The law of 25 March 2025 conferring powers on the Financial Services and Markets Authority (FSMA) in the framework of the ‘EU Green Bonds Regulation[1]’ (or EuGB Regulation), has been published in the Belgian Official Gazette. The EuGB is a voluntary standard drawn up by the European Commission that is intended to foster the development of a market for 'green bonds' within the European Union. The regulation was published at the end of November 2023, and its provisions has applied since 21 December 2024.
The Belgian Law of 25 March 2025[2], in turn, confers on the FSMA various powers relating to supervising compliance with the standard provided for by the EuGB Regulation.
The EuGB Regulation establishes a standard to which bond issuers may adhere if they wish to be able to use the designation ‘European Green Bond’ or ‘EuGB’ for their bonds.
The EuGB Regulation’s standard requires, first of all, that the proceeds of the bond issue be allocated to environmentally sustainable activities within the meaning of the European Taxonomy Regulation. Only 15% of income from the bond may, under certain strictly defined conditions, be exempted from that principle.
The standard also requires heightened transparency about how the bond proceeds will be used.
The issuers of European Green Bonds must therefore publish, prior to issuance, a prospectus containing the information that is usually required for issuances or admissions to trading on a regulated market of these types of securities, with some exceptions where the issuer is a sovereign.
Furthermore, issuers of European Green Bonds must publish several documents whose contents and publication procedures are laid down in the EuGB Regulation:
- before the bond is issued, a ‘factsheet’ containing, among other things, information about the assets which the issuers plan to finance by means of the bond issue;
- after the bond is issued, an annual ‘allocation report’ in which the issuer sets out the allocation of the funds raised and
- after the bond proceeds have been fully allocated, an ‘impact report’ describing the environmental impact of the proceeds of the bonds concerned.
The above documents (with the exception of the impact report, for which external review is optional) must be submitted to external review, they must be published on the site of the issuer and, in the case of operations that require a prospectus approved by the FSMA, they must be notified to the FSMA (see Communication FSMA_2019_13).
Lastly, compliance with the standard is a key element in combating the risk of greenwashing and maintaining investor confidence in the green bond market. The EuGB Regulation distributes supervision of compliance with its requirements across three players:
- the external reviewer verifies, in particular, that the allocation of funds is compliant with the provisions of the EuGB Regulation (that is, the alignment of the funds with the Taxonomy Regulation);
- ESMA is tasked with registering the external reviewers and with ensuring that the latter meet the associated conditions;
- national authorities are among other things competent, in respect of issuers of European Green Bonds, for supervising compliance with the transparency obligations referred to above.
The Law of 25 March 2025 designates the FSMA as the competent authority in this area and confers various powers on it, including (under the conditions laid down by the Law):
- to require issuers of European Green Bonds to publish their factsheets, annual allocation reports and impact reports on the European Green Bonds and include in those documents the information required under the EuGB Regulation;
- to require issuers to publish reviews and assessments;
- suspending or prohibiting an offer or admission to trading on a regulated market of European Green Bonds;
- to suspend or prohibiting advertisements; and
- to prohibit an issuer from issuing European Green Bonds for a period not exceeding one year.
The Law of 25 March 2025 was published in the Belgian Official Gazette on 28 April 2025 and its provisions enter into force on 8 May 2025.
[1] Regulation (EU) 2023/2631 of the European Parliament and of the Council of 22 November 2023 on European Green Bonds and optional disclosures for bonds marketed as environmentally sustainable and for sustainability-linked bonds.
[2] Law of 25 March 2025 on the digital operational resilience of the financial sector and containing miscellaneous provisions.