Blue bonds: Sustainable financing for the Blue Economy around the Indian Ocean

What the paper says

Abstract Since the last few years, there has been a rapid increase in the issuance of sustainability-linked financial products, such as Green Bonds . In parts of the world with large marine and coastal ecosystems, such as nations around the Indian Ocean, the usage of Blue Bonds is becoming increasingly popular, aiming to develop and build a Blue Economy . The governments of the Seychelles and Indonesia, for example, have issued blue bonds, and the Asian Development Bank has set up a blue bond incubator. Whilst various guidelines for the issuance of blue bonds have been developed by market participants and various international organisations, challenges remain. These challenges are not dissimilar to those faced by green bonds in the earlier days, and solutions may be found along a similar vein. In particular, an appropriate and unique definition of blue to distinguish all facets of the wider blue economy, which could include the sustainable extraction of fossil fuels, from the narrower concept of blue bonds might be needed to prevent bluewashing . Additionally, regulatory standards are being developed, for example by the Securities and Exchange Board of India (SEBI), to tighten the framework even further. Altogether, blue bonds may bring significant potential in financing sustainable ocean development.