The past few years have seen a surge in interest in ethically labelled bonds for countries in the Global South. This includes so-called 'green' and 'social bonds' and derivatives, including 'sustainability-linked bonds' and 'blue bonds', now being heavily promoted for small island developing states (SIDS). In the past five years, at least 22 countries in the global south have issued sovereign environmental, social and governance (ESG) bonds, raising well over US$60 billion. Most international organisations view this as a positive development, and the expansion of ESG bonds is now a common recommendation made in international meetings and agreements on climate and biodiversity.
This report offers a succinct introduction to sovereign ESG bonds and explores some of the limitations and risks around the push for ESG financing as a way for global south countries to close the financing gap for Sustainable Development Goals (SDGs) and climate action. It also serves as a basis for further discussions, particularly within civil society, in order to be able to define a well-informed and strategic position. Ultimately, the paper will help Eurodad, civil society allies and policymakers define future actions towards mainstream narratives and public support for expanding ESG financing for global south countries.
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Public Analysis of Investments and Sustainability Evaluation