Italy (and EU regulation)

EBA recommends adjustments to the proposed EU Green Bond Standard as regards securitisation transactions

On 2 March 2022, the European Banking Authority (EBA) published a report that analyses recent developments and challenges in introducing sustainability in the EU securitisation market. The report examines how sustainability could be introduced in the specific context of securitisation to foster transparency and credibility in the EU sustainable securitisation market and to support its sound development.

The EBA’s analysis shows that it would be premature to establish a dedicated framework for green securitisation. Rather, the EBA is of the view that the upcoming EU Green Bond Standard (EU GBS) regulation should also apply to securitisation, provided that some adjustments are made to the standard. The EBA also recommends that the Securitisation Regulation is amended in order to extend voluntary ‘principal adverse impact disclosures’ to non-STS (simple, transparent and standardised) securitisations. It also calls for further EBA work on green synthetic securitisation and social securitisation.

The report comprises five main chapters:

Chapter 2 provides an overview of the developments in the EU sustainable securitisation market, stressing both its characteristics and current limitations.
Chapter 3 examines the extent to which the EU GBS framework proposed by the European Commission would be adequate to capture the specificities of securitisation and whether some amendments to the EU GBS would be needed.
Chapter 4 investigates the relevance and the policy implications of establishing a dedicated framework for green securitisation at this juncture. It also includes broad policy considerations on how a potential dedicated framework for green securitisation may be designed.
Chapter 5 explores whether a dedicated framework for social securitisation should be developed, considering the very early stage of development of the EU social securitisation market as well as the ongoing EU regulatory developments in social bonds.
Finally, chapter 6 assesses how sustainability-related disclosures could be introduced for securitisation, building upon the Sustainable Finance Disclosure Regulation requirements.