Washington, D.C., September 6, 2023—The International Finance Corporation (IFC), a member of the World Bank Group, together with the International Capital Market Association (ICMA), 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.
Released today, the voluntary guidance provides market participants with clear criteria, practices, and examples for "blue bond" lending and issuances. Gathering input from the financial markets, ocean industry and global institutions, it provides information on the key components involved in launching a credible "blue bond," how to evaluate the environmental impact of "blue bond" investments; and the steps needed to facilitate transactions that preserve the integrity of the market.
The new global guidance helps:
Define blue economy typology and eligibility criteria
Suggest key performance indicators;
Showcase latest case studies from the field; and
Highlight the critical 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 decarbonization of maritime transport is integral to tackling the triple planetary crisis of a rapidly changing climate, nature loss and pollution. 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 transition to a sustainable blue economy is instrumental to achieving the goals of the Paris Agreement, with 20% of the reduction in GHG emissions that need to take place in blue economy sectors.
The Guidance builds on the existing global market standards that underpin the global sustainable bond markets and also draws on pre-existing specific blue guidance: ICMA Green Bond 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, and the IFC's Guidelines for Blue Finance.
ICMA: "We are very pleased to support this global practitioner's guide for bonds to finance the sustainable blue economy. Green bonds that focus on blue projects, also known as "blue bonds", have great potential to expand the pool of capital market finance dedicated to the blue economy." said Nicholas Pfaff, Deputy CEO and Head of Sustainable Finance, ICMA
UNEP-FI: "We welcome the launch of the global practitioner's guide for bonds to finance the sustainable blue economy, which explains how to align bond issuance with SDG 14 - Life below water and brings clarity to the blue bond space for the first time. This is a big step forward for both prospective blue bond issuers and financial institutions looking to support a Sustainable Blue Economy," said Eric Usher, Head of UNEP FI.
UN Global Compact: "A healthy ocean is not only a vital carbon sink and home to 80% of all life on earth, it can also be a source of innovation to improve climate, nature and livelihoods. Blue bonds are a crucial instrument to deliver financing for marine-based solutions such as clean energy; transport and food systems. This guidance is an important step towards providing the global market with direction and consistency to support investment in a thriving sustainable blue economy which benefits everyone." Sanda Ojiambo, CEO and Executive Director, UN Global Compact
Asian Development Bank: "ADB's Healthy Ocean Action Plan recognizes the urgent need to scale up financing for the blue economy in order to protect our oceans and the livelihoods they support. Our Blue Bond Incubator has provided valuable support for both government and private sector issuers in the region. This guidance addresses the need for scientific rigor and transparency to further raise investors' confidence and promote the growth of this emerging investment asset," said ADB Vice-President for Finance and Risk Management, Roberta Casali.
IFC: "Recognizing the urgent need to provide the market with cohesive guidance on blue project eligibility criteria, blue bond issuances, and blue finance, we have-- together with ICMA, ADB, UNEP-FI, and UN Global Compact -- compiled the most comprehensive guide to date supporting a healthy, sustainable, and growing blue economy, " said Mohamed Gouled, Vice President of Industries, IFC.
About IFC
IFC—a member of the World Bank Group—is the largest
global development institution focused on the private sector in emerging
markets. We work in more than 100 countries, using our capital, expertise, and
influence to create markets and opportunities in developing countries. In
fiscal year 2023, IFC committed a record $43.7 billion to private companies and
financial institutions in developing countries, leveraging the power of the
private sector to end extreme poverty and boost shared prosperity as economies
grapple with the impacts of global compounding crises. For more information,
visit www.ifc.org.
About ICMA
International Capital Market Association (ICMA) promotes well-functioning cross-border capital markets, which are essential to fund sustainable economic growth. It is a not-for-profit membership association with offices in Zurich, London, Paris, Brussels and Hong Kong, serving around 600 member firms in 66 jurisdictions. Among its members are private and official sector issuers, banks, broker-dealers, asset managers, pension funds, insurance companies, market infrastructure providers, central banks and law firms. It provides industry-driven standards and recommendations, prioritising four core fixed income market areas: primary, secondary, repo and collateral and sustainable finance. ICMA works with regulatory and governmental authorities, helping to ensure that financial regulation supports stable and efficient capital markets.
About UNEP-FI
UNEP Finance Initiative brings together a large network of banks, insurers and investors that collectively catalyzes action across the financial system to deliver more sustainable global economies. For more than 30 years the initiative has been connecting the UN with financial institutions from around the world to shape the sustainable finance agenda. It has established the world's foremost sustainability frameworks that help the finance industry address global environmental, social and governance (ESG) challenges. Convened by a Geneva, Switzerland-based secretariat, more than 450 banks and insurers with assets exceeding US$100 trillion work together to facilitate the implementation of UNEP FI's Principles for Responsible Banking and Principles for Sustainable Insurance, as well as three UN-convened net-zero alliances. Financial institutions work with UNEP FI on a voluntary basis and the initiative helps them to apply the industry frameworks and develop practical guidance and tools to position their businesses for the transition to a sustainable and inclusive economy.
About UN Global Compact
As a special initiative of the United Nations Secretary-General, the UN Global Compact is a call to companies worldwide to align their operations and strategies with Ten Principles in the areas of human rights, labour, environment and anti-corruption. Our ambition is to accelerate and scale the global collective impact of business by upholding the Ten Principles and delivering the Sustainable Development Goals through accountable companies and ecosystems that enable change. With more than 18,000 companies and 3,800 non-business signatories based in over 160 countries, and 62 Local Networks, the UN Global Compact is the world's largest corporate sustainability initiative — one Global Compact uniting business for a better world. For more information, visit our website at unglobalcompact.org.
About the Asian Development Bank
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogues, loans, equity investments, guarantees, grants, and technical assistance.
