When looking at the role of green and sustainable bonds in sustainable project financing, as we do in our Leverage Accelerator, we cannot but wonder how this works together with regulated crowdfunding. Green and sustainable bonds have proven effective in mobilizing institutional capital for large-scale climate and energy projects, linking measurable environmental impact with investor expectations. Yet, many promising initiatives – especially those led by SMEs or local municipalities – cannot always access incumbent capital markets directly. This is where crowdfunding offers an alternative route. It enables projects to attract diverse investors while maintaining transparency, accountability, and measurable impact.
Sustainable finance is reshaping how capital flows into high‑impact projects across Europe. Two significant developments, the European Crowdfunding Service Provider Regulation (ECSPR) and the emergence of green and sustainable bonds, including the new European Green Bond Standard (EuGBs), are helping mobilise money for innovation, climate action and social objectives. At first glance, crowdfunding under ECSPR and bond markets may seem like separate channels. But they are increasingly part of a complementary ecosystem that broadens access to capital for SMEs, project owners and investors alike.
What Is ECSPR and Why It Matters
The European Crowdfunding Service Provider Regulation (ECSPR) (Regulation (EU) 2020/1503) establishes a harmonised regulatory framework for investment‑ and lending‑based crowdfunding services across the EU. Under ECSPR, licensed crowdfunding service providers can facilitate offers of transferable securities and loans to retail and professional investors via online platforms, up to a €5 million threshold per project over 12 months. This regime increases transparency, investor protection and legal certainty for cross‑border crowdfunding across EU member states.
Under the regulation, crowdfunding platforms themselves are not issuers of securities in the traditional sense; rather, they help project owners and SMEs issue securities, such as shares or debt instruments, by hosting offers and performing due diligence. In practice, an ECSPR‑authorised platform enables an issuer to raise capital directly from investors but does not act as the issuer.
Green and Sustainable Bonds in the EU
In parallel with ECSPR, the EU has developed a sustainable finance framework that includes the EU Taxonomy for sustainable activities, disclosure obligations (e.g., SFDR), and standards for sustainable securities. A cornerstone of this framework is the European Green Bond Standard (EuGBs), a voluntary but robust standard that creates uniform criteria for bonds marketed as green within the EU. Proceeds of these bonds must be linked to environmentally sustainable activities that align with the EU Taxonomy, and issuers must provide transparent reporting and independent review.
Green bonds are normally issued through capital markets channels (e.g., corporate or sovereign debt markets) and are typically accessed by institutional investors, though retail participation is possible. According to EU data, the value of green bonds issued in the EU has grown rapidly and now represents a significant share of total bond issuance, reflecting growing investor demand for sustainable assets.
Where ECSPR and Green Bonds Connect
While ECSPR and green bonds function in different regulatory spheres, they share the same overarching goal: mobilising private capital to support sustainable, innovative and growth‑oriented projects. Here’s how they connect:
1. Shared Sustainability Goals
Both crowdfunding under ECSPR and green bonds contribute to channeling private investment toward economic activities that can have positive environmental or social impact. Crowdfunding platforms often list projects that align with sustainability goals, even if sustainability criteria are not mandated by ECSPR itself.
2. Financing at Different Scales
Crowdfunding (ECSPR): Targets smaller‑scale funding needs, typically up to €5 million, making it suitable for early‑stage SMEs, community projects, or local environmental initiatives that might not yet qualify for capital markets.
Green bonds: Serve larger financing needs, often well beyond €5 million, and are used by corporations, public authorities, or institutions to fund significant climate‑aligned investments.
3. Complementary Market Pathways
Projects that start with crowdfunding, for instance, to build early‑stage traction, may later scale to institutional financing channels, including green bonds, if they match the criteria for taxonomy‑aligned sustainable finance. ECSPR can thus serve as a feeder mechanism into larger sustainable capital markets.
Can Crowdfunding Service Providers Issue Green Bonds?
A key question for CSPs is whether platforms themselves can issue green bonds or similar instruments.
Direct issuance of green bonds by CSPs: Platforms authorised under ECSPR are not themselves issuers of bonds. Their role is to facilitate the issuance by project owners or SMEs of transferable securities, including debt instruments, within ECSPR’s €5 million limit. They do not issue bonds on their own balance sheet.
Green bond issuance by project owners via CSPs: In theory, a project owner could seek to issue a small debt instrument via an ECSPR platform that has sustainability characteristics. However, to label that instrument a European green bond under the EU standard, the issuer would still need to comply with the Green Bonds Regulation (including disclosure, taxonomy alignment, external review and often a prospectus under the Prospectus Regulation), which is generally more demanding and oriented to capital markets issuance.
Therefore, while CSPs can facilitate offerings of smaller sustainability‑linked debt securities (potentially marketed as green‑themed under voluntary standards or platform labels), they cannot themselves issue EuGBs as sovereigns or corporates do, nor can they simply “turn” an ECSPR debt offer into an EU‑regulated green bond without meeting the regulatory thresholds and disclosure requirements of the Green Bonds Regulation.
How CSPs Can Position Themselves in Sustainable Finance
CSPs can still play a meaningful role in sustainable finance by:
- Curating and promoting projects with demonstrable environmental and social impact, helping investors find sustainability‑aligned opportunities.
- Integrating sustainability criteria in platform due diligence and investor communications to attract a growing base of sustainability‑oriented investors.
- Educating issuers on pathways to scale, for example, how a project that begins funding via ECSPR could evolve to larger capital markets instruments (including green bonds) as it matures.
- Leveraging voluntary sustainable labels and impact reporting to enhance credibility of smaller debt or equity offerings among retail investors interested in sustainability.
By doing so, CSPs help bridge the gap between grassroots innovation and mainstream sustainable finance, reinforcing the EU’s broader goals of an inclusive, climate‑aligned financial ecosystem.
Two corners of the EU sustainable finance strategy
ECSPR and green bonds operate in different corners of the EU financial system, one focused on alternative finance for smaller‑scale capital formation, the other on deep capital markets for environmentally aligned investment. Yet they are part of a coherent EU sustainable finance strategy that expands access to capital while advancing transparency, investor protection, and environmental objectives.
For CSPs and the market at large, understanding how these instruments intersect helps position crowdfunding as both a standalone financing path and a potential contributor to the broader sustainable finance continuum. With sustainability increasingly central to investor decision‑making, CSPs that embrace and articulate sustainability linkages can strengthen their market relevance and impact.
