- New publication provides insights for companies to access this emerging market.
IDB Invest, a member of the IDB Group, and the UN Global Compact are releasing an executive report to facilitate the access of private companies in Latin America and the Caribbean to the growing blue bonds market, offering a wide range of approaches related to water management and the sustainable use of oceans, in line with the Sustainable Development Goals and the Paris Agreement.
The new publication “Accelerating Blue Bonds Issuances in Latin America and the Caribbean” provides a comprehensive look at a new asset class to mobilize capital to solve water-related challenges, create sustainable ocean business opportunities and signal responsible ocean stewardship.
Capital to finance the transformation to a sustainable ocean economy is readily available, with $90 trillion projected to be invested over the next decade on infrastructure alone, the majority on or near the ocean.
The publication indicates that blue bonds can be issued as a subset of green, social and sustainable bonds, that are grounded in globally recognized principles. While there is not yet a widely accepted set of blue bond principles, issuers are encouraged to use the International Capital Markets Association’s (ICMA) social and green bond principles, adapted to a blue use of proceeds. Moreover, The UN Global Compact’s Sustainable Ocean Principles can serve as a guide for responsible business practices.
Maintaining a healthy and productive ocean is a critical precondition to achieve for the achievement of all 17 Sustainable Development Goals adopted by all United Nations Member States in 2015. Covering 70 percent of the planet, the ocean helps mitigate climate change by storing large amounts of carbon dioxide, known as blue carbon. The blue economy is of particular relevance for the region. Latin America and the Caribbean have a coastline that extends over 70,000 kilometers, and in the Caribbean in particular, all of its population live on the coast.
So far, four blue bonds have been issued globally, starting in 2018 with the Seychelles government. These blue bonds have focused on investments within marine conservation and restoration, as well as water-related infrastructure. By expanding eligibility criteria and frameworks, blue bonds can also fund business opportunities that positively impact the ocean and support sustainable development.
Blue bond issuances may come from issuers at various stages of their sustainability journey, including companies that are in transition, so that they access the market to accelerate progress toward an inclusive, resilient and low-carbon future.
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.