
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- Billy KELLEHER
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- Ville NIINISTÖ
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- Eugen JURZYCA
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- Andżelika Anna MOŻDŻANOWSKA
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- Niels FUGLSANG
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- Mikuláš PEKSA
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- Gilles BOYER
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- Martin HLAVÁČEK
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- Ralf SEEKATZ
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- Dorien ROOKMAKER
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- Michiel HOOGEVEEN
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- Johan NISSINEN
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