The EU continues to evolve its sustainable finance framework. In 2024, as part of amendments to the EU Listing Act, the EU introduced phase in requirements for Green Bond disclosures. Those requirements are set to enter force on June 5, 2026. A Linklaters’ memo describes the new requirements, stating:
“The DR includes a new Article 23 relating to non-equity securities “advertised as taking into account ESG factors or pursuing ESG objectives” (“ESG Bonds”), which includes use of proceeds bonds as well as sustainability-linked bonds. This will require additional information to be included in the prospectus following disclosure items in the new Annex 23 (the “ESG Disclosure Annex”).
The ESG Disclosure Annex is a building block, to be used alongside the other disclosure annexes applicable to bonds. This is important because it is the first time that the PR will require the disclosure of specific items for ESG bonds. Until now issuers have been permitted to use their own assessment of the information that will be material for investors in accordance with the overarching necessary information test in Article 6 of the PR.”
These new disclosure obligations, like the proposed SFDR rework, would strengthen and expand sustainability disclosures in EU markets. Sustainable finance seems to be one area of sustainability where the EU isn’t simplifying or rolling back regulation.
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