The European Investment Bank has been at the forefront of guiding and advancing the green and sustainable bond market, becoming the first issuer of a green bond back in 2007. Now the EIB has met another significant milestone by issuing the largest transaction so far under a new regulation for green bonds, dubbed the premium standard for the market.
This so-called ‘gold’ label is the European Union’s Green Bond Standard, a framework that became applicable at the end of 2024 and aims to enhance integrity and standardise disclosure for better comparability of green bonds. While the EuGBS label is voluntary, it has been viewed as the gold standard due to the strict conformity of the use of proceeds to the EU Taxonomy for Sustainable and Economic Activities.
In 2025, issuers have started to sell bonds under the EuGBS label. A2A, the Italian utility company, brought the first transaction in January with a €500m deal. This was closely followed by a €1bn trade by Île-de-France Mobilités, the French state public transport network, which became the first public sector borrower to issue an EuGBS-aligned bond.
But the most significant transaction has come from the EIB with a €3bn climate awareness bond in April. This was not only the biggest EuGBS bond to date but also the first from a supranational and a frequent borrower in the capital markets. The bond was more than 13 times subscribed, with demand exceeding €40bn and led by BNP Paribas, Crédit Agricole, Deutsche Bank and LBBW.
Green bond pioneer
‘This transaction – our first climate awareness bond aligned with the EuGBS – continues the strategy we began in 2007 when we brought the first green bond to the market,’ said Aldo Romani, head of sustainable finance at EIB, who structured and executed that pioneering green bond 18 years ago. ‘The main motivation of our initiatives was and still is to create a framework for higher transparency and accountability allowing investors to monitor the flow of EIB’s disbursements for green projects,’ he added. ‘This approach has been honed by the establishment of the EU legislative framework on sustainable finance and notably by the EuGBS.’
As the ‘EU bank’, the EIB has been a natural leader in the discussion about EU legislation on sustainable finance and the application of the EU Taxonomy regulation, which entered into force in 2020 to create a common set of definitions for sustainable economic activities. ‘In the green bond space, we started gradual alignment with the EU Taxonomy in 2019 and reached full alignment of taxonomy-eligible allocations with the taxonomy criteria for substantial contribution in 2022,’ said Romani.
The EIB has also been gradually adapting the non-taxonomy components of its CAB framework, notably allocation and impact reports for both stocks and flows, presenting already available information in accordance with the EuGBS regulation.
Its first transaction under the EuGBS label has been the next step in this journey. ‘Alignment with the EuGBS is the culmination of this process and enhances at the same time the value of non-EuGBS-aligned CABs,’ said Romani. ‘It clarifies to the market that we are using both instruments as part of an overarching process improving the quality of the information we provide to investors on the use of proceeds.’
Manual for others to follow
Going forward, the EIB will issue CABs both with an EuGBS label and without, with both instruments remaining aligned to the International Capital Market Association’s Green Bond Principles – a complementary set of voluntary guidelines for green bonds. However, the EIB, with its inaugural EuGBS transaction, hopes to have provided a manual for other issuers and public sector borrowers to prepare and bring their own deals under this label.
The EuGBS had previously been heavily criticised for setting a bar too high for issuers to meet. At a forum by OMFIF’s Sovereign Debt Institute in April 2023 – shortly after the entry into force of the regulation – one third of the attendees said the EuGBS was a ‘wasted opportunity’ for borrowers, highlighting the frustration among issuers in aligning with this new regulation.
‘The distance between the GBP and the EuGBS is not as large as it has been depicted,’ said Romani. ‘If you consider non-taxonomy requirements, there is a very big overlap between EuGBS and GBPs.’ If issuers realise this, it may lead to more issuance under this format. The key thing is that issuers have a template to follow from the EIB.
Burhan Khadbai is Head of Content, Sovereign Debt Institute, OMFIF.
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