Both supervisors and policymakers see securitisation as a key instrument for mobilising the private capital needed to finance the transition to a climate-neutral European economy and to strengthen digital infrastructure. The legal framework for sustainable securitisation, however, is still being built.
Key points
- For mortgage-loan and auto-loan/lease-backed securitisations, the originator is expected to disclose available information on the environmental performance of the financed assets — or, alternatively, available data on the principal adverse impacts on sustainability factors.
- The EU Taxonomy provides a common vocabulary for environmentally sustainable economic activities but does not by itself define a "green securitisation".
- The European Green Bond Standard (EUGBS) is a parallel — not a substitute — regime for issuers seeking a gold-standard sustainable label.
- Further regulatory calibration is expected, including on capital treatment and dedicated disclosure templates for sustainable securitisations.
The starting point within the Securitisation Regulation
For securitisations backed by residential mortgage loans or by auto loans or auto leases, the Regulation expects the originator to publish available information on the environmental performance of the financed assets. Alternatively, the originator may publish available information on the principal adverse impacts of those assets on sustainability factors. The two paths reflect a pragmatic recognition that the available data differs between asset classes and originators.
The interplay with the EU Taxonomy
The Taxonomy Regulation defines which economic activities qualify as environmentally sustainable under EU law. It does not itself define a "green securitisation", but it provides the vocabulary. In practice, a securitisation is often labelled "green" if the use of proceeds is linked to Taxonomy-aligned activities or if the underlying pool is (or is expected to become) Taxonomy-aligned.
Three channels are commonly combined:
- Use of proceeds — the originator uses the refinancing raised to fund Taxonomy-aligned activities.
- Asset-based — the underlying pool itself consists of Taxonomy-aligned exposures (for example, loans to finance energy-efficient buildings).
- Linked — the securitisation includes sustainability-performance triggers (for example, coupon step-downs tied to portfolio-level KPIs).
European Green Bond Standard
The European Green Bond Standard establishes a voluntary gold standard for bonds whose proceeds fund Taxonomy-aligned activities. Where a securitisation note is structured as a European Green Bond, the bond-level rules apply in addition to the securitisation-specific framework. Coordinating the two regimes is a central part of the legal workstream for sustainable securitisations.
The policy debate
Several strands of the reform debate converge on sustainable securitisation:
- Calibration of capital requirements for retained senior positions in synthetic securitisations used to fund green lending.
- Dedicated disclosure templates for sustainable securitisations.
- Coordination between securitisation disclosures and the broader SFDR/CSRD sustainability-disclosure ecosystem.
- The role of sustainable securitisation within the Capital Markets Union.