The Securities and Exchange Commission on Tuesday bared the framework for the issuance of so-called blue bonds, a relatively new instrument supporting investments in healthy oceans and other “blue” economies.
The guidelines were launched alongside a conference co-organized with the Asian Development Bank and in partnership with the United Kingdom.
The SEC said it wants more companies to make full use of the new investment product in hitting their sustainability goals.
“As we unveil the guidelines on blue bond issuances, we take a giant leap towards fostering a sustainable blue economy and building a robust capital market in our country,” SEC chairman Emilio B. Aquino said during the launch.
“Blue bonds, as a specialized class of debt securities, are emerging as a powerful tool globally to promote environmental sustainability, not only in the corporate sector but also at the sovereign level. These bonds provide a unique opportunity for us to channel investments into projects that support marine conservation, sustainable fisheries and responsible aquaculture,” Aquino said.
The conference sought to analyze the status and potential of blue bonds in the local market, explore innovative financial instruments and capital market solutions to support the blue economy, and provide a platform for stakeholders to discuss opportunities to finance investments into the blue economy.
The issuance of blue bonds is governed by SEC Memorandum Circular 15 issued only in September this year.
Blue bonds are a subset of green bonds and sukuk, or Sharia-compliant bonds, the proceeds of which will exclusively be used to finance or refinance new and existing eligible blue projects and activities.
Blue projects include ecosystem management and natural resources restoration of coastal, marine, river, lake, and other marine- or water-based ecosystems; sustainable fisheries management; and sustainable aquaculture, among others, as long as they directly aim to address sustainable water management and ocean protection.
They must also substantially contribute to objective numbers 6 and 14 of the United Nations Sustainable Development Goals, which seek to ensure availability and sustainable management of water and sanitation for all, and conserve and sustainably use the oceans, seas and marine resources for sustainable development.
Such contributions shall be assessed and quantified, if possible, by the issuer.
Quantifiable performance measures include greenhouse gas emissions reduced or avoided, ocean-based renewable power generation or energy savings, water savings, plastic waste reduced or avoided, and wastewater treated or avoided, among others.
