The growing interest of companies and investors in thematic bonds goes hand in hand with the need to provide them with the tools and knowledge to guide them on this path. The results, so far, speak for themselves. And the future looks promising.
Paraguay has a unique opportunity to position itself in the global market and seek its first thematic bond. With the upcoming UN Climate Change Conference, COP28, just around the corner, the time has come to make this a reality.*
The risks involved in sustainability-liked bonds often focus on insufficiently robust and ambitious targets and KPIs, improperly crafted incentives and structural loopholes. All these can be alleviated with better monitoring of issuers.
Sustainability-linked bonds provide issuers with much leeway for the use of proceeds and market participants are getting a better understanding of their risks and rewards, as well as how they can be “gamed”. Green-washing is only one of several risks looming.
Latin America is not yet late to join the nascent gender bond market. The timing is just right. These bonds also empower women economically and socially without sacrificing profitability.