Could blue bonds save Asia’s threatened marine ecology?
There is a vital need for ocean and marine life conservation in the Asia-Pacific (APAC) region.
Last year, the Philippines’ largest bank, BNO Unibank, announced that it would issue its first ‘blue’ bond1, geared towards financing ocean and marine life conservation. While the Philippines is not the earliest APAC adopter of such an initiative, the move was significant.
An estimated 81% of ocean plastics come from Asian rivers, and the Philippines alone contributes around one-third of the global total2. Roughly 0.75 million metric tons of mismanaged plastic enter the oceans via the country ever year3.
The initiative was welcomed by the World Bank’s International Finance Corporation (IFC), which is subscribing up to USD 100 million to the bond4. The BDO Blue Bond will adhere to the International Capital Market Association's Green Bond Principle and the IFC’s Blue Finance Guidelines.
We discuss five ways that we can protect our oceans in order to build a sustainable future.
Expanding Marketplace
Last year the IFC also committed to invest in a blue bond issued by TMBThanachart Bank Public Company, the first issued by a commercial bank in Thailand. The IFC is subscribing up to USD 50 million5, and is helping with the structuring of the bond and assisting in developing a blue finance strategy and framework.
The first blue bond in the APAC region was launched by Bank of China (BoC) in 2020. BoC raised nearly USD 950 million6 for what were then the first ever self-labelled international blue bonds issued by a commercial bank. Issued out of BoC’s Sustainability Series Management Statement, the blue bonds will be used to boost the expansion of a sustainable blue economy by investing in marine-related green projects in both domestic and overseas markets7.
The Importance of Preserving Marine Ecology
With marine conservation critical in the lives and livelihoods of people around the world, blue bond and other financing initiatives are becoming increasingly important. Over three billion people rely on the ocean for their food, jobs, and income8. Globally, the market value of marine and coastal resources and industries is estimated at USD 3 trillion per year, or about 5 per cent of global GDP9.
In APAC, these figures are even starker. Ocean-based sectors play a key role in the economic growth of many countries, including some of the island nations. The share of the blue economy in the GDP of the region varies from as low as 1% to as high as 87%10. Moreover, the region is an important fisheries sector and contributes significantly to the global food basket. Asia, excluding China, occupies around 34% of the global fishing and aquaculture market, and total fish production has nearly doubled in Asia over the last 20 years. In fact, approximately 85% of the total population employed in the fishing sector globally is in Asia11.
Read more about how Asia can also address its looming food crisis.
The region is also abundant in coastal and marine resources, with a strong coastal tourism industry, and leads the way on developing seabed mineral and marine resources for high technology sectors12.
Building Nature-Dependent Economies
At Lombard Odier, we believe it is critical to build an economy that works in harmony with nature, and we believe there is an urgent need for a fundamental redesign of our economic model. Transitioning to a sustainable, bio-based model is not an aesthetic or ethical pursuit – it is essential that we preserve marine ecologies and the planet’s resources and ecosystems.
In order to achieve this, we must move away from the ‘take-make-waste’ model that means we extract from the earth more than is sustainable. Instead, we must shift to a regenerative bioeconomy that combines nature-centric value creation with better economics. We call this the CLIC© economy, because it is Circular, Lean, Inclusive and Clean.
To push forward this transition, Lombard Odier and the Alliance to End Plastic Waste have joined forces to invest in solutions in the plastic circularity space that can improve waste management and materials reuse and recycling, thereby minimising plastic leakage into marine ecosystems. In addition to waste minimisation, in 2020 Lombard Odier announced a partnership with Plastic Bank to help prevent ocean pollution. In 2021, we met our target to collect over 795 tons of ocean-bound plastic, equivalent to more than 39 million plastic bottles13.
Discover Lombard Odier’s commitment to sustainability here in Asia.
1, 4 https://www.philstar.com/business/2022/05/18/2181771/bdo-issues-1st-blue-bond
2 https://ourworldindata.org/ocean-plastics#:~:text=It%20is%20estimated%20that%2081,third%20of%20the%20global%20total
3 https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26953
5 https://www.bangkokpost.com/business/2348228/funding-the-future
6, 7 https://www.ca-cib.com/pressroom/news/bank-china-issues-asias-very-first-blue-bonds
8, 9 https://www.un.org/en/conf/ocean/background.shtml
10 , 11, 12 https://www.teriin.org/sites/default/files/2021-03/blue-economy.pdf
13 https://www.lombardodier.com/contents/corporate-news/media-releases/2020/july/lombard-odier-partners-with-plas.html
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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