EU Green Bond Standard — European Green Bond Standard

The EU Green Bond Standard (EuGB) (Regulation (EU) 2023/2631) establishes a voluntary but high-quality standard for the issuance of green bonds in the EU. It aims to strengthen investor confidence in green bonds, prevent greenwashing, and promote the financing of the ecological transition.

At its core, the EuGB requires that the proceeds raised through a green bond are fully invested in economic activities aligned with the EU Taxonomy. This makes the EuGB the world's first legally enshrined standard for green bonds that establishes a direct link to a science-based sustainability classification system.

Although the standard is voluntary, it is expected to become the reference framework for the European green bond market. Issuers wishing to use the designation 'European Green Bond' or 'EuGB' must fully comply with the requirements of the regulation.

On 6 July 2021, the European Commission presented the proposal for a regulation on European green bonds. The preparatory work built on the report of the Technical Expert Group on Sustainable Finance (TEG) from June 2019, which had recommended a voluntary EU standard for green bonds.

On 28 February 2023, the European Parliament and the Council reached a provisional political agreement. Parliament adopted the regulation in plenary on 5 October 2023, and the Council gave its formal approval on 23 October 2023. The regulation was published in the Official Journal of the EU on 30 November 2023, entered into force on 20 December 2023, and has been fully applicable since 21 December 2024. In April 2025, the Commission published three supplementary delegated regulations on fees, fines, and reporting templates.

The EU Green Bond Standard applies to all issuers wishing to issue green bonds under the European label:

• Issuers: Any issuer — including corporations, financial institutions, sovereigns, and supranational institutions — wishing to use the designation 'European Green Bond' or 'EuGB' must comply with the regulation's requirements.
• External reviewers: Reviewers certifying the conformity of EuGB bonds must register with ESMA and are subject to its supervision.
• Voluntary application: The standard is voluntary — issuers may continue to issue green bonds under other standards (e.g. ICMA Green Bond Principles) but may not designate them as EuGB.
• Extended transparency framework: Supplementary transparency requirements apply to non-EuGB bonds marketed as environmentally sustainable.

• Full taxonomy alignment: At least 85% of bond proceeds must be invested in economic activities aligned with the EU Taxonomy; up to 15% may flow into activities for which no taxonomy criteria yet exist, provided they meet the DNSH criteria.
• Allocation reporting: Issuers must produce detailed reports on the use of proceeds, including allocation by taxonomy activity and environmental objective.
• Pre-issuance external review: Before issuance, an external reviewer registered with ESMA must verify the planned use of proceeds for taxonomy alignment.
• Post-issuance external review: After full allocation of proceeds, a post-issuance review by an external reviewer is required.
• Impact reporting: After full allocation of proceeds and at least once during the lifetime of the bond, issuers must, pursuant to Art. 12 of the Regulation, draw up and publish an impact report on the environmental impact of the financed projects (template in Annex III). Only the external review of this impact report is optional.
• ESMA registration of external reviewers: External reviewers must register with ESMA, meet organisational requirements, and are subject to ongoing supervision.

The requirement describes impact reporting as 'voluntary but recommended'. Incorrect. Under Art. 12 of Regulation (EU) 2023/2631, issuers MUST, after full allocation and at least once during the lifetime of the bond, draw up and publish an impact report. Only the external review of the impact report is optional.

last_amended corrected from 2023-11-30 to 2024-01-09 (ESAP Reg 2023/2869)