[author: Abdul Khan]

The interim report, published by the European Commission’s Technical Expert Group (TEG), outlines the work carried out so far on developing an EU green bond standard. Annex 1 of the report sets out the proposed content of a draft standard. The Technical Expert Group is proposing a voluntary standard building on existing market practices and designed to be compatible with them. This would rely on a strong verification structure, being closely linked to the new EU-wide classification system for environmentally sustainable economic activities.

The TEG demonstrates how the standard should be developed and implemented in the EU. This includes preliminary guidance to the Commission on the proposed road map, as well as possible legislative initiatives and amendments. The clear objective is to allow for substantial financial investments into green activities by developing an EU label that would alleviate barriers to development of the green bond market.
Interested parties are invited to provide feedback by April 3. Comments that address how to tackle the important hurdles to development of the green bond market, reporting and verification, eligible use of proceeds raised, and on possible incentives to help the market grow will be particularly useful.

The TEG will seek to use the feedback in developing its final recommendations to the Commission. These are due to be presented in June. The TEG’s final recommendations are expected to be fed into the Commission’s parallel work on a potential EU Ecolabel for green financial products.