Insurance Europe: Adapt measures to make EU green bonds successful

The European Commission still has to make a number of folds to make green bonds a real success, according to Insurance Europe, the European umbrella organization for insurers.

The current proposal of the European Commission (EC) should make it easier for companies, including insurers, to invest capital in green bonds in order to meet the Climate Objectives of the European Green Deal. According to Insurance Europe, the EC proposal can be improved in parts:

• Once an EU green bond meets the EUGBS requirements, this status should apply for the entire maturity of the bond, regardless of subsequent changes to the eu taxonomy screening criteria. The current risk, that a bond may lose its 'green' status during its term, makes green EU bonds less attractive to investors.
• Prevent ESG agencies that supervise EUGB reviewers on the basis of accreditation criteria from being given market and price-determining powers, such as in the credit rating agency market. Such powers, combined with limiting the number of authorised accreditation agencies, can lead to higher issuance costs for green bonds and thus hinder their issuance.
• The sector welcomes the so-called "flexibility spocket" to scan the non-taxonomy-aligned yields. Also because insurers apply the required criteria of the Corporate Sustainability Reporting Directive (CSRD) and the "Do Not Significantly Harm" (DNSH) in their transition plans.
• Develop an EU Taxonomy of transitional measures to enable the financing of transition projects using EU green bonds.
• The EU taxonomy is based on activity level, while bond financing is mainly at project level. Companies financing sustainable projects with bonds that meet EUGBS requirements should be able to align these projects with the activity-based screening criteria.

Green bonds enable green investments

The Association sees the use of green bonds as an important key to unlocking more money for green investments and thus bringing the realization of the Climate Objectives from the European Green Deal closer. As far as the Covenant is concerned, the sustainable investments could best be used for projects that also bear fruit in the longer term, such as making the energy supply more sustainable, housing construction and climate adaptation measures. After Prinsjesdag in 2019, the Association already called for the Netherlands to be made more 'climate resilient'.