With the Green Bond Standard (EUGBS) regulation being stricter than previous guidelines and voluntary to use, Denmark’s new Factsheet became the natural extension of the country’s ambitious climate policy. It sets a higher standard for transparency and environmental integrity and is a milestone development for the sovereign sustainable finance market.
“As the global green bond market continues to evolve, Denmark’s approach underlines how sovereign issuers can demonstrate leadership in mobilising capital for a sustainable future,” says Lars Eibeholm, Global Head of Sustainable Debt Capital Markets at SEB.
Lars Eibeholm says Denmark’s upcoming European Green Bond issuance will emphasise the country’s climate leadership and commitment to issuing the highest-quality green bonds, consequently moving the market best practice for sovereigns forward.
A cornerstone of Denmark’s EUGBS Factsheet is the complete alignment with the EU Taxonomy regulation. This means that the proceeds from Denmark’s green bonds will be allocated exclusively to fully Taxonomy-aligned activities. These activities can include subsidies for solar and wind power, investments in electricity transmission infrastructure, electrification of the national railway network, and afforestation and wetland restoration projects that sequester carbon dioxide and enhance biodiversity.
Sustainable Fitch, a rating agency, reviewed the factsheet before its issuance, confirming that all eligible green expenditures meet the three core criteria in the taxonomy regulation. Moreover, as the review confirmed, Denmark’s new EUGBS factsheet will continue to align with the Icma Green Bond Principles, on which its previous green bond framework was built.
The Icma Green Bond Principles (GBP) are widely used voluntary guidelines designed to promote the integrity and transparency of the green bond market. The International Capital Market Association (Icma) is a global organisation representing capital market participants’ interests.