Greening the Bond Market: A European Perspective (EBI Studies in Banking and Capital Markets Law)

Series Editor’s Preface
Contents
List of Contributors
Abbreviations
List of Figures
1 Introduction
	1.1 Introduction
	1.2 General Perspective: Green Bonds’ Market Trends and the EU Regulation
	1.3 EU Green Bonds and Capital Markets Regulation
	1.4 EU Green Bonds and Micro and Macro-Prudential and Monetary Perspectives
	1.5 Overarching Themes of This Volume
Part I A General Perspective
2 Toward a European Green Bond Standard: A European Initiative to Promote Sustainable Finance
	2.1 An Introduction to Green Bonds
	2.2 The European Green Bond Standard
		2.2.1 The Need for Introducing a European Green Bond Standard
		2.2.2 The Road Toward the European Commission’s Proposal
		2.2.3 The Key Elements of the European Union Green Bonds Regulation (EUGBR)
			2.2.3.1 Use of Proceeds from European Green Bonds
			2.2.3.2 Disclosure Requirements for Issuers
			2.2.3.3 Registration and Supervision of External Reviewers
	2.3 Concluding Remarks
3 Member States Sovereign Green Bond Issuance and the Development of Local Green Bond Markets in the EU
	3.1 Introduction: Green Bonds as a “Silver Bullet” for Financing the Sustainability Transition?
	3.2 Sovereign ESG Bond Issuance in the EU
	3.3 Different Shades of Greenness of EU Member States’ ESG Issuance
		3.3.1 Sovereign Green Bond Standards and the Uptake of Relevant EU Law
		3.3.2 Sovereign Green Bonds’ Internal and External Governance Mechanisms
		3.3.3 Sovereign Green Bond Issuance Objectives and Use of Proceeds
	3.4 Sovereign Green Bond Issuance Market Impact
	3.5 Conclusions
4 Issuing a Green Bond: A Practical Perspective
	4.1 Benefits of Issuing a Green Bond
	4.2 The Process of Issuing a Green Bond
	4.3 The Importance of Definitions
5 Issuing Green Bonds Without a Green Bonds Regulation: Canadian Experiences
	5.1 Introduction
	5.2 How Canadian Issuers Define an Investment as Green or Sustainable in the Absence of Prescriptive Rules
		5.2.1 International Voluntary Frameworks and Their Shortcomings
		5.2.2 The Failed Attempt at a Canadian-Made Taxonomy
		5.2.3 The Content of the Draft Canadian Taxonomy
		5.2.4 Selection Process for Green Projects
	5.3 How Canadian Issuers of Green Bonds Have Ensured an Appropriate Use of Proceeds
	5.4 What Standard of Disclosure Has Been Adopted by Canadian Issuers of Green Bonds
		5.4.1 Reporting on the Use of Proceeds
		5.4.2 Impact Reporting
	5.5 Reliance on Third-Party Opinion Providers
		5.5.1 Second-Party Opinion
		5.5.2 Verification
	5.6 Trading Venues for Canadian Green Bonds
		5.6.1 Canadian Venues
		5.6.2 International Venues
	5.7 Methods Used by Canadian Green Bond Issuers to Access Green Bond Markets and Related Liability
		5.7.1 Overview of the Methods
		5.7.2 Canadian Offerings
			5.7.2.1 Domestic Public Offerings
			5.7.2.2 Offerings Under a Canadian MTN Programme
			5.7.2.3 Liability Under Canadian Offerings
		5.7.3 Public Global Offering (U.S. Registered)
			5.7.3.1 The Process
			5.7.3.2 Documentation
			5.7.3.3 Liability Under Public Global Offerings
		5.7.4 European Market Offering
			5.7.4.1 The Process
			5.7.4.2 Documentation
			5.7.4.3 Liability Under European Market Offering
	5.8 Conclusion
Part II Green Bonds and Banking and Capital Markets
6 The Green Bonds Market in the Light of European Commission’s Proposal: Implications for Greenwashing Liability
	6.1 Introduction
	6.2 The EUGBS: Key Features and Policy Objectives
	6.3 EUGBR Shortcomings from the Perspective of Greenwashing Risks (I): Liability for Greenwashing
		6.3.1 Conceptualising Greenwashing in Relation to Green Bonds
		6.3.2 Private and Public Enforcement Mechanisms to Address Greenwashing
			6.3.2.1 Private and Public Enforcement Mechanisms
			6.3.2.2 The Extension of Private Enforcement Mechanisms
		6.3.3 The Design of the EUGBS as a Voluntary Standard (I): a Missed Opportunity?
		6.3.4 The Design of the EUGBS as a Voluntary Standard (II): Implications
	6.4 EUGBS Shortcomings from the Perspective of “Greenwashing Risk” (II): “Greenwashing Effects”
		6.4.1 The External Review Framework and Its Shortcomings
		6.4.2 The “Greenwashing Effects” of the Link to the Green Taxonomy Regulation
		6.4.3 The “Greenwashing Effects” of the Applicability to Securitisation
	6.5 Proposals to Strengthen the Application of the EUGBR and Prevent Greenwashing
		6.5.1 Strengthening Accountability Mechanisms Over the Review Process
		6.5.2 Strengthening the Cooperation Between Supervisors and Between Reviewers and Supervisors
	6.6 Conclusions
7 Integrating Sustainability in the MiFID II Package-Based Regulation: Effects on Financial Intermediaries’ Accountability and Potential Conflict Between Regulatory Objectives
	7.1 Introduction
	7.2 The Legal Context of Sustainable Finance
	7.3 Investment-Services Regulation in the Sustainability-Related Realm
	7.4 The Inclusion of Sustainability Factors in the Organisational Requirements of Financial Intermediaries
	7.5 Changes to Conflicts of Interest Regulation
	7.6 The Effects of Sustainability on Investment Advice Provision
	7.7 The Insertion of Sustainability Factors in Product Governance Regulation, also in the Light of EU Green Bond Standard
	7.8 Concluding Remarks
8 Discussion: Green Bonds and Banking and Capital Markets from a Practitioner’s Perspective
Part III Micro- and Macro-Prudential Perspective on Green Bonds
9 Method Transparency for Green Bonds: Learnings from Climate Transition Risk Metrics
	9.1 Introduction
	9.2 Data and Variables
	9.3 Results
		9.3.1 Convergence Across Risk Metrics
	9.4 Across-Metrics Analysis
	9.5 Within-Provider Analysis
	9.6 Implications
10 The Role of Prudential Requirements in Fostering Green Bond Markets: The Experience of Hungary
	10.1 Introduction
	10.2 Links Between Prudential Regulation and the Greening of the Financial System
		10.2.1 Risk Management Requirements, Corporate Governance
		10.2.2 Disclosure Requirements
		10.2.3 The Brown Penalizing Factor
	10.3 Closing the Green Funding Gap—Could and Should Prudential Regulation Play a More Assertive Role?
		10.3.1 The Green Support Factor Dilemma
		10.3.2 The Question of Coherence and Integrity
	10.4 The Question of Effectiveness
	10.5 Greening the Bond market—The Case of Hungary
		10.5.1 The Development of the Green Bond Market in CEE and in Hungary
		10.5.2 The Barriers to the Green Bond Market in Hungary
		10.5.3 Measures of the Central Bank of Hungary
			10.5.3.1 Capital Requirement Incentives
		10.5.4 Liquidity Regulation Incentives
			10.5.4.1 Further Non-Prudential Measures
	10.6 Analysis of the Regulatory Measures’ First Experience
		10.6.1 Experience with the Integrity of the Prudential Regime
		10.6.2 Experience with Effectiveness
		10.6.3 Other Lessons
	10.7 Preliminary Conclusions
11 Discussion: Micro- and Macro-prudential Issues Regarding Green Bonds from a Practitioner’s Perspective
	11.1 Chapter 9: Metrics and Methodological Considerations
	11.2 Chapter 10: The Role of Prudential Requirements in Fostering Green Bond Markets: The Experience of Hungary
12 Green Bonds and the ECB: A Tale of (Measured) Promise and (Required) Caution
	12.1 Introductory Remarks
	12.2 Laying the Contours
	12.3 Why the ECB Could or Should Act (the ESCB/ECB Mandate Question)
	12.4 What Could or Should Be Done—Part I (Green Bond Purchases)
	12.5 What Could or Should Be Done—Part II (Green TLTROs)
	12.6 What Could or Should Be Done—Part III (Collateral Framework)
	12.7 What Could or Should Be Done—Part IV (Eurosystem Non-Monetary Policy Portfolios and ECB Foreign Reserves)
	12.8 Most Recent Developments and Authors’ Conclusions
13 Discussion: Green Bonds and Monetary Policy
	13.1 Introduction
	13.2 Green Bonds and the ECB’s Asset Purchase Programme
	13.3 Green Bonds and the Eurosystem’s Collateral Framework
	13.4 Climate Change Considerations in Refinancing Operations
	13.5 Concluding Remarks
Index