Securitisation and the Sustainability Regulation


Securitisation and the Sustainability Regulation

Does securitisation need its own sustainable securitisation framework?

In March 2022, the EBA issued its assessment on the establishment of an independent sustainable securitisation framework. The EBA initially came to the conclusion that, in terms of uniform implementation for all capital market segments, the use-of-proceeds approach at the issuer should also be decisive for securitisations, especially since there are still too few sustainable receivables for an asset-based approach. It would therefore be too early to issue a separate set of sustainability rules for securitisations. Instead, the regulations for securitisations should be in line with the European Green Bond Standard. Furthermore, the EBA published a first draft of the RTS for sustainability reporting of STS securitisations in a consultation on 2 May 2022.

The consultation focuses on the following topics
  • Requirements for originators regarding reliable and comparable ESG data
  • ESG data to be considered by originators in relation to sustainability strategies and underlyings for the preparation of their disclosure regarding principal adverse impacts.
  • Consistency with the Sustainable Finance Disclosure Regulation (SFDR)

In May 2023, the European Supervisory Authorities (ESAs), under the leadership of the EBA, further developed their position from 2022 and sent the final RTS on the reporting of sustainability criteria for securitisations to the European Commission. The focus is on the reporting of negative impacts of financed items (focus on cars and real estate), the so-called Principal Adverse Impact Indicators (PAI).

Further information

On the Sustainability Regulation in the section

Sustainable Finance