ESG Finance: Regulatory Framework And Challenges

ESG finance is a fundamental tool for transitioning to a sustainable economy, enabling the financing of environmentally sustainable investments through specialized financial products.

Despite their significance, the absence of a unified regulatory framework for green loans presents challenges, unlike green bonds, which are now governed by Regulation (EU) 2023/2631.

Green bonds and the European Green Bond Standard (EuGBS)

Green bonds are financial instruments that allow the raising of capital for projects such as renewable energy sources, energy-efficient building upgrades, and clean transportation. The need for increased transparency and reliability led to the issuance of Regulation (EU) 2023/2631, which establishes the framework for European Green Bond (EuGBs).