The European Commission unveiled its first legislative proposals aimed at gearing the EU financial system to tackle climate change yesterday (Thursday), including steps to establish a “groundbreaking” green taxonomy that could form the basis for an EU green bond label.
A member of the sustainable finance HLEG has warned that a European Commission proposal to include green commitments in bond prospectuses and make them legally binding risks raising costs and deterring issuance unless other requirements are eased or incentives provided.
The European Commission will in May propose a sustainable finance taxonomy that will provide the basis for EU labels for green bonds to be introduced in 2019, it announced today (Thursday), among measures including changes to fiduciary duty and an exploration of a “green supporting factor”.
The EU High-Level Expert Group (HLEG) on sustainable finance delivered a “manifesto for far-reaching change” in the form of its final recommendations to the European Commission today (Wednesday), with a call for an official EU Green Bond Standard to be introduced this year.
Lower capital requirements for green assets could be credit negative for banks, according to Moody’s, because they could lead to “real risks” being underestimated, but the EMF-ECBC’s Luca Bertalot argues that the industry could satisfy an evidence-based European Commission approach.
The European Commission is “looking positively” at reducing capital charges to boost green loans such as energy efficient mortgages, Valdis Dombrovskis said today (Tuesday). A draft definition for such loans is due in February ahead of an EeMAP pilot phase that could support such a move.
The European Commission launched a public consultation yesterday (Monday) on how ESG factors could be integrated into the fiduciary duties of asset managers and institutional investors, as Valdis Dombrovskis spoke of the importance of private capital in achieving climate targets at COP23.
A market initiative to produce a standardised pan-European protocol and portal for financial data on energy efficient mortgages, EeDaPP, has won support and funding from the European Commission, ahead of the forthcoming pilot phase of the Energy efficient Mortgages Action Plan (EeMAP).
A former Bank of England MPC and PRA board member played down hopes of a cut in risk weights for green mortgages at a meeting yesterday (Thursday) where members of the European Commission high level expert group (HLEG) and others discussed their recommendations on sustainable finance.
An EU standard and label for green bonds and other sustainable assets can unlock the market’s potential, according to recommendations presented to the European Commission, while at a hearing yesterday (Tuesday) the EMF-ECBC called for the establishment of green mortgages to let the industry “do our job”.