In an effort to support the growth of the “green bond” market, European regulators are consulting on the standards for firms that provide independent reviews of the green credentials of bond offerings.
The European Securities and Markets Authority (ESMA) published a consultation paper on proposed technical standards for “external reviewers” under its rules for green bonds.
The regulator said that these standards are expected to “boost investors’ confidence that their capital is genuinely driving the green transition” by enhancing the transparency and robustness of external reviews of green bonds.
Among other things, the proposed standards cover the quality and reliability of the data used in external reviews; the accounting standards and internal controls at these firms; and, the appropriateness, adequacy and effectiveness of firms’ compliance systems, resources and procedures.
The paper represents the second of two planned consultations on regulatory standards for external reviewers. The first consultation, which took place last year, covered issues such as registration requirements, conflict of interest rules, outsourcing, and analyst proficiency.
The latest consultation is open until May 30.
ESMA plans to finalize its standards, which will be subject to review by the European Parliament and Council, by Dec. 21.
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