Legal & Regulatory News

European Banking Authority publishes report on the development of a framework for sustainable securitisation

02 March 2022

On 2 March 2022, the European Banking Authority (EBA) published a report analysing the developments and challenges of introducing a framework for sustainable securitisation.

The EBA report the following key issues in connection with this report:

  • whether and how EU regulations on sustainable finance could be applied to securitisation (including the EU Green Bonds Standard (EU GBS));
  • the relevance of a dedicated regulatory framework for sustainable securitisation; and
  • the nature and content of sustainability-related disclosures for securitisation.

The EBA report suggests that it would be premature to establish a dedicated framework for green securitisation at this point in time. Instead, the EBA is of the view that the upcoming EU Green Bond Standard should be extended to apply to securitisation. This extension would include a number of adjustments such as the need for requirements to apply at originator level (rather than issuer level), which would, in effect, allow a securitisation that is not backed by a portfolio of green assets to meet the EU GBS requirements provided that the originator commits to utilising proceeds to fund new green assets.

Click here to access the EBA report.