This week the European Parliament, European Council and European Commission reached an agreement on a text for the European Union Green Bond Standard. This much anticipated piece of legislation will create a statutory standard for EU green bonds.
As those in the securitisation community following these issues know, there was some controversy early on as to how to define "green securitisations" - particularly around whether a green securitisation ought to be a securitisation of green assets or, like other green bonds, a securitisation whose proceeds would be used for EU taxonomy compliant financings. There was also a subsidiary, if connected, discussion as to whether securitisations even had a place in the EU GBS or should have their own separate regime.
Although the text of the EU GBS compromise is not public, indications are that the final agreement may well incorporate securitisation within the new standard and do so on the basis of proceeds rather than assets. Should this be the case, it would mark a very positive step towards allowing securitisation fully to play its role in the transition of the European economy to a sustainable basis.
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