Stockholm (NordSIP) – The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published a Consultation Paper on the remaining Regulatory Technical Standards (RTS) for external reviewers under the European Green Bonds (EuGB) Regulation.
The EuGB Regulation entered into effect on 21 December 2024 creates. It a creates a set of uniform requirements for issuers of bonds that wish to use the designation ‘European green bond’ or ‘EuGB’ for their environmentally sustainable bonds. The standard relies on the detailed criteria of the EU taxonomy to define green economic activities, ensures levels of transparency in line with market best practice and establishes supervision of companies carrying out pre- and post-issuance reviews at European level.
The EuGB empowers ESMA to develop and implement regulatory and technical standards specifying certain provisions of the external reviewer regime. These are being delivered in two packs, according to the legal deadlines contained in the Regulation, both of which require the publication of a Consultation Paper.
The First Consultation
The first Consultation Paper, for which a Final Report was published on 14 February 2025, covered four draft RTS and one Implementing Technical Standard (ITS). The first RTS focused on criteria to be assessed at the time of registration relating to senior management, board members and analytical resources. The second RTS was concerned with criteria to assess sound and prudent management and management of conflicts of interest.
The third RTS considered criteria for assessing the knowledge and experience of analysts. The last of the RTS focused on criteria applicable to the outsourcing of assessment activities. The ITS contemplated the standard forms, templates and procedures for the provision of registration information.
ESMA conducted this public consultation from 26 March to 14 June 2024 and received a total of 21 responses.
The Present (Second) Consultation
The second Consultation Paper is the second of two public consultations on these technical standards and aims to collect views, comments and opinions from stakeholders and market participants on the appropriateness of the proposed Level 2 measures in complementing the Regulation. The RTS relate to the following aspects of the external reviewer regime and its adequacy.
This Consultation Paper covers five draft RTS and one ITS. The first RTS is on the criteria for assessing the appropriateness, adequacy and effectiveness of the systems, resources and procedures. The second RTS is focused on criteria for assessing whether the compliance function has the authority to discharge its responsibilities properly and independently and for assessing the necessary resources, expertise and access to relevant information.
The third RTS focuses on criteria for assessing the soundness of administrative and accounting procedures and internal control mechanisms and the effectiveness of control and safeguard arrangements for information processing systems. The fourth RTS considers criteria for assessing whether the information used when providing reviews is of sufficient quality and from reliable. The fifth RTS contemplates the information, form and content of applications for recognition. Finally, the ITS considers standard forms, templates and procedures to notify ESMA of material changes in the information provided at registration
According to ESMA these technical standards will enhance the robustness and transparency of external reviews of European Green Bonds and in turn boost investors’ confidence that their capital is genuinely driving the green transition.
The Road Ahead
ESMA will consider the feedback received to the consultation by 30 May 2025 and expects to publish a Final Report and submit the draft RTS to the European Commission for adoption by 21 December 2025 at the latest. The technical standards will also be subject to non-objection by the European Parliament and Council.
ESMA particularly encourages external reviewers operating during the transitional regime or intending to apply to become an ESMA-registered external reviewer of European Green Bonds to participate in the consultation.
