Covid-19 disruptions, aggravated by the ongoing environmental crisis, have put value chains in the international spotlight, drawing public and private sector’s attention to the need of stronger value chain security and a stronger focus on sustainability. ESG performance has become a central part of this discussion, as the world strives to building more secure and sustainable value chains.
Donor funds can be combined with equity investments to create incentives and nudges for corporate management teams, to achieve a particular outcome that is good for society or the planet, and hopefully both.
PPPs in Latin America & the Caribbean may face challenges related to the depth of financial markets, the incentives and mechanisms for investor diversification, the environment for private investment, and underlying project and contract structures.
The circular economy is tailor-made to tackle climate change and to shepherd the limited natural resources we depend on. In past years, we have seen a tremendous uptake of this agenda in the region, both in terms of policies and public initiatives as well as private sector action.
It’s important to invest in the construction of buildings that reduce greenhouse gas emissions, but it is equally, or more, important to create a new financial framework and a new mentality that helps investors direct their funds in this regard.
SLBs are new type of ESG-friendly bonds with variable coupons tied to sustainability targets. As opposed to green, social or sustainable bonds, issuance proceeds are not tied to specific green or social projects or assets; the focus is on the company’s ability to meet its commitments.