Protection bid for EU bond investors

BRUSSELS:- Sellers of European green bonds that fail to comply with the bloc’s proposed rules should be liable for damages, according to a recommendation to lawmakers.

The European Union’s green bond standard should allow investors to seek compensation against rule breakers to deter malpractice, said the study requested by the European Parliament’s committee on Economic and Monetary Affairs.

Civil liability would boost the “rather weak” enforcement mechanism where regulators are neither required nor allowed to sanction issuers that do not comply with the rules, it said.

“Adding a layer of private law enforcement could directly compensate persons who suffer from greenwashing such as bondholders, complementing the efforts of public regulators,” author Nikolai Badenhoop of the European University Institute said in an interview. — Bloomberg