The role of Green Bonds in the EU Capital Markets Union

The Climate Bonds Initiative argues that the EU must go beyond supporting market guidelines to actively scale the green bond market. It recommends using the Capital Markets Union framework to increase issuance volume, provide credit enhancement via the European Fund for Strategic Investments, and develop 'green securitisation' to aggregate small-scale low-carbon assets. The document emphasizes that institutional investor demand is high but requires financially competitive products and clear standards, such as the Climate Bonds Standard, to ensure transparency and discoverability.

• The green bond market has experienced rapid growth, with annual issuance rising from just under EUR10bn in 2013 to EUR32.5bn in 2014, yet it remains insufficient to meet climate targets.
• Significant investment gaps exist in the EU and globally, with annual low-carbon investment requirements estimated at EUR200bn for the EU and EUR780bn globally until 2020.
• Many low-carbon projects are too small to attract bond market investors, who typically seek issuances of EUR200m or more; 'green securitisation' is proposed to aggregate these assets, such as residential solar installations (approx. EUR24,000) or energy efficiency retrofits (EUR880,000 to EUR9m).
• The European Fund for Strategic Investments (EFSI) should prioritize low-carbon and climate-resilient investments to improve the risk-return profile of green bonds, making them attractive to institutional investors requiring investment-grade products.
• The EU could establish a 'Green Project Bond Initiative' and a specific 'Low-carbon and Climate-resilient Investment Project Pipeline' to improve information sharing and project discoverability for investors.
• There is significant potential for a green covered bond market in Europe, exemplified by BerlinHyp's May 2015 issuance of a EUR500m green mortgage-backed covered bond which received EUR2bn in orders.
• While the Green Bond Principles provide broad guidelines, the Climate Bonds Standard offers the specific, asset-level criteria necessary for transparency, with developed standards for solar, wind, low-carbon buildings, and low-carbon transportation (Bus rapid Transit).

APA

Climate Bonds Initiative (2015). The role of Green Bonds in the EU Capital Markets Union. https://www.climatebonds.net/files/documents/publications/Climate-Bonds_Capital-Markets-Union-consultation2_2015.pdf

Chicago

Climate Bonds Initiative. The role of Green Bonds in the EU Capital Markets Union. 2015. https://www.climatebonds.net/files/documents/publications/Climate-Bonds_Capital-Markets-Union-consultation2_2015.pdf.

Wikipedia

{{cite press release |author=Climate Bonds Initiative |title=The role of Green Bonds in the EU Capital Markets Union |date=June 2015 |url=https://www.climatebonds.net/files/documents/publications/Climate-Bonds_Capital-Markets-Union-consultation2_2015.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{climatebondsinitiative2015role, author = {{Climate Bonds Initiative}}, title = {{The role of Green Bonds in the EU Capital Markets Union}}, publisher = {Climate Bonds Initiative}, year = {2015}, month = jun, url = {https://www.climatebonds.net/files/documents/publications/Climate-Bonds_Capital-Markets-Union-consultation2_2015.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }