Sustainable Financing

What are the EU Green Bonds?

EU Green Bonds are any type of listed or unlisted bond or financing or capital market debt instrument where the generated proceeds  shall be exclusively used to finance or refinance, in part or in full, eligible Green Projects, either new or existing, that are aligned with the four core components of the GBP (Green Bond Principles).

The Standard Objectives of the European Green Bond (EU GBS), are:

To increase the financing funds allocated to green investments and assets.

To enhance the transparency, the comparability, the accountability and the credibility through the Usability Guide.

To contribute to the 2050 emissions neutral economy together with the Taxonomy.

To turn into a clear and safe means to guarantee and communicate that the financed investments contribute to the environmental objectives of the EU.

Thus, the European Green Bond Standard (EU GBS) is a voluntary standard, available for those issuers willing to align themselves with the best market practices. It is designed to be used and accessible to EU issuers and to those outside the EU. It is based on the Green Bond Principles (GBP).

¿Which are the disclosure requirements with regard to the Taxonomy?

The financial market participants offering financial products in Europe must incorporate disclosures with reference to taxonomy.

For each relevant product, the financial market participant, unless issuing a Disclaimer will be required to state:

How and to what extent they have used the Taxonomy to determine the sustainability of underlying investments.

To what environmental objective(s) the investments contribute.

The proportion of underlying investments that are Taxonomy aligned, expressed as a percentage of the investment, fund or portfolio.

What is the effect of green bonds on climate change?

  • They join the environmental concern with economic growth and global economy, moving the political debate from the Ministry of the Environment to the Ministry of Economic affairs.
  • The Green Bonds are related to the adaptation from “brown to green” of company activities and strategies, transferring the focus from the CFO to the Investor Relations Manager.
  • Redirect the debates towards those countries and companies that adopt a sustainable development.
  • Green bonds imply the collaboration of the different groups of interest, buyers and sellers, politicians, members of the academic environment, citizens… to settle the way to rule the country.
  • Green Bonds are instruments that are being developed in the market towards those areas that mean an immediate challenge, banks that finance low carbon emission economy, etc.

Which is the relationship between the EU Green Bonds and the SDGs??

The green bonds create a bridge to some SDGs.

The qualification of a bond as a green bond guarantees that the funds from the financing contributes to a sustainable activity, in line with the UN 2015 Sustainable Development Goals and included in the 2030 Agenda. It is interesting to bear in mind that the basis for these Goals is the environmental sustainability, referred to the climate, the oceans, the cities, the water, the energy and the ecosystems and that more than half of the indicators chosen to monitor the whole of the Goals have an environmental content.