What is a blue bond?
While green bonds are dedicated solely to projects that benefit the natural environment, blue bonds are more complex. As part of the sustainability bond spectrum, they aim to deliver financing to cover the broad scope of environmental, social, and economic issues facing the marine sector. They relate to all SDGs: not only those involving climate change, but also plastic waste, labor rights, and sustainable fisheries.
Recent guidance from the UN Global Compact1 suggests that blue bond issuers should fulfill two conditions: have a relevant corporate sustainability strategy in place addressing the SDGs, and a clear target for the bonds reflected in one or more KPIs. The two main options are use-of-proceeds bonds and KPI-linked general purpose bonds.