Introduction

The European Green Deal and the 2050 climate-neutrality objective necessitate large-scale investment across sectors such as clean mobility and energy efficiency. While public and institutional capital is central, household savings represent a significant pool of potential capital. Currently, the EU household balance sheet is only weakly connected to identifiable transition assets. This report examines how green bonds, sustainability-linked bonds, and green savings products can be designed to be genuinely retail-facing, ensuring they are accessible and understandable for households through ordinary savings and investment channels.

A framework for scaling retail-facing green finance

Scaling retail green finance is defined by the interaction of supply, distribution, demand, and trust. A critical distinction exists between instruments that are merely retail-accessible (legally available but structured for wholesale markets) and those that are truly retail-facing. Retail-facing products are designed around the realities of non-professional investors, featuring low-friction access, manageable entry thresholds, and clear financial terms. The framework assesses products based on their accessibility, attractiveness, integrity, and contribution to transition financing.

EU landscape mapping – what exists today

The EU possesses a substantial and mature sustainable finance supply base, accounting for a significant share of labelled sustainable bonds globally. Green use-of-proceeds bonds remain the most developed segment. However, issuance is concentrated within five Member States (France, Germany, the Netherlands, Spain, and Sweden), which accounted for 66% of EU27 issuance in 2025. While 92% of labelled bonds are issued under a framework and 84% receive pre-issuance external reviews, post-issuance transparency is less consistent. Only 74% of labelled bonds have a post-issuance report, and just 39% have a post-issuance external review, which affects the durability of sustainability claims.

Barriers to scale: legal, regulatory, market and supervisory frictions

Several barriers prevent the conversion of sustainable instruments into retail-facing products. Regulatory fragmentation hinders cross-border portability, as national requirements regarding language, marketing, and tax treatment remain inconsistent. Conduct requirements under MiFID II, such as suitability and appropriateness assessments, can increase onboarding costs for distributors. Furthermore, national tax and savings regimes significantly impact product attractiveness. For instance, France’s Livret de développement durable et solidaire (LDDS) integrates sustainability into a mainstream regulated product, whereas other jurisdictions lack comparable uniform wrappers.

International perspective: design lessons for retail-facing green finance

Experience from non-EU jurisdictions offers valuable lessons. In the UK, the Green Savings Bonds are integrated into the established National Savings and Investments (NS&I) infrastructure, making the product familiar to millions of customers. Hong Kong utilises a retail bond distribution channel and a grant scheme to subsidise issuance and verification costs, addressing the barrier of fixed integrity costs. In the US, the municipal bond market has achieved scale through federal tax exemptions, with households directly holding 48% of outstanding municipal securities. These cases highlight that retail scale is easier to achieve when sustainable products leverage existing financial infrastructure and offer competitive after-tax returns.

From availability to adoption: what makes citizens act

Household participation is influenced by the structure of balance sheets, where financial assets are concentrated in deposits (30%) and equity or investment funds (38%), but debt securities account for only 3%. Adoption depends on products competing against established benchmarks for safety, liquidity, and simplicity. Trust is a critical driver, anchored in issuer identity, verification, and clear consequences for unmet commitments. Communication must be decision-useful; research indicates that disclosure overload and conceptual complexity can discourage participation at the point of decision.

From retail-accessible to retail-facing: policy recommendations

The report provides seven policy recommendations to facilitate retail green finance. First, the EU should develop a voluntary common retail-facing green product architecture. Second, a short, standardised retail sustainability summary should be created to explain propositions clearly to non-professional investors. Third, green products should be integrated into mainstream distribution channels, such as bank applications and investment menus. Fourth, fixed costs must be reduced through reusable documentation and shared technical support. Fifth, compatibility with national tax and savings-wrapper regimes should be ensured. Sixth, supervisory convergence in sustainability claims must be strengthened to reduce uncertainty. Finally, the breadth of household participation and capital mobilised should be monitored as separate outcomes.