EU lawmakers have been advised how to toughen up rules to curb the mis-selling of green bonds. An expert paper, commissioned by members of the European Parliament’s economic and monetary affairs committee, says such a move would counter the somewhat weak enforcement currently planned.
Parliament must negotiate the final rules for the voluntary EU Green Bond Standard, or EUGBS, in the next few months after the EU states recently agreed on a common position. The new document, ‘Green Bonds: An assessment of the proposed EU Green Bond Standard and its potential to prevent greenwashing’, says the proposed rules display “inconsistency, incompleteness and supervisory diffusion”. The enforcement powers are not clearly attributed and there is no strong enforcement mechanism to ensure that issuers comply with the substantive EUGBS criteria, it says.