BNC Positive Impacts and Blue Bonds

The Facility’s support can be used to prepare investments for inclusion into the portfolios of impact investors or for inclusion into the project pipelines of blue bond issuers.

Bonds are a fixed income investment, where bond investors become creditors to the issuing entity. Bond investors are paid a fixed interest rate (coupon) on a fixed schedule and will be returned their initial investment (principal) upon maturity of the bond. Green bonds finance projects and activities with environmental benefits, often facilitating the shift to a low-carbon, climate-resilient and resource-efficient global economy.

“Blue” bonds follow in their design green and other impact bonds, notably social and sustainability bonds. The difference between these and classic bonds is that they are issued on the promise to use the funds raised for specific green, climate and sustainable purposes.

Given the growing interest to use blue bonds for conservation and climate purposes, the IUCN has commissioned a paper that analyzes the emerging field of blue bonds. It identifies key action items necessary to scale up blue bonds so that they can been used to effectively finance coastal resilience activities and that are based on natural solutions. The paper is aimed both at potential blue bond issuers and related finance sector participants as well as at a broader audience. It aims to present key concepts and offers approaches to define a place for blue bonds within the emerging field of sustainable finance classification schemes. The report also offers ways how the BNC+ can be used in the preparation of blue bonds to promote adherence to the emerging sustainable blue economy financing principles. Download the paper here.