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The consultation aims to gather technical input from stakeholders in the green bond market before finalising an EU GBS.

By Paul A. Davies, Michael D. Green, and Aaron E. Franklin

On 12 June 2020, the European Commission (the Commission) published a targeted consultation document on the establishment of an EU Green Bond Standard (EU GBS). The Commission has committed to the establishment of an EU GBS as part of its broader Action Plan on Financing Sustainable Growth (the Action Plan), and hopes that the promulgation of an official EU standard will help address some of the barriers it has identified in the current green bond market.

Recent developments concern the EU taxonomy, the EU green bond standard, and new sustainability-linked bonds

By Paul A. Davies and Michael D. Green

Earlier this month (June 2020), the EU released answers to frequently asked questions (FAQs) about the work of the European Commission (the Commission) and the Technical Expert Group on Sustainable Finance (TEG) regarding the sustainable finance taxonomy (the Taxonomy) and the EU Green Bond Standard (EU GBS).

Additionally, the Commission released an impact assessment and consultation on how to best translate the EU GBS initiative into legislation. Meanwhile, the International Capital Market Association (ICMA) also announced the launch of new Sustainability-Linked Bond Principles (SLBP).

The Initiative aims to promote sustainability in both the batteries value chain and the growing electric vehicle market.

By Paul A. Davies and Federica Rizzo

On 28 May 2020, the European Commission (EC) published its Inception Impact Assessment (IIA) to modernize the EU’s batteries legislation, in particular Directive 2006/66/EC of 6 September 2006 on batteries and accumulators, and waste batteries and accumulators (the so-called “Batteries Directive”).

The Initiative is in line with the European Green Deal, which promotes the decarbonisation of the EU economy to achieve climate neutrality by 2050. The legislative proposal is also based on the Strategic Action Plan on Batteries adopted by the EC[i] in 2018, which promotes the growth of safe and sustainable battery production, and a better functioning of the internal market as concerns batteries, products incorporating batteries, and recycled materials.

The delay may complicate the regulatory landscape for sustainable finance as the EU moves toward a standardized classification system. 

By Paul A. Davies, Nicola Higgs, and Michael D. Green

The UK government (government) has delayed a decision on whether it will adopt the EU’s taxonomy of sustainable finance activities (the Taxonomy) as the UK approaches the end of its post-Brexit transition period.

The European Commission’s Technical Expert Group (TEG) on Sustainable Finance, which developed the Taxonomy, published its final report on the document in March 2020. The resulting Taxonomy follows from consultations with more than 200 industry experts and scientists.

The EU Commission aims to enshrine into law the 2050 climate-neutrality target and has taken further steps to establish a unified EU “green” classification system.

By Paul A. Davies, Michael D. Green, and Federica Rizzo

The European Green Deal, presented on 11 December 2019, provides a roadmap with actions aimed at boosting the efficient use of resources and the circular economy, decarbonising the energy sector, and investing in environmentally friendly technologies.

On 4 March 2020, the EU Commission (the Commission) published its Proposal for a Regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (the proposed European Climate Law). This year, the Commission will also present measures to increase the EU’s greenhouse gas emission reduction target for 2030, which will require additional investments of €260 billion a year by 2030, and to promote a climate-neutral EU by 2050.

The European Commission has also established a mechanism to assist the transition of regions that will be more profoundly impacted by the 2050 carbon-neutrality target.

By Paul A. Davies and Michael D. Green

On 11 December 2019, the European Union announced that it would enshrine into legislation its goal to achieve carbon neutrality by 2050 (see “EU Commission Formally Announces European Green Deal”). The European Green Deal Investment Plan serves as the European Commission’s (Commission’s) primary vehicle through which funding commitments will be made by seeking to mobilise €1 trillion of public sector and private sector investments. The Commission has also established the Just Transition Mechanism (JTM) to assist those regions that will be more profoundly impacted by the economic and social transformation envisaged.

The formal adoption reflects the EU’s acknowledgement that a robust system of sustainable finance will be essential to the proposed capital markets union.

By Paul A. Davies and Michael D. Green

On 8 November 2019, the Council of the EU published a press release announcing the adoption of legislative reforms that aim to enhance the proposed capital markets union. Notably, two of the reforms are related to sustainable finance: the Low Carbon Benchmark Regulation (LCBR), and the Disclosure Regulation, the…