Europaudvalget 2019-20
EUU Alm.del Bilag 1037
Offentligt
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Draft ID: 80b65392-d900-4ba8-b987-2150a3818e01
Date: 29/09/2020 10:21:35
Targeted consultation on the establishment of
an EU Green Bond Standard
Fields marked with * are mandatory.
Introduction
This consultation is also available in
German
and
French
.
Diese Konsultation ist auch auf
Englisch
und
Französisch
verfügbar.
Cette consultation est également disponible en
allemand
et en
anglais
.
In March 2018, the European Commission published its Action Plan on Financing Sustainable Growth with the goal of
embedding sustainability considerations at the heart of the financial sector. Specifically, it aims to:
1. reorient capital flows towards sustainable investment to achieve more sustainable and inclusive growth;
2. manage financial risks stemming from climate change, resource depletion, environmental degradation and
social issues; and
3. foster greater transparency and long-termism in financial and economic activity.
As part of the Action Plan, the Commission committed to developing standards and labels for green financial products
and instruments, including an EU Green Bond Standard (EU GBS).
As a first step, the Commission's Technical Expert Group on sustainable finance (TEG) was tasked with preparing a
report on an EU GBS.
The TEG published its first report in June 2019 with 10 recommendations for the establishment of an EU GBS based on
current best market practices and feedback received from stakeholders. The TEG also recommended the creation of an
official voluntary EU GBS building on the new EU Taxonomy, which provides a classification system for sustainable
economic activities. The TEG provided further usability guidance in March 2020, which includes an updated proposed
standard (see the annexes).
The Commission is now considering how to take the recommendations of the TEG forward, including in a possible
legislative manner. This consultation is designed to gather further input of a technical nature from relevant stakeholders
in the green bond market, in particular issuers, investors and related service providers.
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The questions assume that the reader has read the reports by the TEG on the EU  GBS and is familiar with the
proposed content of the EU GBS, including its link to the EU Taxonomy. If this is not the case, the
report on the EU GBS
, the
TEG usability guide on the EU  GBS
and the
final report on the EU  Taxonomy
should be read first. A brief
summary of the EU GBS as proposed by the TEG is provided at the beginning of the consultation.
The European Green Deal
This consultation builds upon the
European Green Deal
, which significantly increases the EU’s climate action and
environmental policy ambitions. To complement the Green Deal, the Commission also presented the
European Green
Deal Investment Plan
, which seeks to mobilise at least €1 trillion in sustainable investments over the next decade. As
part of the Green Deal and its investment plan, the Commission reaffirmed its commitment to establish an EU GBS.
The Commission also committed to developing a
renewed sustainable finance strategy, which is the subject of a
separate public consultation
currently open for submissions until 15  July  2020. That consultation contains several
questions on green bonds and respondents are requested to also participate in it.
COVID19 & Social Bonds
Social bonds have emerged as a key instrument for mobilising private capital for social objectives. Social bonds are
similar to green bonds, except that the proceeds are used exclusively for social causes, instead of energy transition and
environmental goals.
The ongoing COVID-19 outbreak shows the critical need to strengthen the sustainability and resilience of our societies
and the importance of integrating social issues and objectives into the broader functioning of our economies. Financial
markets have so far responded to the challenge with increased issuance of social bonds responding to the impact of
COVID-19.
These social bonds often follow established market-based Social Bond Principles. The Commission is seeking the input
of stakeholders on the lessons learned from this new development, including whether the Commission can play an
even greater supportive role in building resilience to address future potential crises.
Please note:
In order to ensure a fair and transparent consultation process
only responses received through our
online questionnaire will be taken into account
and included in the report summarising the responses. Should you
have a problem completing this questionnaire or if you require particular assistance, please contact
fisma-eu-green-
[email protected]
.
More information:
on this consultation
on the consultation document
on the inception impact assessment
on EU Green Bonds Standard
on the protection of personal data regime for this consultation
About you
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*
Language
of my contribution
Bulgarian
Croatian
Czech
Danish
Dutch
English
Estonian
Finnish
French
Gaelic
German
Greek
Hungarian
Italian
Latvian
Lithuanian
Maltese
Polish
Portuguese
Romanian
Slovak
Slovenian
Spanish
Swedish
*
I
am giving my contribution as
Academic/research
institution
Business association
Company/business
organisation
Environmental organisation
Non-EU citizen
EU citizen
Public
authority
Trade union
Other
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Consumer organisation
Non-governmental
organisation (NGO)
*
First
name
Jeppe
*
Surname
Sunddal Conradsen
*
Email
(this won't be published)
[email protected]
*
Scope
International
Local
National
Regional
*
Organisation
name
255 character(s) maximum
Danish Ministry of Industry, Business and Financial Affairs
*
Organisation
size
Micro (1 to 9 employees)
Small (10 to 49 employees)
Medium (50 to 249 employees)
Large (250 or more)
Transparency register number
255 character(s) maximum
making.
Check if your organisation is on the
transparency register
. It's a voluntary database for organisations seeking to influence EU decision-
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*
Country
of origin
Djibouti
Dominica
Dominican
Republic
Libya
Liechtenstein
Lithuania
Saint Martin
Saint Pierre
and Miquelon
Saint Vincent
and the
Grenadines
Luxembourg
Macau
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Malawi
Malaysia
Maldives
Mali
Malta
Marshall
Islands
Martinique
Mauritania
Mauritius
Mayotte
Mexico
Micronesia
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Samoa
San Marino
São Tomé and
Príncipe
Saudi Arabia
Senegal
Serbia
Seychelles
Sierra Leone
Singapore
Sint Maarten
Slovakia
Slovenia
Solomon
Islands
Somalia
South Africa
South Georgia
and the South
Sandwich
Islands
Monaco
South Korea
5
Please add your country of origin, or that of your organisation.
Afghanistan
Åland Islands
Albania
Algeria
American
Samoa
Andorra
Angola
Anguilla
Antarctica
Antigua and
Barbuda
Argentina
Armenia
Aruba
Australia
Austria
Azerbaijan
Bahamas
Bahrain
Bangladesh
Ecuador
Egypt
El Salvador
Equatorial
Guinea
Eritrea
Estonia
Eswatini
Ethiopia
Falkland Islands
Faroe Islands
Fiji
Finland
France
French Guiana
French
Polynesia
French
Southern and
Antarctic Lands
Barbados
Gabon
EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard
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Belarus
Belgium
Belize
Benin
Bermuda
Bhutan
Bolivia
Bonaire Saint
Eustatius and
Saba
Bosnia and
Herzegovina
Botswana
Bouvet Island
Brazil
British Indian
Ocean Territory
British Virgin
Islands
Brunei
Bulgaria
Georgia
Germany
Ghana
Gibraltar
Greece
Greenland
Grenada
Guadeloupe
Mongolia
Montenegro
Montserrat
Morocco
Mozambique
Myanmar
/Burma
Namibia
Nauru
South Sudan
Spain
Sri Lanka
Sudan
Suriname
Svalbard and
Jan Mayen
Sweden
Switzerland
Guam
Guatemala
Guernsey
Guinea
Guinea-Bissau
Guyana
Haiti
Heard Island
and McDonald
Islands
Nepal
Netherlands
New Caledonia
New Zealand
Nicaragua
Niger
Nigeria
Niue
Syria
Taiwan
Tajikistan
Tanzania
Thailand
The Gambia
Timor-Leste
Togo
Burkina Faso
Burundi
Cambodia
Cameroon
Canada
Cape Verde
Cayman Islands
Honduras
Hong Kong
Hungary
Iceland
India
Indonesia
Iran
Norfolk Island
Northern
Mariana Islands
North Korea
North
Macedonia
Norway
Oman
Pakistan
Tokelau
Tonga
Trinidad and
Tobago
Tunisia
Turkey
Turkmenistan
Turks and
Caicos Islands
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Central African
Republic
Chad
Chile
China
Christmas
Island
Clipperton
Cocos (Keeling)
Islands
Colombia
Comoros
Congo
Cook Islands
Costa Rica
Côte d’Ivoire
Croatia
Cuba
Curaçao
Cyprus
Czechia
Iraq
Ireland
Isle of Man
Israel
Italy
Jamaica
Japan
Palau
Palestine
Panama
Papua New
Guinea
Paraguay
Peru
Philippines
Tuvalu
Uganda
Ukraine
United Arab
Emirates
United
Kingdom
United States
United States
Minor Outlying
Islands
Jersey
Jordan
Kazakhstan
Kenya
Kiribati
Kosovo
Kuwait
Kyrgyzstan
Laos
Latvia
Lebanon
Pitcairn Islands
Poland
Portugal
Puerto Rico
Qatar
Réunion
Romania
Russia
Rwanda
Saint
Barthélemy
Saint Helena
Ascension and
Tristan da
Cunha
Uruguay
US Virgin
Islands
Uzbekistan
Vanuatu
Vatican City
Venezuela
Vietnam
Wallis and
Futuna
Western
Sahara
Yemen
Zambia
Democratic
Republic of the
Congo
Denmark
*
Field
Lesotho
Saint Kitts and
Nevis
Zimbabwe
Liberia
Saint Lucia
of activity or sector (if applicable):
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at least 1 choice(s)
Accounting
Auditing
Banking
Credit rating agencies
Insurance
Pension provision
Investment management (e.g. hedge funds, private equity funds, venture
capital funds, money market funds, securities)
Market infrastructure operation (e.g. CCPs, CSDs, Stock exchanges)
Social entrepreneurship
Other
Not applicable
*
Publication
privacy settings
The Commission will publish the responses to this public consultation. You can choose whether you would like your details to be made
public or to remain anonymous.
Anonymous
Only your type of respondent, country of origin and contribution will be
published. All other personal details (name, organisation name and size,
transparency register number) will not be published.
Public
Your personal details (name, organisation name and size, transparency
register number, country of origin) will be published with your contribution.
I agree with the
personal data protection provisions
Your role in the green bond market
*
What
type of organisation are you, in relation to the green bond market?
Issuer
Investor
Verifier / external reviewer / 3
rd
party opinion provider
Intermediary
Market-infrastructure
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NGO
Public Authority
Trade or Industry Association
Other
I. Questions on the EU Green Bond Standard
About the TEG proposed EU GBS
The EU GBS aims to address several barriers identified in the current market. Firstly, by reducing uncertainty about
what constitutes green investment by linking it to the EU Taxonomy. Secondly, by standardising costly and complex
verification and reporting processes, and thirdly, by establishing an official standard to which potential incentives could
be linked.
The EU GBS as proposed by the TEG is intended to finance both physical and financial assets and includes the use of
the latter as security (i.e. as a covered bonds or asset-backed securities).
The key components of such a standard – as recommended by the TEG and building on best market practices such as
the Green Bond Principles and the Climate Bonds Initiative labelling scheme – should be:
1. alignment of the use of the proceeds from the bond with the EU Taxonomy;
2. the publication of a Green Bond Framework;
3. mandatory reporting on the use of proceeds (allocation reports) and on environmental impact (impact report);
and
4. verification of compliance with the Green Bond Framework and the final allocation report by an external
registered/authorised verifier.
Questions on the potential need for an official / formalised EU GBS
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Question 1. In your view, which of the problems mentioned below is negatively affecting the EU green bond
market today? How important are they?
1
(no
impact
at all)
Absence of economic benefits associated with the issuance of green bonds
Lack of available green projects and assets
Uncertainty regarding green definitions
Complexity of external review procedures
Cost of the external review procedure(s)
Costly and burdensome reporting processes
Uncertainty with regards to the eligibility of certain types of assets (physical and
financial) and expenditure (capital and operating expenditure)
Lack of clarity concerning the practice for the tracking of proceeds
Lack of transparency and comparability in the market for green bonds
Doubts about the green quality of green bonds and risk of green washing
2
(almost
no
impact)
3
(some
impact)
4
(strong
impact)
5
(very
strong
impact)
Don't
know -
No
opinion -
Not
applicable
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Other
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Question 2. To what extent do you agree that an EU GBS as proposed by the TEG would address the problems
and barriers mentioned above in question 1?
1
(very
negative
impact)
Absence of economic benefits associated with the issuance of green bonds
Lack of available green projects and assets
Uncertainty regarding green definitions
Complexity of external review procedures
Cost of the external review procedure(s)
Costly and burdensome reporting processes
Uncertainty with regards to the eligibility of certain types of assets (physical and
financial) and expenditure (capital and operating expenditure)
Lack of clarity concerning the practice for the tracking of proceeds
Lack of transparency and comparability in the market for green bonds
Doubts about the green quality of green bonds and risk of green washing
2
(rather
negative
impact)
3
(no
impact)
4
(rather
positive
impact)
5
(very
positive
impact)
Don't
know -
No
opinion -
Not
applicable
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Other
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Question 3. To what extent do you agree with the proposed core components of the EU GBS as recommended by
the TEG?
Don't
1
(strongly
disagree)
Alignment of eligible green projects with the EU Taxonomy
Requirement to publish a Green Bond Framework before issuance
Requirement to publish an annual allocation report
Requirement to publish an environmental impact report at least
once before final allocation
Requirement to have the (final) allocation report and the Green
Bond framework verified
2
(rather
disagree)
3
(neutral)
4
(rather
agree)
5
(strongly
agree)
know -
No
opinion -
Not
applicable
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Question 3.1 Please specify the reasons for your answer to question 3:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
a) The Danish government finds that it is of great importance to align the EU GBS with the EU Taxonomy in
order to create transparency to the benefit of both issuers and investors.
b) A Green Bond Framework will hopefully ensure harmonisation and standardisation of the information and
make it easier for issuers to show alignment with the taxonomy.
c)/d)/e) The Danish government supports the suggestions on requirements to publish allocation reports and
impact reports. Such reports should be verified in order to secure the integrity of the green bond markets.
Question 4. Do you agree with the proposed content of the following documents as recommended
b
y
t
h
e
T
E
G
?
Please note that these reporting requirements refer only to the requirements in relation to the issued green bond (it is common in the
green bond market to have reporting on the bond). These reporting requirements are not related to disclosure requirements for
companies or funds, which arise from the EU Taxonomy Regulation or the Sustainability –related Disclosures Regulation.
a) The Green Bond Framework:
Yes, I do agree with the proposed content of the Green Bond Framework
No, I disagree with the proposed content of the Green Bond Framework
Don’t know / no opinion / not relevant
b) The Green Bond Allocation Report:
Yes, I do agree with the proposed content of the Green Bond Allocation
Report
No, I disagree with the proposed content of the Green Bond Allocation
Report
Don’t know / no opinion / not relevant
c) The Green Bond Impact Report:
Yes, I do agree with the proposed content of the Green Bond Impact Report
No, I disagree with the proposed content of the Green Bond Impact Report
Don’t know / no opinion / not relevant
Question 5. Do you expect that the requirement to have the Green Bond
Framework and the Final Allocation report verified (instead of alternatives
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such as a second-party opinion) will create a disproportionate market barrier
for third party opinion providers that currently assess the alignment of EU
green bonds with current market standards or other evaluation criteria?
Yes
No
Don’t know / no opinion / not relevant
Questions on the use of proceeds and the link to the EU Taxonomy
The
EU Taxonomy Regulation
specifies that the Union shall apply the EU Taxonomy when setting out the requirements
for the marketing of corporate bonds that are categorised as environmentally sustainable. Given that the EU  Green
Bonds initiative will pursue, as its core objective, the aim of delineating the boundaries of what shall constitute an
‘environmentally sustainable’ bond, the Taxonomy will need to be applied to determine the eligibility of the proceeds of
the bond issuance. However, there may be reasons to provide a degree of flexibility with regard to its application, or its
application in specific cases.
Building on market practice, the proposed EU  GBS by the TEG recommends a use-of- proceeds approach, where
100% of the proceeds of an EU Green Bond should be aligned with the EU Taxonomy (with some limited flexibility).
The below questions aim to gather stakeholder input on the application of the taxonomy in the context of EU Green
Bonds.
Question 6. Do you agree that 100% of the use of proceeds of green bonds
should be used to finance or refinance physical or financial assets or green
expenditures that are green as defined by the Taxonomy?
Yes, with no flexibility
Yes, but with some flexibility (i.e. <100% alignment)
No
Don’t know / no opinion / not relevant
Question 6.1 Please specify the reasons for your answer to question 6:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
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We believe it is important for the development of the green bond market that both institutional and retail
investors can have strong confidence that the proceeds from EU Green Bonds are being used for green
expenditures. Even though the taxonomy is not fully developed, we believe it is important to set the bar high.
We have however identified potential issues that can be relevant for the usability of the EU GBS in the
Danish financial system as well as the financial systems across Europe more widely.
As you may be aware, the Danish mortgage credit systems offer solid financing to private real estate and
businesses. One of the central features of the Danish mortgages credit system is a close link between the
covered bond and the loan given by the credit institution to the borrower: a mortgage credit institution may
only provide loans secured by mortgages on real estate, and the loans may only be financed through bond
issuance.
This necessitates a need for the use of credit institution exposures in the form of guarantees or other
financial instruments to be used. This can e.g. be after the granting of the loan and the issue of covered
bonds, but while finalizing the registration of the mortgage. Other examples are for loans for buildings under
construction until the final value of the building can be determined, and in relation to derivatives hedging
risks in the cover pool. Further, the need to provide for additional security in case of a decrease in the real
estate market requires a need for additional collateral, which in a specialized mortgage credit institution can
only be other covered bonds or sovereign bonds. If there is no flexibility, we believe it will be difficult to
obtain sufficient green bonds or green credit institutions exposures to meet those needs.
As we understand it, at this point, if there is no flexibility in the use of proceeds from EU GBS issued bonds,
this would in practice entail a limited use of EU GBS. This could lead to a situation where only loans from
businesses and real estate that are 100 pct. compliant with the taxonomy can be included in a covered pool
of EU GBS issued bonds in the Danish mortgage credit system.
In relation to this, there is a need in Denmark – and we suspect across Europe – to have a better
understanding on how collateral – and specifically mortgages – work together with the EU GBS. At this
point, we do not have a full overview of the scope of the issues, but we believe it will affect the usability of
the EU GBS in the Danish credit mortgage system. We are working on getting a better understanding of the
issue.
If unresolved, this issue could imply that the EU GBS in practice will not be used as much as we aspire to.
Question 7.
The TEG proposes that in cases where
1. the technical screening criteria have not yet been developed for a specific
sector or a specific environmental objective or
2. where the developed technical screening criteria are considered not directly
applicable due to the innovative nature, complexity, and/or the location of the
green projects, the issuer should be allowed to rely on the fundamentals of the
Taxonomy to verify the alignment of their green projects with the Taxonomy.
This would mean that the verifier confirms that the green projects would
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This would mean that the verifier confirms that the green projects would
nevertheless
i. substantially contribute to one of the six environmental objectives as set
out in the Taxonomy Regulation,
ii. do no significant harm to any of these objectives, and
iii. meet the minimum safeguards of the Taxonomy Regulation.
Do you agree with this approach?
Yes, both 1. and 2.
Yes, but only for 1.
Yes, but only for 2.
No
Don’t know / no opinion / not relevant
Question 7.1 Please specify the reasons for your answer to question 7:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
The Danish government supports the suggestion to make it possible to asses projects that have not yet been
covered by the technical screening criteria. We do furthermore support that this assessment has to rely on
the fundamentals of the Taxonomy.
Question 7.2 Do you see any other reasons to deviate from the technical
screening criteria when devising the conditions that Green Bond eligible
projects or assets need to meet?
Yes
No
Don’t know / no opinion / not relevant
Question 8. As part of the alignment with the EU  Taxonomy, issuers of
EU Green Bonds would need to demonstrate that the investments funded by
the bond meet the requirements on do-no-significant-harm (DNSH) and
minimum safeguards. The TEG has provided guidance in both its Taxonomy
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Final Report and the EU  GBS user guide on how issuers could show this
a l i g n m e n t .
Do you foresee any problems in the practical application of the DNSH and
minimum safeguards for the purpose of issuing EU Green bonds?
Yes
No
Don’t know / no opinion / not relevant
Question 8.1 Please specify the reasons for your answer to question 8:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
The Danish government generally supports the suggestion and shares the view of the user guide as to how
this alignment should be illustrated. However, we understand that making a such demonstration requires a
high level of expertise which might be burdensome to most issuers.
Question 9. Research and Development (R&D) plays a crucial role in the
transition to a more sustainable economy, and the proposed EU GBS by the
TEG explicitly includes such expenditure as eligible use of proceeds.
Do you think the EU GBS should provide further guidance on these types of
activities, to either solve specific issues with green R&D or further boost
investment in green R&D?
Yes, as there are specific issues related to R&D that should be clarified
Yes, the proposed EU GBS by the TEG should be changed to boost R&D
No, the proposed EU GBS by the TEG is sufficiently clear on this point
Don’t know / no opinion / not relevant
Question 9.1 If you do think the EU GBS should provide further guidance on
these types of activities, please identity the relevant issues or incentives:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
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Questions on grandfathering and new investments
Question 10. Should specific changes be made to the TEG’s proposed
standard to ensure that green bonds lead to more new green investments?
Yes
No
Don’t know / no opinion / not relevant
Question 10.1 Please specify the reasons for your answer to question 10:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
Question 11. The EU  Taxonomy technical screening criteria will be
periodically reviewed. This may cause a change in the status of issued green
bonds if the projects or assets that they finance are no longer eligible under
the
recalibrated
taxonomy.
In your opinion, should an EU Green Bond maintain its status for the entire
term to maturity regardless of newly adapted taxonomy criteria?
Yes, green at issuance should be green for the entire term to maturity of the
bond
No, but there should be some grandfathering
No, there should be no grandfathering at all. If you no longer meet the
updated criteria, the bond can no longer be considered green
Don’t know / no opinion / not relevant
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Question 11.1 Please specify the reasons for your answer to question 11:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
It is important for the development of the green bond market, including green bonds with long maturities, that
both institutional and retail investors have confidence in that green bond will maintain its status as green. If
the bonds do not maintain their status as green for the entire maturity, it can have a negative effect on the
market. Also a lot of the green projects that will need finance are assets with long lifespans, i.e. windmill
parks, which often need finance with maturities of 15-20 years. We therefore see a need for certainty among
investors that the green bond maintains its status as green for the entire maturity - i.e. 20-30 years. If there
in the future develops a market with issuance of bonds with very long maturities. i.e. 40-50 years, there
might be a need to limit on how long bond can keep their status as green bonds.
Question on incentives
Question 12. Stakeholders have noted that the issuance process for a green
bond is often more costly than for a corresponding plain vanilla bond.
Which elements of issuing green bonds do you believe lead to extra costs, if
any?
1
(no
additional
costs)
Verification
Reporting
More
internal
planning
and
preparation
Other
2
(low extra
cost)
3
(extra cost)
4
(high extra
cost)
5
(very high
extra cost)
Don't know -
No opinion -
applicable
Question 12.1 Please specify the reasons for your answer to question 12, and
if possible, provide the estimated percentage and monetary increase in costs
from issuing using the EU GBS, or – ideally – the costs (or cost ranges) for
issuing green bonds under the current market regimes and the estimated
costs (or cost range) for issuing under the EU GBS:
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EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard
2256378_0022.png
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
As a public authority with no in-house issuance this is our best estimate of the cost in the market.
Question 13. In your view, how would the costs of an official standard as
proposed by the TEG compare to existing market standards?
1 - Substantially smaller
2 - Somehow smaller
3 - Approximately the same
4 - Somehow higher
5 - Substantially higher
Question 13.1 Please specify the reasons for your answer to question 13:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
As a public authority with no in-house issuance this is our best estimate of the cost in the market.
Question 14. Do you believe that specific financial or alternative incentives
are necessary to support the uptake of EU  green bonds (green bonds
following the EU GBS), and at which level should such incentives be applied
(issuer
and/or
investor)?
Please express your view on the potential impact:
1
(very low
impact)
2
(rather
low
impact)
3
(a certain
impact)
4
(rather
high
impact)
5
(very high
impact)
Don't
know -
No
opinion -
Not
applicable
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EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard
2256378_0023.png
Public
guarantee
schemes
provided at
EU level, as
e.g. InvestEU
Alleviations
from
prudential
requirements
Other
financial
incentives or
alternative
incentives
for investors
Other
incentives or
alternative
incentives
for issuers?
Question 14.1 Please specify the reasons for your answer to question 14, in
particular if you indicated an important impact of “other incentives or
alternative incentives”:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
On the issue of financial incentives, we understand the intention but also believe that we should develop the
right instruments to incentivize investors as well as issuers. Capital and liquidity requirements should
generally reflect the actual risks, and ideally data should substantiate that green investments have a lower
risk if there is to be a change in capital and liquidity requirements for green investments.
Other questions related to the EU GBS
The EU GBS as recommended by the TEG is intended to apply to any type of issuer: listed or non-listed, public or
private, European or international.
Question 15. Do you foresee any issues for public sector issuers in following
the Standard as proposed by the TEG?
Yes
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2256378_0024.png
No
Don’t know / no opinion / not relevant
Question 15.1 Please explain your answer to question 15:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
A liquid government bond market is essential, as a high degree of tradability means that investors are willing
to pay a higher price for the bonds, implying reduced funding costs for the issuer. All else being equal,
issuing a sovereign green bond will reduce the outstanding amount in the conventional bond lines by the
issuance volume of the green bond. This implies a loss of liquidity and consequently an increase in the
funding costs. Therefore, it is important that the EU GBS in its technical implementation embraces the
needs of smaller member states with low sovereign debt, and that EU GBS technically can be structured in
other ways than standard bonds issuance as long as the requirement of the EU GBS are complied with.
Question 16. Do you consider that green bonds considerably increase the
overall funding available to or improve the cost of financing for green
projects or assets?
Yes
No
Don’t know / no opinion / not relevant
Question
16.1
Please
explain
your
answer
to
question
16.
If possible, please provide estimates as to additional funds raised or current
preferential funding conditions:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
It is difficult to say whether green bonds will increase the overall funding available or improve the cost of
financing for green projects or assets. Probably not in the short run, and experiences from international
financial institutions such as EIB and NIB have not shown hugely improved cost. But the interest in the green
market seems to be growing and investors – institutional and retail – seem to focus increasingly on green
projects which could create a price difference over time.
II. Questions on Social Bonds and COVID19
During the ongoing COVID-19, financial markets have so far responded with significantly increased issuance of social
bonds responding to the impact of COVID19. These social bonds often follow established market-based Social Bond
Principles. The Commission is seeking the input of stakeholders on the lessons learned from this new development,
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EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard
including whether the Commission can play an even greater supportive role in building resilience to address future
potential crises.
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2256378_0026.png
Question 17. To what extent do you agree with the following statements?
Don't
1
(strongly
disagree)
Social bonds are an important instrument for financial markets to
achieve social objectives.
Social bonds targeting COVID19 are an important instrument for
financial markets in particular to help fund public and private
response to the socio-economic impacts of the pandemic.
Social bonds targeting COVID19 are mostly a marketing tool with
limited impact on funding public and private responses to the socio-
economic impact of the pandemic.
Social bonds in general are mostly a marketing tool with limited
impact on social objectives.
Social bonds in general require greater transparency and market
integrity if the market is to grow.
2
(rather
disagree)
3
(neutral)
4
(rather
agree)
5
(strongly
agree)
know -
No
opinion -
Not
applicable
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EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard
2256378_0027.png
Question 18. The Commission is keen on supporting financial markets in
meeting
social
investment
needs.
Please select one option below and explain your choice:
The Commission should develop separate non-binding social bond
guidance, drawing on the lessons from the ongoing COVID19, to ensure
adequate transparency and integrity.
The Commission should develop an official EU Social Bond Standard,
targeting social objectives.
The Commission should develop an official “Sustainability Bond Standard”,
covering both environmental and social objectives.
Other Commission action is needed.
No Commission action is needed in terms of social bonds and COVID19.
Please specify what other Commission action(s) is needed:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
There has, to the best of our knowledge, not been any issuance of social/COVID-related bonds in Denmark.
For now we will therefore concentrate our efforts on creating a viable and strong market for green bonds,
where we see a potential for further market development. We do appreciate that there can be a potential for
COVID or social bonds. In order to avoid “social washing”, we believe it is important for the development of a
social/COVID bond to have a solid foundation for defining social expenses in a similar way that the
taxonomy defines expenditure for the EU GBS.
Question 18.1 Please explain your answer to question 18:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
Question 19. In your view, to what extent would financial incentives for
issuing a social bond help increase the issuance of such bonds?
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EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard
2256378_0028.png
1 - Very strong increase
2 - Rather strong increase
3 - Rather low increase
4 - Very low increase
5 - No increase at all
Question 19.1 Please explain what kind of financial incentives would be
needed:
5000 character(s) maximum
including spaces and line breaks, i.e. stricter than the MS Word characters counting method.
There needs to be a more specific description of potential financial incentives in order to evaluate its
potential effect.
Additional information
Should you wish to provide additional information (e.g. a position paper,
report) or raise specific points not covered by the questionnaire, you can
upload your additional document(s) here:
The maximum file size is 1 MB.
You can upload several files.
Only files of the type pdf,txt,doc,docx,odt,rtf are allowed
Useful links
More on this consultation (https://ec.europa.eu/info/publications/finance-consultations-2020-eu-green-bond-
standard_en)
Consultation document (https://ec.europa.eu/info/files/2020-eu-green-bond-standard-consultation-document_en)
Inception impact assessment (https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12447-EU-
Standard-for-Green-Bond-#publication-details)
More on EU Green Bonds Standard (https://ec.europa.eu/info/publications/sustainable-finance-teg-green-bond-
standard_en)
Specific privacy statement (https://ec.europa.eu/info/files/2020-eu-green-bond-standard-specific-privacy-
statement_en)
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More on the Transparency register (http://ec.europa.eu/transparencyregister/public/homePage.do?locale=en)
Contact
[email protected]
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