EU co-legislators reach a provisional agreement on EU green bond standard
The European Parliament (EP) and the Council met for the fifth time to continue the negotiations on the EU green bond standard that led to an agreement on February 28th (see Council’s and the EP’s release).
Under the provisional agreement:
- ESMA will act as a centralised registration system for green bond verifiers
- External verifiers will need to identify, eliminate, or manage and disclose in a transparently any actual or potential conflicts of interest; ESMA will develop regulatory technical standards to specify criteria and assess the management of conflicts of interest
- A 15% flexibility pocket will allow both sovereign and corporate issuers to invest 15% of green bond proceeds to: i) economic activities complying with the EU taxonomy requirements but with no technical screening criteria available yet or ii) activities complying with technical screening criteria on the ‘best effort’ basis
- Application of the Regulation is postponed by 12 months to allow Member States enough time to adapt national legislation for new tasks of national competent authorities
The provisional agreement will have to be approved by the EP at the plenary sitting and Council at Coreper level.
Date: March 2023
