World Bank Floats New ESG Bond Format to Protect Brazil’s Amazon
- Researchers propose novel structure for a Brazil SLB bond
- Nation is planning its first bond linked to green projects
A deforested area of the Amazon rainforest in the region of Labrea, Brazil.
Photographer: Douglas Magno/AFP/Getty ImagesThis article is for subscribers only.
The Brazilian government should issue an innovative sustainability-linked bond to curb deforestation in the Amazon rainforest, according to researchers at the World Bank.
So-called SLBs — which mean issuers pay higher interest if they fail to meet sustainability goals — lend themselves to transformational projects such as curbing deforestation, the paper said. In Brazil’s case, the bond should be designed so the government isn’t rewarded or penalized for factors outside its control that impact conservation efforts, such as weather or global commodity prices.