The Climate Bonds Initiative (CBI) has published a briefing paper on the potential for green bonds to serve as a “bridge” to SDG achievement. The paper is the first in a series on synergies between green bonds and the SDGs. The paper notes the appearance in the market of social bonds, sustainability bonds, ESG bonds, and most recently SDG bonds, all of which replicate the green bond model in “requiring disclosure and reporting on the use of proceeds from the issuer to connect investors with assets that are expected to deliver a positive sustainability impact.” Several issuers of green bonds have begun to include SDG alignment in their bonds, CBI reports, such as the National Australia Bank’s SDG Green Bond Framework, where eligible categories are those that meet requirements for certification under the Climate Bonds Standard, while also contributing towards specific SDGs.
The paper provides examples of green bonds that advance SDGs 6 (clean water and sanitation), 7 (affordable and clean energy), 9 (industry, innovation and infrastructure), 11 (sustainable cities and communities), 13 (climate action) and 15 (life on land), including in Cape Town, Nigeria, India, Lithuania, Poland and Sweden. Other sections address ‘Applying a climate risk lens to all thematic bonds’; ‘Achieving social goals in a low-carbon way’; and ‘Scaling investment to meet SDGs.’
Finally, the authors note the need for growth in bonds aligned with global climate targets “from millions to trillions.” The highlight the Mission2020 initiative, which calls for US$1 trillion of annual green bond issuance by 2020.