The role of Green Bonds in the EU Capital Markets Union

This statement from the Climate Bonds Initiative responds to a European Union consultation on the Capital Markets Union, arguing that the EU must take active steps beyond supporting market guidelines to scale the green bond market. The document outlines how existing EU tools and priority areas—such as SME financing, securitisation, and the European Fund for Strategic Investments—can be leveraged to close significant low-carbon investment gaps in the EU and globally.

• The green bond market experienced rapid growth between 2013 and 2014, with annual issuance rising from just under EUR10bn to EUR32.5bn. However, this remains insufficient to meet climate targets, as the EU requires EUR200bn of low-carbon investment annually until 2020, while global requirements are estimated at EUR780bn annually for the same period.
• The EU can scale the green bond market by increasing issuance volume from public institutions, providing credit enhancement to improve risk-return profiles for institutional investors, and supporting market-led standards to improve the discoverability of robust investments.
• Green securitisation is proposed as a critical tool to aggregate small-scale low-carbon assets—such as residential PV solar installations (typically worth EUR24,000) or commercial energy efficiency retrofits (EUR880,000 to EUR9m)—into bond issuances of EUR200m or more, which are typically required by bond market investors.
• The document recommends that the European Fund for Strategic Investments (EFSI), which aims to mobilise EUR315bn, prioritise low-carbon and climate-resilient investments. This would help improve the risk-return profile of green bonds during a transition phase, making them more attractive to institutional investors requiring investment-grade products.
• The Climate Bonds Initiative suggests the EU establish a specific 'Low-carbon and Climate-resilient Investment Project Pipeline' to address information gaps for investors. Potential projects for such a pipeline include offshore electricity infrastructure in the North Sea region, urban networks, smart cities, and flood defenses.
• There is significant potential for a green covered bond market in Europe, specifically for mortgage-backed covered bonds earmarked for green buildings. A May 2015 issuance of EUR500m by BerlinHyp received EUR2bn in investor orders, demonstrating strong demand.
• The Climate Bonds Standard provides asset-specific criteria for the transition to a low-carbon economy, developed by technical and industry working groups and approved by a Board representing investors with over EUR30 trillion in assets under management.

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} }