EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

Europaudvalget 2019-20
EUU Alm.del Bilag 1037
Offentligt

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.

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

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

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

Consumer organisation

Non-governmental

organisation (NGO)

First

name

Jeppe

Surname

Sunddal Conradsen

(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-

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

Country

of origin

Djibouti

Dominica

Dominican

Republic

Libya

Liechtenstein

Lithuania

Saint Martin

Saint Pierre

and Miquelon

Saint Vincent

and the

Grenadines

Luxembourg

Macau

Madagascar

Malawi

Malaysia

Maldives

Mali

Malta

Marshall

Islands

Martinique

Mauritania

Mauritius

Mayotte

Mexico

Micronesia

Moldova

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

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

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

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

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):

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

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

party opinion provider

Intermediary

Market-infrastructure

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

Question 1. In your view, which of the problems mentioned below is negatively affecting the EU green bond

market today? How important are they?

(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

(almost

impact)

(some

impact)

(strong

impact)

(very

strong

impact)

Don't

know -

opinion -

Not

applicable

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

Other

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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?

(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

(rather

negative

impact)

(no

impact)

(rather

positive

impact)

(very

positive

impact)

Don't

know -

opinion -

Not

applicable

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

Other

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

Question 3. To what extent do you agree with the proposed core components of the EU GBS as recommended by

the TEG?

Don't

(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

(rather

disagree)

(neutral)

(rather

agree)

(strongly

agree)

know -

opinion -

Not

applicable

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

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

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

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)

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.

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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.

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

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

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

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.

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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

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

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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?

(no

additional

costs)

Verification

Reporting

internal

planning

and

preparation

Other

(low extra

cost)

(extra cost)

(high extra

cost)

(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:

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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:

(very low

impact)

(rather

low

impact)

(a certain

impact)

(rather

high

impact)

(very high

impact)

Don't

know -

opinion -

Not

applicable

EUU, Alm.del - 2019-20 - Bilag 1037: Notat samt dansk høringssvar vedr. Kommissionens offentlige høring om Green Bond Standard

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.