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EU adopts game-changing European Green Bonds regulation

The European Union (EU) officially embraced the much-anticipated Regulation 2023/2632 on European Green Bonds (Regulation). This regulatory framework outlines the criteria for bond issuers seeking to designate their environmentally sustainable bonds as ‘European Green Bonds’ or ‘EuGBs’, aiming to foster consistency and comparability in the green bond market. Effective from 21 December 2024, the Regulation introduces key provisions to benefit both issuers and investors.

EU adopts game-changing European Green Bonds regulation_Close-up on a ladybug on a tree branch with budding leaves_visual 1Close-up on a ladybug on a tree branch with budding leaves.

To earn the coveted EuGB label, bonds must fund economic activities that have a lasting positive impact on the environment, aligning with the Taxonomy Regulation. Issuers can follow a gradual approach, directing 85% of net proceeds to taxonomy-aligned activities before bond maturity. Alternatively, the portfolio approach permits allocation to a mix of fixed assets and financial activities meeting taxonomy requirements.

Read more: All you need to know about green bonds

Issuers must adhere to procedural requirements, including EU Prospectus Regulation compliance or exemption for EU sovereign issuers. The prospectus, approved by a national competent authority, must explicitly declare the bond as a EuGB, clarifying how proceeds will be utilised. The Regulation introduces specific disclosure requirements via websites, ensuring transparency through reports like the European Green Bond Factsheet and Annual Allocation Report.

A registration system and supervisory framework for external reviewers of EuGBs will be established, with adherence to stringent requirements. The European Securities and Markets Authority (ESMA) will oversee the registration process, including a separate regime for third-country external reviewers. National competent authorities (NCAs) will wield supervisory powers, conducting inspections and having the authority to suspend approvals or impose fines for non-compliance.

Read more: Madagascar triumphs: $8.8 million earned in groundbreaking carbon credit deal

This transformative Regulation underscores the EU's commitment to sustainable finance, offering a robust foundation for the future of green investments. By enhancing transparency and accountability, the EU seeks to inspire confidence among investors and drive positive environmental change.

Amidst the global shift towards sustainability, DGB Group emerges as a leader in impactful nature-restoration projects. Aligned with the UN Paris Agreement and the push for net-zero goals, our focus on large-scale environmental initiatives produces certified carbon credits, meeting the rising demand. DGB's green bonds signify our commitment to a sustainable future, directing proceeds to nature-based projects with positive environmental and socio-economic benefits. Offering an 8% ROI, these bonds offer investors not only financial gains but also the satisfaction of backing initiatives in line with their values, contributing to a greener world.

Invest in DGB’s green bonds for a healthier planet

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