About
The EuBGS takes the form of an EU regulation which can be complied with on a voluntary basis for all issuers that wish to label their bond a "European Green Bond" or "EuGB". It will is to all EU and non-EU issuers. As such, the EuGBS is also designed to be globally relevant.
All different types of bonds may be eligible for the EuGB label, provided the requirements are met. The main components of the EuGBS are as follows:
- Alignment of the use of proceeds with the EU Taxonomy (a classification system intended to clearly define which economic activities can be considered "environmentally sustainable"). This feature does in principle allow any company to issue green bonds, regardless of their main business activity, as long as they finance green projects.
- There is a flexibility pocket of 15% for those sectors not yet covered by the EU Taxonomy and for activities in the context of international support reported in accordance with internationally agreed guidelines, criteria and reporting cycles, including climate financing and official development assistance .
- The standard caters not only for funding activities that are already aligned with the EU Taxonomy, but also for funding transitional activities. For example one can issue a EuGB funding long-term projects that result in an EU Taxonomy-aligned project (such as converting a production facility, like a steel plant). One can also use the proceeds to acquire or construct an EU Taxonomy-aligned asset (like a new energy-efficient building).
- Detailed disclosure and reporting requirements are to ensure transparency as to how proceeds are allocated. Issuers will have to publish a "European Green Bond factsheet", a CapEx plan (where the use of proceeds relate to economic activities that will meet the taxonomy requirements) and annual allocation reports, as well as an impact report.
The European Green Bond factsheet is subject to mandatory pre-issuance by external reviewers registered with the European Securities Markets Authority (ESMA), and the allocation report drawn up after the full allocation of the proceeds is subject to a post-issuance review. Issuers may also seek review of the impact report on voluntary basis.
It is also worth noting that the EuGBS accommodates for application of the "EuGB" label to securitised bonds, but not bonds issued for the purpose of synthetic securitisation. The Commission saw the inclusion of securitised bonds in the EuGBS as a good short-to-midterm solution as the securitisation market is not yet ready for a separate sustainability framework. The requirements apply to the originator, and not the SPV/SSPE, and the "proceeds" will in the context of securitisations accordingly refer to the proceeds obtained by the originator from selling the securitised exposures to the SSPE. Certain additional disclosure requirements apply in the case of securitisation in order to provide transparency about the environmental characteristics of the securitised exposures.
The EuGBS also sets out optional pre-issuance and periodic disclosure templates for bonds marketed as environmentally sustainable and for environmental sustainability-linked bonds in the EU. The aim is to provide a tool with which issuers of such bonds may boost the transparency and credibility of their bonds' purported sustainability characteristics.
The EuGB is complemented by detailed rules in delegated regulations, covering topics such as the content, methodologies, and presentation of the information to be voluntarily disclosed by issuers of bonds marketed as environmentally sustainable or of sustainability-linked bonds in the templates for periodic post-issuance disclosures; rules of procedure for ESMA's exercise of the power to impose fines or periodic penalty on external reviewers; and the type of fees to be charged by ESMA to external reviewers of European Green Bonds, the matters in respect of which fees are due, the amount of the fees, and the manner in which those fees are to be paid.
Who does it impact?
The EuGBS is a voluntary standard. An issuer is only required to comply with the requirements if it wishes to use the designation "European green bond" or "EuGB" for its bonds that are made available to investors in the EU. It is designed to be relevant and accessible to issuers located in the EU as well as to issuers located outside the EU. The standard is applicable to any type of listed or unlisted bond or capital market debt instrument by any public or private issuer.
Issuers of sustainability-linked bonds may make use of the optional disclosure and reporting templates to improve the transparency and credibility of their issuances.
Status: In force
The Regulation is in force in the EU and has applied since 21 December 2024, and is currently under scrutiny by the EEA/EFTA states for implementation in EEA Agreement. The public consultation period in Norway ended 10 January 2024.
The following level 2 regulations have been adopted to supplement the regulation establishing the EuGBS:
- Commission Delegated Regulation (EU) 2025/753 on the content, methodologies, and presentation of the information to be voluntarily disclosed by issuers of bonds marketed as environmentally sustainable or of sustainability-linked bonds in the templates for periodic post-issuance disclosures.
- Commission Delegated Regulation (EU) 2025/754 specifying rules of procedure for the exercise of the power to impose fines or periodic penalty payments by the European Securities and Markets Authority on external reviewers.
- Commission Delegated Regulation (EU) 2025/755 specifying the type of fees to be charged by ESMA to external reviewers of European Green Bonds, the matters in respect of which fees are due, the amount of the fees, and the manner in which those fees are to be paid.
- Commission Delegated Regulation supplementing Regulation (EU) 2023/2631 with regard to regulatory technical standards specifying the conditions for the registration of external reviewers, the criteria for assessing the sound and prudent management of external reviewers, the appropriateness of the knowledge, experience and training of the external reviewers’ employees, and the conditions under which external reviewers can outsource their assessment activities.
- Commission Implementing Regulation laying down implementing technical standards for the application of Regulation 2023/2631 with regard to the standard forms, templates, and procedures for the provision of the information for an application for registration as an external reviewer for European Green Bonds.
Further level 2 regulations are currently under development:
- On 14 February 2025, ESMA sent its proposal for the following to the Commission: (i) RTS specifying the criteria relating to the good repute, skill, professional qualifications and experience of the senior management and the members of the board of an external reviewer, as well as the number of analysts, employees and other persons directly involved in its assessment activities and their level of knowledge, experience and training; (ii) RTS specifying the criteria for assessing the sound and prudent management and the management of conflicts of interest of an external reviewer; (iii) RTS specifying criteria in relation to the performance of assessment activities of external reviewers by third-party service providers; and (iv) ITS with regard to the standard forms, templates and procedures for the application for registration as an external reviewer for European Green Bonds.
- On 15 October 2025, ESMA proposed technical standards regarding external reviewers of EuGBs on the topics (i) systems, resources and procedures; (ii) the compliance function; internal policies and procedures; (iii) information used for assessment activities; (iv) the form and content of applications for recognition; and (v) the forms, templates and processes for providing material changes to registration. The proposal takes into account feedback received to the draft published 7 April 2025.
Legislative history
The European Green Deal Investment Plan of 14 January 2020 announced that the Commission is to establish a voluntary European Green Bond Standard.
On 18 June 2019, the TEG published its report on European Green Bond Standard, accompanied by a two-pager summarising its key recommendations.
On 12 June 2020, the EU Commission launched a public hearing on the proposal for the European Green Bond Standard, which was open until 2 October 2020.
The EU Commission announced a proposal for the EuGBS in July 2021. The proposal is currently under scrutiny by the co-legislators. The proposal can be amended during this process and the timing of a final version and application of the regulation is not clear.
In May 2022, the EU Parliament's Economic and Monetary Affairs Committee adopted their position on the proposed Regulation. The Parliament's text introduces several changes to the Commission’s proposal, concerning, inter alia, ensuring the comparability of EuGBS with other green-labelled bonds.
In its October 2022 report on the Securitisation Regulation, the Commission suggests to amend the EuGBS to accommodate for sustainable securitisation. The Commission sees this as a good short-to-midterm solution as there currently is no need for a separate framework for sustainable securitisation.
On 28 February 2023, the Council and the European Parliament reached a provisional agreement on the creation of the EuGBS. In October 2023 the Council and European Parliament adopted the proposal.
The regulation entered into force 20 December 2023 and applied from 21 December 2024. Certain provisions applied from 21 December 2023.
The report on Norwegian implementation was published on 18 October 2023. The deadline for consultation responses was 10 January 2024.
Relation to other initiatives and regulations
The EuGBS is one of the main factors in implementing EU's Sustainable Finance Action Plan. It is closely linked to the EU Taxonomy Regulation, as using proceeds from the bond issue to fund Taxonomy-aligned economic activities is a requirement for using the designation "European Green Bond" or "EuGB" for the bond.
Participants
The EuGBS is intended to be used by market participants globally and can, as a starting point and subject to certain conditions, be used by all types of issuers and any type of bond instrument.
Thommessen's comments
Although the EuGBS is largely based on existing market practice, the framework is a major development in the EU bond market as it is the first sustainable bond label ever produced by the EU legislators. The EuGBS represents an ambitious corner stone in EU's green growth strategy, referred to as the "European Green Deal", where the main goal is carbon neutrality in the EU in 2050. The European Commission refers to it as the voluntary "gold standard" for green bonds.
The purpose of the EuGBS is to facilitate a transparent and credible green bond market which in turn will make it easier for investors to identify sustainable investments and thereby direct capital flows towards "green" investments. The standard aims to provide a clearly defined and uniform protocol on issuing green bonds, and clarify which green projects are eligible through linkage to the EU Taxonomy (defining a "green list" for environmentally sustainable activities).
As the EU Taxonomy represents what is generally regarded as a high standard for "green" activities, bonds issued according to the EuGBS may be deemed an attractive investment opportunity for sustainability-oriented investors, which in turn will give issuers an incentive to issue green bonds in alignment with the EuGBS.
As per November 2025, 14 EuGBS have been issued. Among the issuers are Norsk Hydro, who raised EUR 500 million, and the state of Denmark, becoming the first country to issue European Green Bonds raising DKK 7 billion.