Diverse Applications: Thematic Bonds Catching Up

Raghu Dharmapuri Tirumala () and Piyush Tiwari
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Raghu Dharmapuri Tirumala: University of Melbourne

Chapter Chapter 5 in Advances in Infrastructure Finance, 2023, pp 107-133 from Springer

Abstract: Abstract Theme-based bonds such as green, social, sustainability, and sustainability-linked bonds have been growing at a fast pace in the recent past. Thematic bonds allow investors to participate in financing a specific theme-related project (s) such as climate change, marine diversity protection, health or sustainability. Opting for such labeled bonds shows the investors’ commitment to increased transparency and governance. Governments are likely to continue to deploy and utilize the proceeds from the issuance of sustainability bonds for climate mitigation and adaptation projects. It is believed that such issuances in future would combat the impact of climate change and facilitate governments to meet the commitments made in the Paris climate agreement, besides helping them to stagger the spending on projects spread over several years in a systematic manner. There are numerous initiatives for creating thematic frameworks, for instance, that of the blue framework. IFC, ADB, Climate Bonds Initiative, etc. have been drafting their own versions of the taxonomy, which hopefully, over a period, might converge in all respects. The thematic bond market is gaining traction after the renewed international focus on ecological, environment conservation, and achieving sustainable development goals. The individual sectors under the broad categorization of thematic bonds address a diverse range of applications.

Keywords: GSSS bonds; Social bonds; Sustainability bonds; Sustainability-linked bonds; Thematic bonds (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/978-981-99-0440-2_5

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