EU strikes deal to fight greenwashing in bond markets

EU negotiators have struck a milestone deal to create the world’s first “green” bond standard that aims to be a global benchmark for investors in the green transition.

Investors’ appetite for “green debt”, used to finance renewable energy projects, low-carbon transport or well-insulated housing, is growing exponentially.

But the European Union until now did not have a common standard to certify the sustainability of investments.

The European Council, which represents 27 EU member states, and the European Parliament late Tuesday announced the “first standard in the world on green bonds”.

The parliament said this will “enable investors to orient their investments more confidently towards more sustainable technologies and businesses”.

The European Commission, the EU’s executive arm, first proposed the idea in July 2021. The standard is in line with a green label, known in EU parlance as the “taxonomy”, the bloc’s legislation that defines which economic activities can be considered sustainable.