EU Taxonomy
for Sustainable Finance
Since 2020, the EU Regulation on the Establishment of a Framework to Facilitate Sustainable Investment – referred to as the Taxonomy Regulation – was published and effectively came into force.
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The Taxonomy Regulation enacts a “green finance” reporting obligation for all big corporates within the EU and sets out an EU-wide classification system, or “taxonomy”, to provide businesses and investors with a common language to identify environmentally sustainable economic activities, the truly “green activities” underpinned by metrics. For instance, for real estate corporates, acquisition and ownership of buildings constructed before 31 December 2020, is considered as “green” investment only if the building’s primary energy demand, measured in kWh/m2 is among the top 15% of the local stock. Large non-residential buildings must meet additional criteria.
Green Bond Framework
We build Green, Blue, Social and Sustainability-Linked Bond Frameworks
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Green Bonds
The issuance of green bonds has grown from USD 600 million in 2007 to USD 1 trillion in 2022, as investors have become increasingly interested in financing projects that have a positive impact on the environment.
Green bonds can be issued by both public and private entities, and the market for green bonds is growing globally. There are a number of different green bond frameworks that have been developed by various organizations.
These frameworks provide guidance on how green bonds can be used to finance and re-finance project in the field of:
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Renewable energy
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Energy efficiency (buildings, energy storage, district heating, smart grids, appliances and products);
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Pollution prevention and control;
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Environmentally sustainable management of living natural resources and land use (agriculture; fishery, aquaculture; forestry);
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Biodiversity conservation;
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Clean transportation;
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Sustainable water and wastewater management;
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Climate change adaptation;
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Circular economy adapted products;
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Green buildings that meet national or internationally recognised standards or certifications for environmental performance
The Green Bond Principles (GBP) and the Climate Bonds Standards (CBS) are two of the most widely used frameworks, which provide guidance on how green bonds can be used.
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The International Capital Markets Association (ICMA) has developed a Green Bond Principles (GBP) document that provides guidance on the issuance of green bonds. The ICMA Green Bond Principles are voluntary guidelines that provide principles for the issuance of green bonds.
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The Climate Bonds Initiative (CBI) has also developed a set of voluntary guidelines for the issuance of green bonds, known as the Climate Bonds Standards. The Climate Bonds Standards provide guidance on the use of green bonds to finance climate change mitigation and adaptation projects.
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