The EU Green Bonds Regulation will be directly effective in Ireland from 21 December 2024.

The key provisions of the Regulation are summarised in our earlier insights here:

Green Bonds: Update on EU Green Bond Standard Regulation – Arthur Cox LLP

Key points for issuers are summarised in our earlier insights here:

EU Green Bond Regulation published in Official Journal: key points for issuers – Arthur Cox LLP

Domestic Irish regulations are expected shortly, setting out administrative penalties and other appropriate administrative measures for breaches of the Regulation.

The transitional period to facilitate the provision of services by external reviewers (ERs) will run from 21 December 2024 to 2 June 2026 while ESMA is putting its registration and supervision framework in place for ERs.  The Commission plans to adopt an implementing act on the EU Green Bond Standard in Q1 2025, specific to external reviewers.   A small number of the Regulation’s provisions (relating to the equivalence framework for third country ERs) won’t apply until 21 June 2026.

The key documents for issuers who opt to use the ‘European green bond’  or  ‘EuGB’  designation from 21 December 2024 are set out in the Annexes to the Regulation:

• The form of European Green Bond Factsheet (which must be completed by the issuer prior to issuing an EuGB).
• The form of European Green Bond Annual Allocation Report (which issuers must prepare for every 12-month period until the date of full allocation of the EuGB’s proceeds and, where applicable, until the completion of the CapEx plan).
• The form of European Green Bond Impact Report (issuers of EuGBs must, after the full allocation of proceeds and at least once during the lifetime of the EuGB, prepare and publish a report on the environmental impact of the use of the EuGB’s proceeds).
• The required contents of Pre-Issuance Reviews (which must be carried out by an ER before an EuGB is issued), Post-Issuance Reviews (which must be carried out by ERs and look at the European Green Bond Annual Allocation Report drawn up by the issuer), and Impact Report Reviews (which issuers may commission from ERs of the issuer’s European Green Bond Impact Report).

As highlighted by ESMA on its Issuer Disclosure webpage, issuers must notify ESMA of the publication of the following within 30 days of their publication:

Pre-issuance

• The completed European Green Bond Factsheet.
• The Pre-Issuance Review relating to the European Green Bond Factsheet.
• A link to the website where the prospectus can be consulted (in cases where a prospectus is published under the EU Prospectus Regulation)

Post-issuance

• Without undue delay after they are drawn up, the European Green Bond Annual Allocation Reports.
• Without undue delay after they are obtained, the Post-Issuance Reviews of the European Green Bond Annual Allocation Reports.
• Without undue delay after it is drawn up, the European Green Bond Impact Report.
• If applicable, the CapEx plan.
• If applicable, the Impact Report Review.

To meet the notification requirements to ESMA, issuers will need to complete the questionnaire on ESMA’s Issuer Disclosure webpage.

Environmentally Sustainable Bonds/Sustainability-Linked Bonds

Deliverables awaited from the European Commission (originally due by 31 December 2024) relate to the optional disclosure requirements included in the Regulation.  Those deliverables are:

• Guidelines with templates for voluntary pre-issuance disclosures for issuers of bonds marketed as environmentally sustainable, and sustainability-linked bonds.
• A Commission Delegated Act on the content, methodologies and presentation of post-issuance disclosures of bonds marketed as environmentally sustainable, and sustainability-linked bonds (an initial 4-week Commission consultation was launched on 17 December 2024).

For the purposes of the Regulation, a sustainability-linked bond is one whose financial or structural characteristics vary depending on whether the issuer achieves predefined environmental sustainability objectives (social and governance objectives are out of scope).

Aisling Kelly (Partner) and Maedhbh Clancy (Of Counsel) were part of a panel on Transition Finance and Bond Issuances in collaboration with Euronext Dublin as part of Sustainable Finance Week Ireland 2024.  The EU Green Bonds Regulation was a key point of discussion, and the level of take-up among issuers will be watched closely in 2025.

To discuss any aspect of the Regulation in more detail, please get in touch with your usual contact in our Debt Capital Markets Group.