EU to regulate green bond assessments

The European Securities and Markets Authority (ESMA) introduced a proposal on Tuesday to foster competitive practices among external reviewers of green bonds.

This move aims to reduce issuance costs and support the European Union’s transition to a sustainable economy by 2050.

The proposed framework outlines registration and supervision processes for reviewers, emphasising the avoidance of conflicts of interest and the necessity for analysts to possess adequate knowledge.

These measures are part of the EU’s broader strategy to ensure that green bond proceeds are invested in projects consistent with its sustainability taxonomy.

ESMA will finalise its recommendations after a public consultation period, with the new regulations expected to take effect in December.