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HARD FACTS
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FORTUNE.COM // JULY 2019
ECO-FINANCE
Selling Seychelles
for the Seashore
Innovative financial products like “blue
bonds” could play a big part in saving the
world’s oceans. By Erika Fry
CAN WE FINANCIALLY engineer our
way out of climate change and
polluted oceans? Maybe not, but financial innova-
tion is emerging as a popular tool to help in the
race to protect the planet. Last year, the market
for “green bonds,” a decade-old asset class that
funds environmentally friendly projects, reached a
record $163.7 billion, up from $36.6 billion issued
in 2014, according to the Climate Bonds Initiative,
an international not-for-profit.
Now there is a wave of novel financial instru-
ments aimed at saving the oceans and alleviating
the world’s water
crises. They include
“blue bonds,” which,
structured like their
chromatic cousins,
are being used to raise
money to tackle is-
sues from the ocean’s
plastic waste problem
(Morgan Stanley
recently sold $10 mil-
lion worth) to waste-
water management.
Last year, Seychelles
launched a multi-
million-dollar blue
bond, and the Nordic
Investment Bank, on
behalf of Baltic and
Nordic countries, did
so this year. “We’re
just scratching the
surface,” says Navindu
Katugampola, head
of green, social, and
sustainability bonds
at Morgan Stanley.
Seychelles, whose
economy—largely,
tourism and fish—
heavily depend on
healthy oceans, also
did a groundbreaking
deal with the interna-
tional nonprofit The
Nature Conservancy
(TNC). In exchange
for TNC purchasing
and refinancing a
chunk of the nation’s
debt, the govern-
ment committed to
using the newly raised
capital to protect
and manage marine
resources. TNC,
which structured the
deal like previous
(and successful) debt-
for-nature swaps in
Latin America, plans
to work with dozens
of other coastal and
island nations on
similar financing ma-
neuvers. Done right,
says TNC’s Robert
Weary, the whole
“blue economy”—
livelihoods and the
environment—should
be better off.
Seychelles,
the smallest
African nation
by population, is
particularly at
risk from dam-
aged oceans.
CHINA’S INDUSTRIAL economy may be ailing,
but it remains the cement capital of the world.
From 2011 to 2013 China used more cement (6.6 gigatons) than
the U.S. did in the entire 20th century (4.5 gigatons), as Bill Gates
pointed out at the time in a famous blog post. Both consumption
and production have fallen from that peak, and cheap imports
from Vietnam are reshaping the market. Still, the 2.3 gigatons
China produced in 2018 is enough to outpave any other nation.
SEYCHELLES: RAIM
UND FRANKEN
—ULLSTEIN BILD VIA GET T Y IM
AGES; CEM
ENT: AFP/GET T Y IM
AGES
