EU adopts Green Bond framework to gear up for €250bn issuance

The framework is expected to provide investors with the confidence that the funds mobilised will be allocated to green bonds and the Commission will report on the environmental impact

Pathway to COP26 report

The European Commission has taken a step forward towards the issuance of up to €250 billion (£215bn) of green bonds with the adoption of an independently-evaluated Green Bond framework.

The framework is expected to provide investors in these bonds with the confidence that the funds mobilised will be allocated to green bonds and the Commission will report on the environmental impact.

Under the Recovery and Resilience Facility (RRF), member states will report to the Commission the green expenditures they make and the Commission will use that information to show investors how the green bonds proceeds have been used to finance the green transition.

The reporting will be organised around nine categories, with clean energy, energy efficiency and clean transportation taking the largest share.

The first green bond issuance is now expected in October, subject to market conditions, with plans for a total of around €80 billion (£68.8bn) of long term bonds this year.

Johannes Hahn, EU Commissioner in charge of Budget and Administration said: “The EU’s intention to issue up to €250 billion in green bonds between now and end-2026 will make us the largest green bond issuer in the world. This is also an expression of our commitment to sustainability and places sustainable finance at the forefront of the EU’s recovery effort.”

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