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Taxonomy takeaways for buildings: reprieve for green covered bonds?

Neil Day

Neil Day

The Covered Bond Report

With the publication of the Delegated Acts on EU Taxonomy 21 April 2021 the European Commission scored on its Green Deal and Next Generation Europe agenda.
Yet, will the Taxonomy really mark the beginning of an era of financial greening – is it a “shopping list for the future”?

On occasion of the webinar co-hosted by ICMA, Covered Bond Report and vdp on April 27, panelists Christa Clapp – Cicero, Frank Damerow – LBBW, Sean Kidney – Climate Bond Initiative, and Udo Riese – AGI, discussed their first insights into the EU-Delegated Acts.

They unanimously acknowledged the great potential of the EU Taxonomy but adverted there are still shortfalls and follow-up work to be done.

A big issue – not only for banks – with the Taxonomy requirements continues to be data availability. Here, clearly more efforts are needed.

Instead of placing regulatory burden on the financial sector exclusively, there was consent it would be appropriate to implement desired sustainability standards in corresponding environmental regulation first.

Further harmonisation is needed as well, e.g. to do away significant differences in national Energy Performance Certificates.

Some found DNSH requirements especially onerous and were reluctant that 100 % taxonomy compliance would be achievable for the time being.

All experts agreed that the EU taxonomy and the Delegated Act are not perfect but a good start with the right balance between ambition and realism.

There is a replay option of the webinar (60”) on ICMA media library.