Nature Bonds May Be the Next Big Thing for Emerging Markets
The group’s proposals would tie the cost of debt repayments to quantified biodiversity and emissions-reductions targets, meaning borrowers would have to pay less interest if they hit those. Countries might also be able to pay back debt using carbon credits.
Pakistan could become the first sovereign to issue a nature performance bond, it has been
“Pakistan is working to recover from Covid protecting nature and creating green jobs by piloting a new type of ‘nature performance bond”
said Malik Amin Khan, advisor to the Prime Minister of Pakistan on Climate Change and vice president of International Union for Conservation of Nature (IUCN).
There is growing global momentum towards linking sovereign debt payments with quantifiable performance on biodiversity protection.”
The development comes as NGO Finance for Biodiversity (F4B) called for a nature and
climate sovereign bond facility to be c reated to encourage developing countries to issue
such bonds, to support their recovery from the pandemic by investing in natural capital to
support inclusive, long-term sustainable development
My word is my bond: Linking sovereign debt with national sustainability commitments
"One way to link sustainable sovereign financing with national climate and biodiversity commitments could be through sovereign sustainability-linked bonds."