UNEP FI joins international coalition to develop guidance on blue bonds

28 June 2022

Five top international organisations jointly launch global guidance for bonds to finance the sustainable blue economy—a commitment to provide the global market with consistency and transparency.

On the sidelines of the UN Ocean Conference in Lisbon, UNEP FI, together with four of the top international organizations today announced their commitment to develop guidelines that would provide the global market consistency and transparency in financing the blue economy.

UNEP FI, the International Capital Markets Association (ICMA), the International Finance Corporation (IFC), the Asian Development Bank (ADB) and United Nations Global Compact are partnering to develop a global practitioner’s guide for bonds to finance the sustainable blue economy. It will aim to provide market participants with clear criteria, practices, and examples for blue bond lending and issuances. The five organizations are currently seeking further input from the financial markets, ocean industry and global institutions with the goal of producing the final edition in Autumn 2022.

Prior to the COVID-19 pandemic, the ocean (‘blue’) economy was expected to double from 2010 to 2030 to reach $3 trillion and employ 40 million people. Despite this size current investment falls far below what is needed to transition this to a sustainable blue economy. Blue finance has strong potential to close the financing gap and support a thriving sustainable blue economy, specifically, blue bonds are emerging as an innovative instrument with increased interest from investors, financial institutions, and issuers globally. However, the lack of universal frameworks as well as a robust pipeline of bankable investments are two barriers to achieving a sustainable blue economy (ocean panel, 2020).

ICMA provides the standards underpinning the global sustainable bond market with the Green and Social Bond Principles, the Sustainability Bond Guidelines, and the Sustainability-linked Bond Principles.  In 2021 98% of all sustainable bonds issued globally, were aligned to these principles. ICMA principles enable the issuance of blue-labeled bonds, but until now, blue issuers have not had access to global guidance for how to apply the ICMA principles for blue bonds. This has resulted in market fragmentation, investor hesitation, and slow growth of blue finance.

Bonds to Finance the Sustainable Blue Economy: a Practitioner’s Guide sees 5 organisations working together to provide the market with a cohesive guidance on blue project eligibility criteria, blue bond issuances, and blue lending. Support from the financial and private sector can drive a healthy, sustainable, and growing blue economy and this internationally recognized guidance will help build investor confidence and catalyze investments.

The Practitioners Guide on Blue Bonds:

  • Recognizes the critical need for increased financing to achieve Sustainable Development Goal 14 – to conserve and sustainably use the oceans, seas and marine resources for sustainable development – which encompasses a diverse range of sectors and project types.
  • Synthesizes ICMA principles, UNEP FI’s Sustainable Blue Economy Finance Principles and associated Blue Finance Guidance, the UN Global Compact’s Practical Guidance to Issue a Blue Bond and Sustainable Ocean Principles, the Asian Development Bank’s Ocean Finance Framework and Green and Blue Bond Framework, alongside the IFC’s Guidelines for Blue Finance.  Building on this foundation, the collaboration has further refined the blue economy typology and eligibility criteria, key performance indicators, and provided the latest case studies in the field.
  • Provides practical guidance for Corporate, Sovereign and Multilateral issuers to develop Blue Bonds. It provides eligibility criteria, step-by-step processes, and case studies for applying ICMA Principles to blue issuances.
  • Is now seeking further input from the financial markets, ocean industry and global institutions with the goal of producing the final edition in Autumn 2022.

Click here to discover UNEP FI’s financial community focused on the Sustainable Blue Economy, including leading guidance and principles for financial institutions.

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