Explainer: What Are Green And Blue Bonds?

India assumed the G20 presidency on December 1, 2022, and will convene the G20 Leaders’ Summit in 2023. The key focus of this summit is renewable and sustainable development goals. In 2021, during the UN Climate Change Conference, which is also referred to as conference of parties (COP26), Prime Minister Narendra Modi gave five milestone commitments known as “The Panchamrit”. These called for reduction in use of fossil fuel, reducing carbon emission, and making India “net zero by 2070”. To meet these milestones, India needs funds, and one of the ways to do that is through bonds. In this regard, the Securities and Exchange Board of India (Sebi) came up with a consultation paper in August on green bonds to further strengthen the regulatory framework and expand the definition of green debt securities. The paper also introduced the concept of blue bonds....