- European Securities and Markets Authority has proposed rules to ensure competition among external reviewers of green bonds.
- ESMA aims to standardise registration requirements and contribute to developing a level playing field.
European Securities and Markets Authority (ESMA) has proposed rules to ensure competition among external reviewers of green bonds to keep costs down for issuers.
Green bonds will be central in raising billions of euros to help the bloc transition to a low-carbon economy by 2050.
The EU approved voluntary rules for companies that want to issue green bonds last October to assure investors that the proceeds will be spent on projects aligned with the EU’s “taxonomy”, which defines sustainable investments.
Also, the Securities and Markets watchdog set out how external reviewers, based inside or outside the bloc, can check if the green bond issuance rules have been adhered to and if they should be registered and supervised.
In its proposals, ESMA aims to standardise registration requirements and contribute to developing a level playing field through lower entry costs for applicants.
ESMA’s proposals cover elements such as how external reviewers should avoid conflicts of interest with the company whose bonds they are checking and the level of knowledge needed by analysts and reviewers.
The watchdog said it would consider feedback from the public consultation before sending its recommendations to the European Commission for adoption in time for December when the new green bond rules start to be applied.