European authorities shift away from issuing green bond guidance

European authorities are shifting away from issuing green bond guidance, according to Corlytics’ database on environmental, social and governance (ESG) compliance.

Following the introduction in 2014 of the first green bond standard, the International Capital Market Association (ICMA)’s Green Bond Principles, global regulators have been keeping a close eye on the sustainable fixed-income market — particularly the European Commission, which issued its own European Green Bond Standard (EuGBS) in February 2025.

The latter was hailed by investment bank Goldman Sachs as “a clear gold standard”, in a recent market guide.

Since 2020, the number of green bond principles and guidance documents has grown steadily, alongside the expansion of ESG, sustainability-linked, and transition bond issuances. Bond issuance peaked in 2021 at 266 billion euros-worth of green bonds issued, but has since declined as regulatory standards have increased.

The Bank of International Settlement (BIS) explained in its March review: “The green bond market has grown exponentially since the 2015 Paris Agreement, with a diverse set of issuers that includes sovereigns, municipalities, financial institutions and private corporations.

“Promoters of green bonds initially tolerated a variety of standards for impact reporting. The green bond market has since matured, growing fast by attracting a variety of issuers within and across jurisdictions.”

Latest European standards

Regulators worldwide issued a record number of green bond documents in 2024, with 30 originating from European regional authorities. The trend reflects the cycle of European lawmaking that required the European Securities and Markets Authority (ESMA) to publish regulatory and implementation guidance, as explained in its 2024 final report on the technical standards.

ESMA’s technical standards covered the external reviewer regime, such as criteria for senior management qualifications, conflict of interest management, outsourcing and reporting formats. For example, the report proposed merging assessments of analysts’ knowledge and experience with that of senior management and the board, to standardise requirements for green bond reviewers.

“Globally, the European Union continues as the primary region for green and social bond issuance, and for sustainability-linked and green loan origination. [The EU standards] enhanced transparency and oversight of pre- and post-issuance reviews,” said the Association for Financial Markets in Europe (AFME) in its latest quarterly report.

The new technical standards came into force on February 14, 2025. On April 16, the European Commission also adopted guidelines for pre-issuance and delegated acts for post-issuance disclosures under the voluntary disclosure regime.

EU influences

The EU guidelines were also cited as “international sustainability standards” for other jurisdictions. In particular, last year the Hong Kong Monetary Authority (HKMA) published a green taxonomy — guidance for green bond issuers and financial institutions — that references the green bond standards of the EU, the Association of Southeast Asian Nations (ASEAN) and China.  

Hong Kongʼs taxonomy addressed the eligibility of renewable energy technologies for bond issuance. It also outlined exemptions for issuers that are committed to using the proceeds of a bond to finance such technologies, saying “they need not conduct a life cycle assessment of their solar or wind assets”, before adding technology-specific criteria.