The International Capital Market Association (ICMA) along with the International Finance Corporation (IFC) – a member of the World Bank Group, United Nations Global Compact (UN Global Compact), United Nations Environment Programme Finance Initiative (UNEP FI), and the Asian Development Bank (ADB) – have developed a global practitioner’s guide for bonds to finance the sustainable blue economy.
The voluntary guidance provides market participants with clear criteria, practices, and examples for blue bond lending and issuances.
Blue bonds are a relatively new phenomenon and are still evolving. They represent activities that depend on the ocean and its resources which accounts for an estimated 5% of global GDP.
Traditionally, investors with a sustainable lens have focused on green bonds, which finance projects related to broad environmental objectives.
Based on the ICMA principles and gathering input from the financial markets, ocean industry and global institutions, the guide provides information on the key components involved in launching a credible blue bond.
This includes how to evaluate the environmental impact of blue projects and the steps needed to facilitate transactions that preserve the integrity of the market.
The new global guidance specifically help with defining blue economy typology and eligibility criteria as well as suggesting key performance indicators.
It also includes the latest case studies from the field and highlights the need for increased financing to achieve Sustainable Development Goal 14, and other global sustainability targets.
The development of a sustainable blue economy, including preventing the decline of marine fisheries, the expansion of low-carbon aquaculture, the scaling of offshore renewable energy and the decarbonisation of maritime transport is integral to tackling the triple planetary crisis of a rapidly changing climate, nature loss and pollution, the ICMA said.
“The ocean serves as a vital heat and carbon sink, absorbing about 31% of the carbon dioxide emissions released and regulating the global climate,” the association added.
The Guidance builds on existing market standards that underpin the global sustainable bond markets such as the Green Bond Principles and also draws on pre-existing specific blue guidance – UNEP FI’s Sustainable Blue Economy Finance Principles and associated Blue Finance Guidance, among others.
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