ESG | The EU Parliament adopts new Regulation on Green Bonds

Newsletter n. 89 – October 2023

ESG

The EU Parliament adopts new Regulation on Green Bonds

On 5 October 2023, the European Parliament adopted the Regulation (EC) applicable to bond issuers who wish to use the “European Green Bond” designation or “EuGB” in marketing their bonds (the “Green Bond Regulation”). The Green Bond Regulation provides, inter alia, (a) that companies adopting the EuGB label are required to comply with several requirements when issuing green bonds, including the disclosure of relevant information on the use of bond proceeds (inter alia, they must ensure that at least 85% of the proceeds fund economic activities matching EU taxonomy regulation criteria) and to develop a strategy for the transition to a sustainable economy (also demonstrating how the financed investments contribute to this goal) and (b) a registration system and a supervisory framework for external auditors auditing such bonds, including provisions on the identification and management of external auditors’ conflicts of interest.