Since 2020, the Federal Republic of Germany has been issuing green Federal securities year after year, totalling € 73.25 bn to date. Every year, the ‘core green bond team’, with the support of the interministerial working group, consisting of seven federal ministries, is responsible for 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.

• 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.

Naturally, the expenditures allocated in the allocation report 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. At the beginning of the reports, these significant contributions are summarised and presented in a clear and concise way.

In addition to the aggregated and quantitative data, interested readers will find additional details on each budget item of the Green Bond programme in the further course of the reports: qualitative descriptions, case studies, metrics, limitations and links to more in-depth information such as research project reports, current project profiles or external evaluation reports. In this way, a high degree of transparency is achieved for special government spending areas such as international cooperation or basic research. In this way, the federal government makes clear in its public communication the strict requirements and examinations it has set for itself to ensure that the measures, activities and projects carried out and assigned to the green Federal securities are truly green.

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 makes it possible to directly compare green and conventional twin bonds and provides a green reference interest rate at a glance. Or with the detailed reporting that transparently and reliably informs investors about the use of proceeds.

In order to continue to actively participate in the further development of market standards and to further motivate other issuers to issue green bonds, Germany is currently revising its fundamental green framework. This will take into account developments such as the entry into force of the EU taxonomy, insofar as they can be applied to the green spending portfolio. The update, which is scheduled for next year, is intended to confirm the established framework for green Federal securities, which is valued by investors for its quality, under current standards. The Federal Republic of Germany is thus underlining its strong commitment to sustainable finance and its role as a promoter of the market for sustainable financial products. It will continue to offer liquid green bonds across all benchmark maturities of the curve and maintain a high level of market transparency.