Following publication on 7 April this year of the Consultation Paper on Technical Standards on the European Green Bond Regulation, interested parties have until tomorrow, 30 May to get their responses in to the Supervisory Authority.
The Consultation Paper (https://www.esma.europa.eu/sites/default/files/2025-04/ESMA84-858037815-176_Consultation_Paper_on_European_Green_Bond_Regulation.pdf) notes that by law the European Securities and Markets Authority must “develop a series of regulatory technical standards (RTS) and implementing technical standards (ITS) on external reviewers”.
While there has been a previous Consultation Paper on draft RTS, this second one covers 5 RTS and one ITS, including:
- Criteria for assessing the appropriateness, adequacy and effectiveness of the systems, resources and procedures
- Criteria for assessing whether the compliance function has the authority to discharge its responsibilities properly and independently and for assessing the necessary resources, expertise and access to relevant information
- Criteria for assessing the soundness of administrative and accounting procedures and internal control mechanisms and the effectiveness of control and safeguard arrangements for information processing systems
- Criteria for assessing whether the information used when providing reviews is of sufficient quality and from reliable
sources - Information, form and content of applications for recognition
- Standard forms, templates and procedures to notify ESMA of material changes in the information provided at registration.
ESMA notes additionally that it 2has developed the draft RTS and ITS considering the principle of proportionality and possible impacts and costs for market participants. In so doing, it has prepared a preliminary cost-benefit analysis which will
be finalised in the Final Report, after taking respondents’ feedback into account.”
The final RTS are expected to be closely watched by affected parties, including issuers and investors. Europe has been a key hub for the Green Bond market globally so far, and systemically important financial institutions are exposed.
For example, BNP Paribas recently noted (https://cib.bnpparibas/the-eu-green-bond-standard-driving-market-confidence/) that the Regulation is providing stability for investors facing a challenging investment environment.
“The European Green Bond Regulation anchors sustainable finance momentum in a period marked by increased geopolitical complexities and economic volatility. Investor demand for sustainable finance instruments continues to show strong resilience, as underscored by the recent Morningstar report showing fixed income funds inflows. In this context, the European Union Green Bond Standard is contributing to the continuous development of the sustainable capital markets by offering a new standard designed to further improve transparency and comparability, while further elevating the recognition of the green bond market.”
