The Danish Financial Supervisory Authority interprets information requirements for green bond prospectuses

The term "green bonds" is not defined as such in Danish legislation or at EU-level, although the EU Taxonomy Regulation is applicable to "corporate bonds that are made available as environmentally sustainable". In accordance with this, the DFSA characterises "green bonds" as a term used for bonds where the issuer is committed to using the proceeds of the issue for the financing of "green economic activities". These activities may vary but the specific activities are usually published in a Green Bond Framework related to the issue.

The DFSA lists several requirements for information to be included in the prospectus in order for the prospectus to be sufficiently informative. These requirements include:

• A description of the green bonds and the activities which the issuer has deemed eligible for financing as "green economic activities". Those activities can, as mentioned above, be described in a Green Bond Framework. The issuer should also inform investors whether these criteria comply with the EU Taxonomy Regulation's (Regulation (EU) 2020/852, as amended) definition of activities considered environmentally sustainable. This information should be included in the general description of the offering programme;
• Information on the share of the proceeds which the issuer expects to use for financing of green economic activities. There must be consistency between the activities indicated as eligible for financing purposes by the issuer in the prospectus, and the activities which the bonds actually finance. If the issuer does not comply with the terms for use of proceeds set forth in the prospectus, the DFSA considers such non-compliance to be greenwashing. This information should be included in the section on "background and use of proceeds";
• The issuer should also disclose the share of the bond proceeds that is used for activities that are considered environmentally sustainable under the EU Taxonomy Regulation. The DFSA considers this information a minimum commitment to potential investors. The issuer should only commit to a share which can be verified by data (this may potentially be zero until data are available at a later stage), and if this is not possible, the issuer should describe the reason why such data are not available. This information should also be included in the general description of the offering programme;
• In relation to a potential Green Bond Framework, the DFSA also clarifies that if the issuer wishes to amend the framework at a later stage, this will not influence existing bond issues, i.e. such amendment will only influence future bond issues.

The information required above may also be necessary for potential investors that have to provide information themselves on how their underlying investments comply with the EU Taxonomy Regulation.