Sustainable investment: EU plans safe green bonds


Status: 07.09.2021 5:03 p.m.

Invest green and earn money: This is an attractive model for many investors. The EU now wants to get involved and is planning to issue so-called green bonds.

By Jakob Mayr, ARD-Studio Brussels

The European Union wants to become the world’s largest issuer of sustainable bonds and offer investors a reliable framework for doing so. This should give them the certainty that the funds mobilized will actually be used for green projects. “Eleven EU countries have already issued green bonds today, and another four have announced that they want to do the same,” said EU budget commissioner Johannes Hahn. He already sees Europe at the forefront in this area. “We Europeans are once again the spearhead of this movement, and I am deeply convinced that this will have global effects.”

The green bonds come in autumn

Around a third of the corona reconstruction in the EU is to be financed through so-called green bonds – up to 250 billion euros. In the coming month, the EU Commission wants to start issuing green bonds. According to Hahn, the EU regulations developed for this purpose will promote investment and innovation and promote strategic independence from Europe’s economy. “It makes the EU the world’s largest green bond issuer and the world leader in sustainable finance, which will at least double the number of green bonds on the world market,” said the Commissioner.

The European green bond regulations are based on international market standards and were developed in accordance with the rules of the International Capital Market Association for green bonds and checked by a rating agency. In total, the EU is spending around 800 billion euros on economic reconstruction after the pandemic. The EU Commission borrows the money from the financial markets and passes it on to the member states in the form of grants and loans. They have to put a good third of the funds into climate-friendly measures and report back to Brussels that they have used the money for sustainable purposes – for example for thermal insulation, renewable energies or environmentally friendly transport. The commission will then want to inform investors about how the proceeds from the green bonds have helped finance the green transition.

A bone of contention remains

“Investors are showing great interest in more green bonds,” says Hahn. “As a result, the market for this has grown considerably in recent years. The green bond rules allow us to promote this growth.” The budget commissioner is convinced that investors could expand their portfolios with the green bonds for corona reconstruction, and companies would get capital for green technologies and innovations.

Although the EU will have a set of rules for green bonds in the future, it has not yet clarified some important fundamental questions: Member states and the Commission have not yet been able to agree on a directive for green financial investments because they are arguing about whether nuclear power should also be classified as a sustainable form of energy shall be.

EU wants to become the world’s largest issuer of green bonds

Jakob Mayr, ARD Brussels, September 7th, 2021 4:46 p.m.



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