The Climate Standards Board has approved a new standard for climate-resilient water bonds, providing investors with a verifiable, science-based screening process to evaluate bond investments earmarked for financing sustainable water-based infrastructure projects.
The new standard, or “Water Climate Bonds Criteria,” are a key segment of the Climate Bonds Standard, and will certify water investments that have:
- Carried out climate vulnerability assessments considering past, present and future climate risks and environmental losses and;
- Created resulting adaptation and/or mitigation plans.
Water-related infrastructure needs are enormous, with the American Water Works Association (AWWA) estimating that the cost of repairing and expanding U.S. drinking water infrastructure will top $1 trillion in the next 25 years.
Projects as diverse as energy or industrial water efficiency, reuse, catchment or watershed restoration and/or large-scale water supply infrastructure development could be included.
The Criteria will provide assistance to corporate, municipal, city based and other bond issuers seeking to ensure their bond offerings for water-related infrastructure, or water systems within industrial and manufacturing processes, maximise sustainability and environmental factors.
Development has been led and supported by a Consortium convened by the Climate Bonds Initiative that includes Ceres, the Alliance for Global Water Adaptation (AGWA), CDP, and the World Resources Institute (WRI) together with a Technical Working Group (TWG) that includes additional water expertise through representation from other NGO’s, industry experts and water authorities.
Co-ordinating the development of the criteria through the TWG is Lead Specialist Dr John Matthews, of the Alliance for Global Water Adaptation (AGWA), which is supported by the Stockholm International Water Institute (SIWI).
Phase I of the Climate Bonds Water Criteria has focussed primarily on screening grey (built) water infrastructure projects and assets.
Phase II development is now underway, beginning the process of extending the scope of the Criteria to include ecosystem-based adaptation and mitigation for investments in green (nature based) water projects and assets.