Green Expenditures and Reporting
Since 2020, the Federal Republic of Germany has been issuing green Federal securities year after year, totalling € 87.75 bn to date. Every year, the ‘core green bond team' with the support of the interministerial working group (IMWG) is responsible for the reporting - starting with the compilation of green expenditures. These are the expenditures that were identified in the previous year's Federal budget as eligible for green Federal securities because they contribute, for example, to climate protection, adaptation to climate change or the preservation of biodiversity.
Under the first Framework 2020, the Bund has published the following reports for each issuance year:
- The allocation report is used to allocate these environmental, climate and nature conservation expenditures from the federal budget of the previous year to the annual issue volume of green Federal securities.
- The associated impact report then provides a transparent overview of the effects of these expenditures on the climate, the environment and nature.
Under the updated Framework 2026, Germany commits itself to reporting on both indicative and final allocations to eligible green expenditures and the impact of these expenditures:
- The catalogue and description of indicative eligible expenditure gives an overview of the indicative eligible green expenditures available for the allocation of Green German Federal Securities issued in that year
- The allocation provides details on the allocation of proceeds (nominal value) to eligible green expenditures after all issuances for the year are completed
- The impact report offers the highest possible degree of transparency to investors on the contribution made by the green expenditures to climate, environmental and nature protection.
Naturally, the expenditures allocated each year only represent a portion of the federal government's significantly larger commitment to sustainability, ecology and climate. However, it is a quality feature of green Federal securities that strict attention is paid to avoiding double counting, and only expenditures that are not part of other green bonds (e.g. from KfW, the EU or federal states) are considered.
The data and indicators reported in the impact reports are also diverse and adapted to the respective purpose, in line with the large number of different projects and objectives pursued. They are a testament to the wide range of funding measures and include, for example, the greenhouse gas emissions saved by climate protection projects (such as those of the National Climate Initiative), the kilometres of the German rail network that have been renovated and newly constructed, the noise barriers that have been built, the list of international environmental protection agreements and organisations supported (such as the IPCC or the Montreal Protocol), and the number of basic research projects carried out.
Video: Green Expenditures in the Federal Budget
(English language, film duration 8:24 minutes)
With its framework, allocation and impact report, Germany is aligning itself with international market standards such as the ICMA Green Bond Principles for green Federal securities. These are constantly evolving and best practices are emerging. The federal government is also making a significant contribution to this, whether it is with the Twin Bond concept developed by the Finance Agency, which provides a green reference interest rate at a glance, the early publication of the indicative eligible expenditure with the detailed reporting that transparently and reliably informs investors about the use of proceeds.