The European Green Securities Steering Committee – an industry-wide committee jointly convened by the Climate Bonds Initiative and the European Covered Bond Council, with the support of the UNEP Inquiry – mapped its priorities for the coming 12 months at an inaugural meeting last Thursday (29 June).
The committee (EGSSC) has been formed to promote the development of a green securities market in Europe.
“Coordination on the green debate at the European level is essential,” said Luca Bertalot, secretary general of the European Mortgage Federation-European Covered Bond Council (EMF-ECBC). “This diverse group will facilitate engagement with the European institutions to grow the market for green covered, asset-backed and senior unsecured bonds.”
Foundation participants include 22 European commercial and development banks, investors, rating agencies and non-governmental organisations (NGOs), such as ABN Amro, Clifford Chance, Glennmont Partners and Obvion.
The group’s priorities are to:
- Identify regulatory and supervisory hurdles for both issuers and investors around green covered bonds and green securitisation.
- Support common definitions for green at EU level, leveraging existing labelling schemes.
- Promote origination of green assets by facilitating the identification of green assets at the European level and through standardisation of contracts where appropriate.
- Develop a common position on relevant regulation under development at the EU level, such as the STS and Covered Bonds files.
- Investigate aggregation and warehousing solutions for smaller projects.
- Explore the potential for favourable capital treatment for green securities based on differential risk profiles and asset valuations.
- Identify opportunities to further issuances of green asset-backed securities and covered bonds in well-established markets.
- Coordinate and encourage investor demand.
“We have only a short time to achieve our climate and energy targets,” said Sean Kidney, CEO of the Climate Bonds Initiative. “The EGSSC offers an opportunity to maximise the origination of green assets and influence regulation at the European level.”
Nick Robins, co-director of the UNEP Inquiry (UNEP-FI), said the new initiative is very timely, coming in response to growing European interest in the expansion of green securities.
“Crucially, it will help to build trust and confidence in the potential of asset-backed securities for financing a sustainable economy,” he said.
The United Nations Environment Programme (UNEP) Inquiry is intended to support the development of a sustainable financial system.
Photo: Sean Kidney speaking at an EeMAP event in Rome on 9 June; Credit: EMF-ECBC