(Source: European Commission)
“Check against delivery”
Ladies and Gentlemen,
Europe’s recovery and its green transition go hand in hand. Our budget matches the political will to build back better by innovative financial instruments and actions – as today’s Green Bond framework proves.
The NextGenerationEU Green Bond framework takes us a step forward on many levels – it is the framework
- to issue up to €250 billion in green bonds – 30% of NGEU’s borrowing.
- to foster investments, innovation and the strategic autonomy of Europe’s economy.
- to make the European Union the largest Green Bond issuer in the world, making it the global leader in sustainable finance.
Let me give you an overview – why the NGEU Green Bonds framework is important to achieve our goal of climate neutrality by 2050, how it works and why it benefits Member States, investors and the European Union as a whole.
The NGEU Green Bond framework will play an important role to finance the mandatory share of 37% of climate expenditure under the Recovery and Resilience Facility.
Member States are eager to fulfil this goal. Many national plans go far beyond and allocate even up to 60% to measures that support climate objectives (e.g. Luxembourg, Germany, or Austria). These measures allow important investments into more energy-efficient buildings, renewable energy and sustainable mobility – fostering lower greenhouse gas emissions and new green business models.
The Member States’ determination to promote a sustainable transition matches the growing market demand. Investors expressed a strong appetite for more green bonds. As a result, the green bond market expanded remarkably over the last few years.
The Green Bond framework enables us to boost the green bond market even more: NGEU green bonds will allow investors to diversify their portfolios while implementing partners gain capital for green technologies and innovations.
Credibility is key. Therefore, the Commission prepared a robust and credible NGEU green bond framework focused on the climate expenditure under the Recovery and Resilience Facility.
From the beginning, we made it very clear: All spending also has to respect the “Do No Significant Harm” principle for other environmental objectives. This ensures that investments financed by NGEU green bonds are truly “green”.
The NGEU green bond framework identifies nine broad categories to which the proceeds of green bonds are allocated – among them energy efficiency, clean transportation and clean energy, which will be the largest expenditures under the Recovery and Resilience Facility.
The current well-established standards of the market – the International Capital Market Association (ICMA) green bond principles – are our reference which ensures that eligibility for green bonds is clearly defined. It has to be proved that financed investments have a positive ecological impact.
The Green Bond framework already passed the first test: A well-known sustainability rating and research agency (Vigeo Eiris) provided an independent opinion – with a very positive and reassuring result: in important aspects, NGEU green bonds go beyond standard practice and provide a best-practices approach towards sustainability.
We guarantee this also with a robust reporting mechanism: The European Commission is able to trace the NextGenerationEU green bond proceeds to their final investment, and provide allocation reporting to investors.
To complement our efforts, the Commission will engage independent experts to oversee and assess the impact reporting. This will assure investors and the public that investments based on NGEU green bonds are in line with the labelling: green in- and outside!
Today’s NGEU framework allows us to issue green bonds before the future EU Green Bonds Standard is in place. It will however already be aligned – to the extent possible – with the future EU Green Bond Standard and EU Taxonomy while also recognising other climate relevant expenditures.
Today, we also presented, as announced, our revised funding plan for NextGenerationEU.
It confirms the original financial parameters of €80 billion long-term funding for 2021 and thereby underlines how well planned and prepared our original plan was in June!
This means that after the successful issuances of €45 billion Bonds in different maturities for NGEU in June and July, there are €35 billion to be raised via long-term funding in the upcoming months.
We used our funding plan review also to announce a new auction calendar, which will further establish the Commission as a predictable and credible large-scale-issuer.
The launch of the auction platform and the EU-bill programme are significant milestones for the implementation of the diversified funding strategy.
The EU bill programme brings a new tool into our toolbox allowing us to better manage the liquidity risk. It will also widen further our investor base and strengthen the international role of the euro.
Today’s Green Bond framework is a key aspect of the EU’s efforts to fight climate change.
We aim at issuing the first green bonds in October – and judging from the Commission’s experience in the first issuance of social bonds and the growing green bond market, we expect e demand for NGEU green bonds to be high. All of this is good news for citizens and companies relying on a swift recovery committed to the green transition. And, of course good news for Member States and their climate and digital ambitions as well as for the European Union as a whole because it strengthens our role at a global level.