FRANKFURT — A German government auditor has criticized the standards used by the European Union for its “green bonds” that aim to help governments and companies finance efforts to combat climate change.
An internal report seen by Reuters said the current rating system used by the German government and EU Commission for sustainable securities “demands more commitment to climate protection from private parties than from themselves.”
It said the criteria set for the bonds are “less ambitious and less transparent” than the benchmarks demanded from private issuers.
The lax standards could invite accusations of so-called greenwashing and could “permanently damage the confidence of investors who want to invest capital in a green way,” the German Supreme Audit Institution said in the June 9 report.
Germany’s Finance Ministry and the EU Commission had no immediate comment when contacted by Reuters.
The EU is expected to become one of the biggest issuers of green bonds globally, ramping up sales as part of a multi-billion euro coronavirus recovery fund.
A German parliamentary budget committee will discuss the report on Wednesday and submit recommendations to parliament. (Reporting by Marta Orosz; writing by Tom Sims; Editing by Ros Russell)