REPORTS & DATA

There is an urgent need to grow green bonds and other debt instruments that promote sustainability to give emerging economies the financing they need to meet climate targets. The fifth edition of the ‘Emerging Market Green Bonds Report’ reviews key green, social, sustainability, and sustainability-linked (GSSS) bond market trends in 2022 and outlines the expectations for 2023 and beyond. It also discusses the implications for the asset class of recent developments in policy, regulation, and technology.

Emerging market issuers make up approximately 12% of all sustainable bonds issued. Among them, six countries - Kazakhstan, Pakistan, Poland, Romania, Türkiye, and Uzbekistan - have issued 59 bonds worth almost US$21 billion. However, emerging markets are arguably in most need of capital for sustainable development and many emerging market countries are vulnerable to the effects of climate change. The report examines the potential for sustainable bond issuance in six countries focusing on three key sectors, with benchmark chapters that analyze each target sector globally.

Nearly all types of natural capital—the world’s stock of resources provided by nature—are in decline. Combining cutting-edge, integrated natural science and economic models with an extensive new global dataset, the report offers a novel approach to address the foundational challenges of sustainability to find that economic development and poverty reduction do not need to come at the cost of a livable planet.

Annual clean energy investments in emerging and developing economies will need to more than triple by the early 2030s to meet the rising energy needs and align with the climate goals of the Paris Agreement. The report highlights that public investments alone are insufficient to deliver universal access to energy and tackle climate change. Two-thirds of the finance for clean energy in emerging and developing economies (outside China) will need to come from the private sector. The report emphasizes the need to strengthen regulatory frameworks and improve access to finance to overcome obstacles, including significant upfront costs and a high cost of capital.

There is a growing recognition of the need to transition to sustainable business models that protect biodiversity and ecosystem services. Finance and innovative financial solutions are key to supporting this transition; and biodiversity finance has emerged as a fast-growing area in green finance with increased interest from investors, financial institutions, and issuers globally. IFC has developed a Biodiversity Finance Reference Guide to provide an indicative list of investment projects, activities, and components that help protect, maintain, or enhance biodiversity and ecosystem services, as well as a structured approach for investors and financiers to identify eligible use of proceeds that constitute biodiversity finance.

Clean cooking fuel, stoves, and related technology have great potential to improve households’ health and livelihoods, empower women, and reduce negative climate and environmental impacts. However, worldwide, more than 2.4 billion people lack access to clean cooking technology. This brief introduces the first-ever Clean Impact Bond (CIB), a results-based financing (RBF) instrument that is designed to mobilize finance for small and medium enterprises based on sales of certified health and gender credits in the modern energy cooking sector.

Regulatory approaches to facilitate the climate transition have proliferated around the world, particularly with the development of classification systems – or taxonomies – that set out criteria for economic activities labeled as sustainable. This research report, conducted in partnership between IFC and the Equator Principles Association, explores linkages and provides practical comparisons between the European Union’s (EU) Taxonomy’s “do no significant harm” (DNSH) and minimum safeguards requirements, and the IFC Performance Standards and World Bank Group Environmental, Health, and Safety (EHS) Guidelines.

This report provides an up-to-date overview of existing and emerging carbon pricing instruments around the world, including international, national and subnational initiatives. It also investigates trends surrounding the development and implementation of carbon pricing instruments and some of the drivers seen over the past year. Specifically, this includes the use of carbon taxes, emissions trading systems, and crediting mechanisms. Key topics covered in the 2023 report include how governments have responded to the global energy crisis, uptake of ETSs and carbon taxes in emerging economies, and progress in carbon markets and supporting frameworks, including implementation of Article 6 of the Paris Agreement.

The increasing urbanization in India, along with rising household incomes, has led to a surge in demand for residential properties. The study aims to identify the demand for green housing among lower-income groups, assess the supply value chain of green construction materials and financial products, analyze housing policy framework on green buildings and finance, and formulate appropriate products and strategies for penetrating the affordable green housing market and targeted customer segments.

As blue carbon projects are in high demand, a number of large buyers are willing to commit to forward carbon credit agreements and offer amenities, including premium prices and upfront payments. Mobilizing capital investments for conservation remains a primary obstacle to managing and restoring coastal blue carbon ecosystems. This report serves to assess current market trends around coastal blue carbon with a view to identifying ways to boost financing for conserving and restoring marine and coastal ecosystems.