“Selling Seychelles for the Seashore“ (Blue Bonds)
I had to use the title from Fortune Magazine; it was too clever.
We may not be able to buy our way out of all our environmental problems, but harnessing the financial strength of markets radically increases the funding available (over charities) to get things done. You may have heard of Green Bonds that help the environment.
Last year, the market for “green bonds,” a decade-old asset class that funds environmentally friendly projects, reached a record $163.7 billion, up from $36.6 billion issued in 2014, according to the Climate Bonds Initiative, an international not-for-profit.
Now, with the help of innovative banks, there are Blue Bonds to protect the oceans.
Now there is a wave of novel financial instruments aimed at saving the oceans and alleviating the world’s water crises. They include “blue bonds,” which, structured like their chromatic cousins, are being used to raise money to tackle issues from the ocean’s plastic waste problem (Morgan Stanley recently sold $10 million worth) to wastewater management. Last year, Seychelles launched a multimillion-dollar blue bond, and the Nordic Investment Bank, on behalf of Baltic and Nordic countries, did so this year. “We’re just scratching the surface,” says Navindu Katugampola, head of green, social, and sustainability bonds at Morgan Stanley.