ESG & Investing
Debt Swaps Called Out by Barclays Analysts Ignite ESG Debate
- Market split as to use-of-proceeds rules around blue bonds
- Belize debt-for-nature swap sets precedent in growing market
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At the outer edge of the ESG debt market, an unregulated but growing form of finance has some industry experts sounding the alarm.
Their concern centers on market practice evolving around blue bonds when they’re used in debt relief programs. Conceptually similar to green bonds, the blue variant is supposed to direct its proceeds toward marine protection. The biggest case to date is a deal for Belize, where Credit Suisse Group AG issued blue bonds to finance the country’s debt-for-nature swap set up by the Nature Conservancy in late 2021.