Achieving the SDGs by 2030 will require new investments in the order of USD 2.5 trillion per year in developing countries alone. Sustainability bonds, or “SDG bonds” are fixed income investments that can play a role in helping to fill this investment gap. Different from conventional bonds, SDG bonds are specifically developed and explicitly labeled to fund projects that have positive social or environmental benefits, supporting one or more of the 17 SDGs. The SDG bond universe to date has mostly been made up of ‘green bonds’, bonds with an environmental or climate-related focus, but other SDG themed bonds such as water bonds and gender bonds are starting to enter the market. The green bond market, for example, exceeded USD 168 billion in 2018 with a five-year growth rate of 466%. Along with the high growth of this sector, there is also an increasing diversification of issuers and types of green projects for which the proceeds of the bonds are being used, and lessons learnt in the green-bond arena are being applied to other SDG bonds.
This multi-stakeholder session will bring together key bond market players such as stock exchanges, securities regulators, issuers and standards bodies to address opportunities and challenges for further boosting the growth of the emerging SDG bonds sector. The session will support the continued growth of domestic, regional and global green and sustainability bond markets. Exchanges and securities regulators will benefit from discussions on the opportunities and challenges involved in growing SDG bond markets. The session will also further disseminate the conclusions of the Sustainable Stock Exchanges voluntary green finance action plan for stock exchanges.
Issues to be addressed
- What role can stock exchanges play? Experiences promoting sustainability bonds or developing listing segments for sustainability bonds.
- What is the appropriate role for regulators and what should be left to stock exchanges, investors and issuers?
- What role does reporting and assurance play in the further development of a sustainable debt market?
- What opportunities lie ahead for sustainability themed bonds? Experiences from the development of gender bonds and water bonds.
- What are the main challenges for taking this agenda forward?