From retail-accessible to retail-facing: green finance for EU households

The EU has built a sophisticated sustainable-finance framework and a large market for labelled sustainable bonds. However, this has not yet translated into a similarly developed market for products designed around household needs. The challenge is therefore not a lack of sustainable instruments, but converting existing supply into products that citizens can find, understand, trust, compare and access through ordinary saving and investment channels. Green use-of-proceeds bonds provide the most developed supply base, but much of this market remains primarily structured for institutional rather than retail investors. 

A key distinction is between instruments that are merely retail-accessible and those that are genuinely retail-facing. Achieving scale requires more than legal availability: products need repeatable issuance, credible sustainability claims, manageable entry thresholds, clear risk and return characteristics, effective distribution and compatibility with national tax and savings frameworks. Household participation also depends on trust, comprehension, familiarity and visibility alongside environmental preferences. Experience outside the EU further suggests that retail scale is easier to achieve when sustainable products build on financial institutions, distribution channels and savings arrangements that households already use. 

Priorities include developing a common retail-facing product architecture, providing concise and decision-useful sustainability information, integrating suitable products into mainstream distribution channels, reducing fixed issuance costs, improving compatibility with national savings frameworks, strengthening supervisory convergence and monitoring participation breadth alongside capital mobilised. The objective is to enable credible green and sustainability-linked products to compete effectively within ordinary household saving and investment choices. 

Apostolos Thomadakis is Head of Research at ECMI, and Senior Research Fellow and Head of the Financial Markets and Institutions Unit at CEPS. Gabriele Freo is an Associate Researcher at CEPS. Pierangela Peruzzo was a Visiting Fellow at CEPS.