Green Bonds for Climate Resilience – State of Play and Roadmap to Scale

This paper aims to deepen current understanding of the state of play of green bonds that are financing climate resilience-
related assets, projects, and activities (hereafter referred to as Green Bonds for Climate Resilience). The report
contains an overview of the global state of play of green bonds with resilience-related use of proceeds, including
highlights from select regions1. The barriers for issuing resilience-related green bonds in four case study countries2 are identified and recommendations on how to address them are proposed. An analytical tool, the Green Bonds for Climate
Resilience Capacity Assessment Framework, has been developed to inform this analysis and can in turn be used by
public and corporate issuers to assess their internal capacity and external enablers to issue Green Bonds for Climate
Resilience. Based on the analysis and findings, a roadmap to scale-up this promising tool is presented.

Box 1: Definitions
Climate resilience: This document uses the definition of climate resilience in the context of investment as
set out in the Climate Bonds Initiative’s Climate Resilience Principles (CRPs), namely: resilience investments
improve the ability of assets and systems to persist, adapt and/or transform in a timely, efficient, and fair
manner that reduces risk, avoids maladaptation, unlocks development and creates benefits, including for the
public good, against the increasing prevalence and severity of climate-related stresses and shocks. Note that
in the paper resilience is at times used as shorthand for climate resilience.

This paper uses the term ‘Green Bonds for Climate Resilience’ as shorthand for a green bond in which some
portion (or all) of its proceeds is allocated to investments that support climate adaptation and increase resilience
to physical climate risks. A Green Bond for Climate Resilience enjoys the same benefits as conventional green bonds (i.e., those focused on low-carbon investments). Notably, the benefits of green bonds include:

  • providing issuers access to low-cost capital to finance their investment pipelines
  • broadening of the investor base, as demand for green bonds far outstrips supply
  • well-suited to large-scale projects that require capital investment ahead of revenues
  • helping to unlock discounted finance through blended finance facilities and funds
  • bringing visibility and recognition to resilience features within the bonds
  • Positive impact on internal processes that enhance risk management and strengthen internal relationships and commitment to sustainability.

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