European Union headquarters

The European Securities and Markets Authority (ESMA) launched a consultation today on proposed standards for external reviewers — firms that provide independent opinions on whether bond offerings meet the requirements under green bond rules.

These reviews are intended to help curb the risk of greenwashing by ensuring that proposed green bond offerings meet environmental standards and aren’t overstating their green credentials.

This represents the first of two planned consultations to establish detailed requirements under the new green bond rules, which take effect Dec. 21 following a 12-month transition period. ESMA noted that it intends to publish the second consultation in the first quarter of 2025.

The proposals in today’s consultation set out proposed requirements for the registration and supervision of firms that seek to become external reviewers of green bonds, and aim to clarify the criteria used for assessing registration applications.

The regulator said the proposals seek to standardize the registration requirements in this area to level the playing field and lower barriers to entry.

The proposed requirements cover issues such as proficiency, dealing with conflicts of interest, standards for senior management and outsourcing.

The consultation is open to June 14.