Why Banks Aren't Embracing the EU's Green Bond Standard

While European bank green bond issuance is growing, adoption of the specific EU Green Bond Standard (EuGBS) is limited by the operational difficulty of full Taxonomy alignment. Most banks prefer standard ICMA-aligned bonds due to stricter DNSH requirements and reporting burdens in the EuGBS framework.

Key Takeaways

• 1.EuGBS adoption remains low compared to total green supply, with only 8 banks out of 160 issuers using the format since 2025.
• 2.The primary barrier to adoption is the requirement for full EU Taxonomy alignment, including complex technical screening criteria (TSC) and 'do-no-significant-harm' (DNSH) assessments.
• 3.Mortgage loans and real estate are the dominant assets in EuGBS portfolios because retail exposures are often exempt from the strictest alignment verifications.

Table of Contents

• EuGBs remain a small portion of bank EUR green supply
• EuGBs predominantly refinance green mortgage loans
• Renewable energy and green buildings are the main Taxonomy activities financed by bank EuGBs
• Use of proceeds of European bank green unsecured bonds
• Revisions to the technical screening criteria
• Proposed revisions to the Taxonomy criteria for buildings
• Do no significant harm criteria
• Taxonomy complexities to keep EuGBS issuance in check

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